Intrinsic value of HUYA Inc. - HUYA

Previous Close

$21.66

  Intrinsic Value

$96.88

stock screener

  Rating & Target

str. buy

+347%

Previous close

$21.66

 
Intrinsic value

$96.88

 
Up/down potential

+347%

 
Rating

str. buy

We calculate the intrinsic value of HUYA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  528
  816
  1,220
  1,770
  2,497
  3,433
  4,609
  6,051
  7,787
  9,835
  12,213
  14,931
  17,997
  21,413
  25,178
  29,288
  33,738
  38,519
  43,625
  49,047
  54,779
  60,815
  67,150
  73,780
  80,706
  87,928
  95,449
  103,274
  111,411
  119,867
Variable operating expenses, $m
  346
  534
  799
  1,159
  1,635
  2,248
  3,017
  3,962
  5,098
  6,439
  7,996
  9,776
  11,783
  14,019
  16,484
  19,175
  22,088
  25,218
  28,561
  32,111
  35,864
  39,815
  43,963
  48,304
  52,838
  57,566
  62,490
  67,613
  72,940
  78,477
Fixed operating expenses, $m
  136
  139
  142
  145
  148
  152
  155
  158
  162
  165
  169
  173
  176
  180
  184
  188
  193
  197
  201
  206
  210
  215
  219
  224
  229
  234
  239
  245
  250
  255
Total operating expenses, $m
  482
  673
  941
  1,304
  1,783
  2,400
  3,172
  4,120
  5,260
  6,604
  8,165
  9,949
  11,959
  14,199
  16,668
  19,363
  22,281
  25,415
  28,762
  32,317
  36,074
  40,030
  44,182
  48,528
  53,067
  57,800
  62,729
  67,858
  73,190
  78,732
Operating income, $m
  46
  143
  279
  466
  714
  1,034
  1,436
  1,931
  2,527
  3,231
  4,048
  4,983
  6,038
  7,214
  8,510
  9,925
  11,457
  13,104
  14,863
  16,731
  18,705
  20,785
  22,968
  25,252
  27,639
  30,128
  32,720
  35,416
  38,220
  41,135
EBITDA, $m
  47
  144
  282
  470
  719
  1,041
  1,446
  1,943
  2,543
  3,250
  4,073
  5,013
  6,074
  7,257
  8,560
  9,984
  11,525
  13,181
  14,950
  16,829
  18,815
  20,907
  23,102
  25,400
  27,800
  30,304
  32,910
  35,623
  38,443
  41,375
Interest expense (income), $m
  0
  0
  1
  7
  15
  27
  42
  62
  87
  117
  154
  197
  248
  305
  370
  442
  522
  609
  703
  804
  912
  1,027
  1,148
  1,276
  1,410
  1,550
  1,697
  1,850
  2,009
  2,174
  2,347
Earnings before tax, $m
  46
  142
  273
  451
  687
  992
  1,374
  1,844
  2,409
  3,076
  3,851
  4,735
  5,733
  6,844
  8,067
  9,403
  10,848
  12,401
  14,058
  15,818
  17,678
  19,636
  21,691
  23,842
  26,088
  28,431
  30,870
  33,407
  36,046
  38,788
Tax expense, $m
  12
  38
  74
  122
  186
  268
  371
  498
  651
  831
  1,040
  1,279
  1,548
  1,848
  2,178
  2,539
  2,929
  3,348
  3,796
  4,271
  4,773
  5,302
  5,857
  6,437
  7,044
  7,676
  8,335
  9,020
  9,732
  10,473
Net income, $m
  34
  104
  199
  329
  502
  724
  1,003
  1,346
  1,759
  2,246
  2,811
  3,457
  4,185
  4,996
  5,889
  6,864
  7,919
  9,053
  10,263
  11,547
  12,905
  14,335
  15,835
  17,405
  19,045
  20,754
  22,535
  24,387
  26,314
  28,316

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  230
  355
  531
  771
  1,087
  1,495
  2,006
  2,634
  3,390
  4,282
  5,317
  6,500
  7,835
  9,322
  10,961
  12,751
  14,688
  16,769
  18,992
  21,353
  23,848
  26,476
  29,234
  32,120
  35,135
  38,280
  41,554
  44,960
  48,503
  52,184
Adjusted assets (=assets-cash), $m
  230
  355
  531
  771
  1,087
  1,495
  2,006
  2,634
  3,390
  4,282
  5,317
  6,500
  7,835
  9,322
  10,961
  12,751
  14,688
  16,769
  18,992
  21,353
  23,848
  26,476
  29,234
  32,120
  35,135
  38,280
  41,554
  44,960
  48,503
  52,184
Revenue / Adjusted assets
  2.296
  2.299
  2.298
  2.296
  2.297
  2.296
  2.298
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
  2.297
Average production assets, $m
  5
  8
  12
  18
  25
  34
  46
  61
  78
  98
  122
  149
  180
  214
  252
  293
  337
  385
  436
  490
  548
  608
  671
  738
  807
  879
  954
  1,033
  1,114
  1,199
Working capital, $m
  -114
  -176
  -264
  -382
  -539
  -742
  -995
  -1,307
  -1,682
  -2,124
  -2,638
  -3,225
  -3,887
  -4,625
  -5,438
  -6,326
  -7,287
  -8,320
  -9,423
  -10,594
  -11,832
  -13,136
  -14,504
  -15,937
  -17,433
  -18,992
  -20,617
  -22,307
  -24,065
  -25,891
Total debt, $m
  10
  123
  281
  497
  782
  1,149
  1,609
  2,174
  2,854
  3,657
  4,589
  5,654
  6,855
  8,193
  9,669
  11,279
  13,022
  14,896
  16,896
  19,021
  21,267
  23,632
  26,114
  28,712
  31,425
  34,255
  37,202
  40,268
  43,456
  46,769
Total liabilities, $m
  207
  320
  478
  694
  979
  1,345
  1,806
  2,371
  3,051
  3,854
  4,785
  5,850
  7,052
  8,390
  9,865
  11,476
  13,219
  15,092
  17,093
  19,217
  21,463
  23,828
  26,310
  28,908
  31,622
  34,452
  37,398
  40,464
  43,652
  46,966
Total equity, $m
  23
  36
  53
  77
  109
  149
  201
  263
  339
  428
  532
  650
  784
  932
  1,096
  1,275
  1,469
  1,677
  1,899
  2,135
  2,385
  2,648
  2,923
  3,212
  3,514
  3,828
  4,155
  4,496
  4,850
  5,218
Total liabilities and equity, $m
  230
  356
  531
  771
  1,088
  1,494
  2,007
  2,634
  3,390
  4,282
  5,317
  6,500
  7,836
  9,322
  10,961
  12,751
  14,688
  16,769
  18,992
  21,352
  23,848
  26,476
  29,233
  32,120
  35,136
  38,280
  41,553
  44,960
  48,502
  52,184
Debt-to-equity ratio
  0.450
  3.460
  5.300
  6.450
  7.190
  7.680
  8.020
  8.250
  8.420
  8.540
  8.630
  8.700
  8.750
  8.790
  8.820
  8.850
  8.870
  8.880
  8.900
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  34
  104
  199
  329
  502
  724
  1,003
  1,346
  1,759
  2,246
  2,811
  3,457
  4,185
  4,996
  5,889
  6,864
  7,919
  9,053
  10,263
  11,547
  12,905
  14,335
  15,835
  17,405
  19,045
  20,754
  22,535
  24,387
  26,314
  28,316
Depreciation, amort., depletion, $m
  1
  2
  3
  4
  5
  7
  9
  12
  16
  20
  24
  30
  36
  43
  50
  59
  67
  77
  87
  98
  110
  122
  134
  148
  161
  176
  191
  207
  223
  240
Funds from operations, $m
  35
  105
  201
  333
  507
  731
  1,013
  1,358
  1,775
  2,266
  2,835
  3,487
  4,221
  5,039
  5,939
  6,923
  7,987
  9,130
  10,350
  11,645
  13,015
  14,456
  15,969
  17,552
  19,206
  20,930
  22,726
  24,594
  26,536
  28,555
Change in working capital, $m
  -43
  -62
  -87
  -119
  -157
  -202
  -254
  -312
  -375
  -442
  -514
  -587
  -662
  -738
  -813
  -888
  -961
  -1,033
  -1,103
  -1,171
  -1,238
  -1,304
  -1,368
  -1,432
  -1,496
  -1,560
  -1,625
  -1,690
  -1,757
  -1,827
Cash from operations, $m
  78
  168
  289
  452
  664
  933
  1,266
  1,670
  2,149
  2,708
  3,349
  4,074
  4,883
  5,776
  6,753
  7,810
  8,948
  10,162
  11,453
  12,817
  14,253
  15,760
  17,337
  18,985
  20,702
  22,490
  24,350
  26,284
  28,294
  30,382
Maintenance CAPEX, $m
  -1
  -1
  -2
  -2
  -4
  -5
  -7
  -9
  -12
  -16
  -20
  -24
  -30
  -36
  -43
  -50
  -59
  -67
  -77
  -87
  -98
  -110
  -122
  -134
  -148
  -161
  -176
  -191
  -207
  -223
New CAPEX, $m
  -2
  -3
  -4
  -6
  -7
  -9
  -12
  -14
  -17
  -20
  -24
  -27
  -31
  -34
  -38
  -41
  -44
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -72
  -75
  -78
  -81
  -85
Cash from investing activities, $m
  -3
  -4
  -6
  -8
  -11
  -14
  -19
  -23
  -29
  -36
  -44
  -51
  -61
  -70
  -81
  -91
  -103
  -115
  -128
  -141
  -155
  -170
  -185
  -200
  -217
  -233
  -251
  -269
  -288
  -308
Free cash flow, $m
  75
  164
  283
  444
  653
  919
  1,248
  1,646
  2,120
  2,672
  3,306
  4,022
  4,823
  5,706
  6,672
  7,719
  8,845
  10,047
  11,325
  12,675
  14,097
  15,590
  17,152
  18,784
  20,485
  22,257
  24,099
  26,015
  28,006
  30,075
Issuance/(repayment) of debt, $m
  10
  113
  158
  216
  285
  367
  460
  565
  680
  803
  932
  1,065
  1,201
  1,338
  1,475
  1,610
  1,743
  1,873
  2,001
  2,125
  2,246
  2,365
  2,482
  2,598
  2,714
  2,830
  2,947
  3,066
  3,188
  3,313
Issuance/(repurchase) of shares, $m
  42
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  52
  113
  158
  216
  285
  367
  460
  565
  680
  803
  932
  1,065
  1,201
  1,338
  1,475
  1,610
  1,743
  1,873
  2,001
  2,125
  2,246
  2,365
  2,482
  2,598
  2,714
  2,830
  2,947
  3,066
  3,188
  3,313
Total cash flow (excl. dividends), $m
  127
  276
  442
  659
  938
  1,285
  1,708
  2,212
  2,800
  3,475
  4,237
  5,087
  6,024
  7,045
  8,147
  9,329
  10,588
  11,921
  13,325
  14,800
  16,343
  17,955
  19,634
  21,382
  23,199
  25,086
  27,046
  29,081
  31,194
  33,388
Retained Cash Flow (-), $m
  -76
  -13
  -18
  -24
  -32
  -41
  -51
  -63
  -76
  -89
  -104
  -118
  -133
  -149
  -164
  -179
  -194
  -208
  -222
  -236
  -250
  -263
  -276
  -289
  -302
  -314
  -327
  -341
  -354
  -368
Prev. year cash balance distribution, $m
  53
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  104
  264
  424
  635
  906
  1,245
  1,657
  2,149
  2,724
  3,385
  4,134
  4,969
  5,890
  6,896
  7,983
  9,150
  10,394
  11,712
  13,103
  14,564
  16,094
  17,692
  19,359
  21,093
  22,897
  24,772
  26,719
  28,740
  30,840
  33,020
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  100
  242
  369
  523
  702
  903
  1,120
  1,343
  1,565
  1,775
  1,963
  2,120
  2,240
  2,315
  2,344
  2,325
  2,262
  2,157
  2,017
  1,851
  1,665
  1,468
  1,269
  1,074
  891
  723
  573
  445
  337
  249
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

FINANCIAL RATIOS  of  HUYA Inc. (HUYA)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

HUYA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HUYA stock intrinsic value calculation we used $330 million for the last fiscal year's total revenue generated by HUYA Inc.. The default revenue input number comes from 0001 income statement of HUYA Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HUYA stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for HUYA is calculated based on our internal credit rating of HUYA Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of HUYA Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HUYA stock the variable cost ratio is equal to 65.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $133 million in the base year in the intrinsic value calculation for HUYA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for HUYA Inc..

Corporate tax rate of 27% is the nominal tax rate for HUYA Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HUYA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HUYA are equal to 1%.

Life of production assets of 3.2 years is the average useful life of capital assets used in HUYA Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HUYA is equal to -21.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for HUYA Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 203.669 million for HUYA Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of HUYA Inc. at the current share price and the inputted number of shares is $4.4 billion.

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