10 Worst Chinese Stocks to Buy Right Now According to Short Sellers

4) DouYu International Holdings Limited (NASDAQ:DOYU)

Short % of Float (8/30/2024): 13.27%

Number of Hedge Fund Holders: 8

DouYu International Holdings Limited (NASDAQ:DOYU) is a game-centric live-streaming platform in China. It operates its platform on both PC and mobile apps.

The company released its 2Q 2024 financial results, with revenues declining 25.9% YoY to reach $142.01 million, and missing the analyst consensus estimate of $186.96 million. Short sellers believe that the soft environment in this sector is expected to continue, which might lead to product discounting and a reduction in promotional events. This might impact DouYu International Holdings Limited (NASDAQ:DOYU)’s gross margin. Moreover, the stiff competition from short video platforms along with the downturn in the macroeconomic environment might continue to weigh over its performance in the short term.

Therefore, increased competitive pressures from alternative streaming platforms might continue to hurt the user base and revenue streams of DouYu International Holdings Limited (NASDAQ:DOYU). Weakness in user spending might pose challenges to future growth​, as per short sellers.

That being said, Wall Street analysts believe that DouYu International Holdings Limited (NASDAQ:DOYU) should be supported by strategies focused on enhancing streamer engagement and revenue generation. These strategies include revising the streamer recruitment model and improving the reward mechanism. The company highlighted the collaborations with game developers, emphasizing revenue diversification with the help of game membership services and prop sales.

DouYu International Holdings Limited (NASDAQ:DOYU) continues to focus on enriching its content ecosystem and enhancing its diversified commercialization capabilities. Its revenue and earnings growth should be aided by a diverse and game-centric content ecosystem, courtesy of its deep-rooted streamer resources and premium content.

HSBC upgraded the company’s shares from a “Reduce” rating to a “Hold” rating, setting a price target of $15.00 on 3^rd July. Notably, DouYu International Holdings Limited (NASDAQ:DOYU) was in the portfolios of 8 hedge funds.