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$涂鸦智能(TUYA)$ I have been tracking Tuya, another chinese stock for awhile for now but have not investigated the business fundamentals and financials. Being another tech company from China, my current equity exposure in Chinese equities is pretty decent size of my portfolio, which explains why I have not done a further research on Tuya. A company that has its initial public offering back in March 2021 at an IPO price of 21 USD, it seems to me that there is certain amount of price movement details for me to think through in the days to come.
What comes to my attention today for me to write a brief note is that there are a few senators from US calling Tuya a security threat and with such attention, it definitely has a near term price pressure.
At a market capitalisation of 6.74 billion USD with a share price of 11.9 USD, current pricing doesnt seem that cheap, with price pressure coming from potential regulations from US as well as regulations concern overhang back in China. For me, I will definitely stay out of this counter but will monitor. I havent researched the shareholding structure but it is not difficult to see words like Tencent-backed company. Well Big right now just simply isnt the most attractive word right now given the antitrust measures. However, I do believe IOT is an area that China would like to see its companies developing an expertise in given that I have not seen any negative news concerning such sector in China so far.
In summary, I am not going to deploy capital into Tuya given my Chinese equities exposure. For avoidance of doubt, readers should be aware that I do not imply that Tuya may not gain in price appreciation. However, given the current headwinds and my current equity exposure to Chinese equities, I definitely find an investment in Tuya at current pricing not appropriate for my portfolio.
As always, this should not be construed as any investment or trading advice.
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