Huya Earnings: Lowered Guidance on Livestreaming Weakness, but First-Ever Buybacks Boost Confidence

Huya reported mixed second-quarter earnings, but more important, the board finally announced a $100 million share buyback program that amounts to a whopping 16% of the firm’s market capitalization. We think management is taking the right step to improve the capital allocation decisions. With shares currently trading at just 42% of net cash, we believe the share buybacks, if executed properly, will bring significant upside to Huya's share price. We have fine-tuned our near-term forecasts, but we maintained our fair value estimate of $7.70. The bulk of Huya's value stems from its net cash position of $6.3 per share as of end-June 2023.