Author Topic: YY - YY Inc.  (Read 4209 times)

SnarkyPuppy

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Re: YY - YY Inc.
« Reply #10 on: August 13, 2018, 06:50:14 PM »
~$300mm USD loss in P&L due to GAAP accounting noise (GAAP requires YY to book a paper loss for the option sold to Tencent to sell HUYA)

Implied 8% revenue growth guidance for YY live for Q3 (vs upper 20% for last few quarters).  On call, management says this is largely due to the World Cup being shown at the same time as peak YY hours - and they've already seen a reversal back to normal trends post-world cup (per management conference call).   

My SOTP with YY at $80 per share and HUYA at $30 per share (all figures in USD):
- $2bn Cash
- $1.9bn HUYA (45% ownership, 30% holdco discount)
- $300bn BIGO (see post above)
- ($800bn) NCI to back out HUYA-standalone cash (HUYA reports standalone publicly now)
= Implied remaining value for YY live of $1.6bn = ~3x FCF (FY19 sell side estimates of $500mm).

Viewed another way, YY live earned ~$400mm pretax or ~$280mm FCF over the TTM (5.7x implied YY live price).  This is a growing and capital light business.   

In terms of a margin of safety, if you value the cash, HUYA, and BIGO at $0 then YY live trades at ~13.8x TTM FCF.   

Price seems absurd to me.