DouYu International Holdings Limited

DOYU Details

DouYu International Holdings Limited (NASDAQ: DOYU) is a game-centric live streaming platform in China. Users can experience immersive and interactive gaming and live entertainment streaming through the company's platform, available on PC and mobile apps. It derives its revenues through live streaming and advertisement. As of December 09, 2021, DOYU has 324.41 million American Depository Shares (ADS) listed and outstanding, with 10 ADS representing one ordinary share.

Latest News:

• Share Repurchase Program: On August 30, 2021, DOYU announced a USD 100 million share repurchase program, which authorizes it to buy back its ordinary shares in the form of ADS over the next 12 months using its existing cash balance, subject to its insider trading policy and securities exchange laws. The company had repurchased ~USD 4.3 million worth of ADS as of September 30, 2021. 

Q3FY21 Results:

• Slight Decline in Topline: The company reported a YoY decline of 7.80% in total revenue to RMB 2.35 billion in Q3FY21 (ended September 30, 2021) compared to RMB 2.55 million in Q3FY20. The decrease was primarily due to a greater revenue base in the prior-year period due to numerous noteworthy fan engagement events that facilitated the conversion of paying users.
• Surge in Net Income: DOYU reported a net loss of RMB 121.42 million in Q3FY21 vs. net income of RMB 85.86 million in Q3FY20.

• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents of RMB 4.78 billion and no outstanding debt.

 

Key Risks:

• Political and Regulatory Risk: The Chinese authorities' crackdown on its US-listed businesses and the consequent possibility of stricter rules could dent the company's operations. This is after the passage of a bill in the US, which could lead to the delisting of some Chinese companies from the country's exchanges (in case the US authorities cannot satisfactorily audit the company for three consecutive years). These constitute significant political and regulatory risks for the firm.

Outlook:

• In its Q3FY21 earnings release, the company stated that it intends to continue to extend its gaming genres and content offerings in the future. It also plans to leverage its specialized marketing techniques, adaptable operational strategies, and multiple content formats to turn DOYU into an industry-leading game-centric content ecosystem.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

DOYU Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

DOYU's share price has declined 81.49% in the past nine months and is currently leaning towards the lower-band of its 52-week range of USD 1.98 to USD 20.54. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 40.98. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 3.40.

Considering the significant correction in the stock price in the past nine months, increasing demand for online gaming platforms, China's regulatory crackdown, and other associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 2.645, up 0.19% as of December 09, 2021, 12:37 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

 

Teekay Tankers Ltd. 

  

TNK Details

Teekay Tankers Ltd. (NYSE: TNK) is a multinational shipping company specializing in crude oil and refined petroleum product transportation via water. TNK's fleet consists of 49 double-hull tankers (26 Suezmax tankers, 14 Aframax tankers, and nine LR2 product tankers), as well as two-time chartered-in tankers. Short- and medium-term fixed rate time-charter contracts and spot tanker market trading are the most common ways TNK tankers are used.

Latest News:

• Fleet Expansion: TNK used USD 129 million in existing liquidity to repurchase six vessels previously under higher-cost sale-leaseback financings in September 2021. TNK refinanced two of the vessels mentioned above and two previously repurchased unencumbered vessels for a total of USD 73 million in September 2021. The company refinanced the remaining four vessels with lower-cost sale-leaseback financings totaling USD 69 million in early November 2021. TNK sold an Aframax vessel built-in 2003 for USD 11.7 million in September 2021.

 

9MFY21 Results:

• Decline in Topline: The company's total revenue was declined by 49.64% to USD 382.06 million during 9MFY21 (ended September 30, 2021) from USD 758.63 million during 9MFY20, due to weak spot tanker rates and high bunker fuel costs.
• Incurred Losses: TNK witnessed a net loss of USD 202.56 million during 9MFY21 vs. a net income of USD 160.60 million during 9MFY20.
• Leveraged Balance Sheet: The company had USD 60.72 million in cash and cash equivalents as of September 30, 2021, with outstanding debt (including finance lease) of USD 613.35 million.

Key Risks:

• Strong Dependence of Spot Tanker Rates: TNK generated 74.3% and 86.8% of its net revenues from vessels operating in the spot tanker market in FY20 and FY19, respectively. As a result, any drop in the spot tanker rate could hurt the company's financial situation.
• Competition Risk: TNK is in the marine transportation industry and confronts direct competition from big oil companies and independent tanker firms, both of which have more financial and operational resources, which could jeopardize the company's economic interests.

Outlook:

• Spot Tanker Rates Estimates: TNK noted in its Q3FY21 press release that the prognosis for tanker fleet supply remains favorable, as global oil demand is likely to recover in concert with vaccination program implementation. Tanker fleet growth is predicted to be around 2% in 2021 and 2022, with low growth in 2023 due to scrapping, which is likely to offset new vessel deliveries broadly.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

 (Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

TNK Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

TNK's stock price has fallen 26.20% in the past six months, and is currently leaning towards the lower band of its 52-week range of USD 10.08 to USD 16.09. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 44.56. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 14.33.

Considering the company's growth prospects, expansion in fleet size and capacity, strong balance sheet, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 11.55, down 1.87% as of December 09, 2021, at 2:30 PM ET.

  

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

 

Leju Holdings Limited

LEJU Details

Leju Holdings Limited (NYSE: LEJU) operates as a real estate and home furnishing e-commerce and online media platform in China. It provides real estate e-commerce, online advertising, and online listing services. Its comprehensive digital platform includes a variety of mobile applications and local websites in over 380 cities and offline services to assist residential real estate transactions. LEJU also handles SINA Corporation's real estate and home furnishing websites and works closely with Tencent Holdings Limited, a Chinese global technology conglomerate holding firm. As of December 09, 2021, LEJU has 136.80 million American Depository Shares (ADS) listed and outstanding (each ADS representing one ordinary share).

H1FY21 Results:

• Slight Increase in Topline: The firm reported a 7.64 % rise in total net revenues to USD 301.09 million during H1FY21 (ended June 30, 2021) from USD 279.72 million during H1FY20, primarily due to an increase in the number of discount coupons redeemed and secondary real estate broker demand.
• Decline in Profitability: LEJU reported a net loss of USD 47.77 million during H1FY21 vs. net income of USD 1.49 million during H1FY20, due to provisioning of bad debts.
• Cash and Debt Position: As of September 30, 2021, the company's cash and cash equivalents (including marketable securities) were USD 321.88 million as of June 30 2021, with no outstanding debt.

Key Risks:

• Political and Regulatory Risk: The Chinese authorities' recent crackdown on its US-listed businesses and the consequent possibility of stricter rules could dent its operations. This came after the passage of a bill in the US that could lead to the delisting of some Chinese companies from the country's exchanges (in case the US authorities cannot satisfactorily audit the company for three consecutive years). These constitute significant political and regulatory risks for the firm.

Outlook:

• Revenue Guidance: LEJU expects to generate revenue of USD 300 – 310 million in H2FY21, approximately flat compared to its H1FY21 revenues.

Valuation Methodology: Price/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

LEJU Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

LEJU's share price has declined 65.23% in the past nine months and is currently leaning towards the lower-band of the 52-week range of USD 0.86 to USD 3.97. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 45.92. We have valued the stock using the Price/Sales-based relative valuation methodology and arrived at a target price of USD 1.33.

Considering the significant correction in the stock price in the past nine months, the increasing demand for digital services, strong balance sheet, and the associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 1.05, down 6.25%, as of December 09, 2021, 01:33 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.