According to the latest forecast from Morgan Stanley, the share price of a Chinese company listed in the United States and with most of its funds coming from overseas may soar by more than 75%. Asia equity analyst Yang Liu and his team not only raised their price target on Tuya by 50 cents to $3.50 last Tuesday, but also issued a separate note on Thursday saying they expect the battered Chinese company to The share price “will rise in absolute terms” over the next 60 days. “This is because the stock has recently seen trading, making the short-term valuation more attractive,” Morgan Stanley analysts said, referring to Tuya’s quarterly results last week. Tuya shares closed at $1.99 on Friday, marking the first year this year The cumulative decline is more than 13%. The company said first-quarter revenue increased 30% year-on-year to $61.7 million, mainly from sales of cloud-based “Internet of Things” software to its lighting and home appliance businesses. For example, a hotel can use Tuya’s system to remotely set the mood lighting in each room. “First-quarter 2024 results were significantly better than expected, with a sharp increase in slope,” Morgan Stanley analysts said, noting that Tuya raised its full-year revenue forecast. “Chinese companies are focused on going overseas and have a global leadership position,” the analysts said. “Following the first quarter 2024 results, we believe our previous OW thesis on Tuya is gradually coming into play, as reflected in fundamental improvements. ” Tuya said on its earnings call last week that more than 80% of its revenue comes from outside China, while growth in the domestic market has slowed, according to FactSet records. Management noted that Europe is Tuya’s largest market, accounting for just over a third of total revenue, followed by Asia Pacific. Latin America accounts for nearly 15% of revenue, the company said. “Our market share is expanding as major competitors exit the market during the industry downturn in 2022-2023,” management said. “More leading brands are switching from in-house IoT development to our platform.” As the business As capabilities improve and domestic growth slows, Tuya is just one of many Chinese companies heading overseas. The company claims to have become one of Google Authorized Solution Providers in 2021 and said it integrated Google Cloud last year. In terms of data security, Tuya announced last week that it had obtained the EU GDPR Data Privacy Certificate. The company also claims to have data centers in the United States, Europe, India and mainland China. Tuya plans to release details on how to integrate generative artificial intelligence into its products at its developer conference on May 29. The company, which is dual-listed in Hong Kong, also has a buy rating from Goldman Sachs. According to records in the Wind Information database, Bank of New York Mellon holds more than 21% of Tuya’s outstanding shares, while US venture capital firm New Enterprise Associates holds just under 20%.
