Connect with us





Morgan Stanley’s Asia equity analyst Yang Liu and team have raised their price target on Tuya, a U.S.-listed Chinese company, by 50 cents to $3.50, citing expected growth in the next 60 days. The analysts believe that Tuya’s stock has traded off recently, making short-term valuation much more compelling. Tuya’s first-quarter revenue grew year over year by 30% to $61.7 million, primarily from selling cloud-based Internet of Things software to businesses in the lighting and appliance industries. With more than 80% of its revenue coming from outside of China, Tuya is seen as a key player in Chinese companies going overseas with a leading global position.

Tuya’s management noted that Europe is the company’s largest market, accounting for over one-third of total revenue, followed by the Asia Pacific region. Latin America contributes nearly 15% of revenue. The company’s market share is expanding as major competitors exited the market during industry downturns from 2022 to 2023. Tuya claims to have data centers in the U.S., Europe, India, and mainland China, ensuring data security for its customers. Tuya has also earned the European Union’s GDPR data privacy certificate, highlighting its commitment to data protection.

As Tuya’s business capabilities improve and growth at home slows, it is among many China-based companies looking to expand overseas. The company became one of Google’s authorized solution providers in 2021 and integrated Google Cloud last year. Tuya plans to integrate generative artificial intelligence with its products, with details expected to be released at its developers’ conference on May 29. Tuya is dual-listed in Hong Kong and has a buy rating from Goldman Sachs. Major shareholders include BNY Mellon, holding over 21% of Tuya’s outstanding shares, and U.S. venture capital firm New Enterprise Associates holding just under 20%.

Tuya’s stock closed Friday at $1.99, down more than 13% for the year. However, Morgan Stanley’s analysts believe that the stock has the potential to soar more than 75% based on their updated forecasts. The analysts see Tuya as a key play on Chinese companies going overseas, with strong fundamental improvements reflected in the first-quarter results. Tuya raised its revenue guidance for the full year after a clean beat in the first quarter, reaffirming an upward trend with a steeper slope. The analysts expect Tuya’s beaten-down shares to rise in absolute terms in the coming 60 days, driven by short-term valuation dynamics.

In conclusion, Tuya, a U.S.-listed Chinese company with a significant presence overseas, is poised for growth according to Morgan Stanley’s updated forecasts. With strong revenue growth in the first quarter and expansion into key markets like Europe and the Asia Pacific region, Tuya is seen as a leader in Chinese companies going global. As the company integrates artificial intelligence and prioritizes data security, it is well-positioned for continued success. Despite recent stock performance, analysts believe that Tuya’s shares have the potential to increase significantly in the near future, making it an attractive investment opportunity for investors.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *