IQ and HUYA: Buying opps?

Both are down more than 10% today on no news, so looks like profit-taking after huge upward moves. Added a little more to my IQ position just now.


me, too.

Posted thison npi…i prefer IQ. HUYA is growing faster but their revenue is an odd business model reliant on users optional gifting and on the top streamers staying on their platform.

Here is napkin math on IQ to help with their valuation:

IQ is very differwnt from HUYA with dual, and easy to understand, rev streams.

$3 per month sub fee per user. 60m subsscribers currently and growing fast.
Netflix at 120m subs as a comparison.

40% of china still getting online…4x US population, so can easy reach 240m subs as a fair target. That would be my 4-5 year goal for them.

Ad rev clocks in at 1.3b runrate currently. That is freemium model. They have approx 450m MAUs. They encourage uaers to go sub route by putting some premium content behind paywall.

PR dept soing great job of getting positive news out almost daily.

I think they get to 80m by EOY in subs. That equals $240m/mo or $720m/Q. If we assume no ad rev growth which is unlikely, add about $350m/Q.

That is about $1.28b/Q or $5b/yr in forward revenue runrate at end of 2018.

Current mkt cap is $27b or so.
That seems like a P/S of 6 if you are forward looking.

They use AI for content generation that users will prefer. They use AI/programmatic to maximize ad rev, too.

I bought more on the dip, too.



Dip? We don need no stinkin’ dip.

Bought IQ when I had the cash