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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<ul><li>Tuya reported another solid quarter in a challenging environment, with revenue of $80.1 million, up 9% Y/Y. Gross margin increased Y/Y by 40 bps to 48.4%, while PaaS revenue increased 7% Y/Y to $58.1 million.</li><li>Cash and equivalents decreased to $1,006 million due to a cash dividend and the company has no debt.</li><li>Management had noted that the rollercoaster of 1Q25 could continue, and it seems to have done just that.</li></ul>

Tuya reported another solid quarter in a challenging environment, with revenue of $80.1 million, up 9% Y/Y. Gross margin increased Y/Y by 40 bps to 48.4%, while PaaS revenue increased 7% Y/Y to $58.1 million.Cash and equivalents decreased to $1,006 million due to a cash dividend and the company has no debt.Management had noted that the rollercoaster of 1Q25 could continue, and it seems to have done just that.

Tuya, Inc: 2Q25 Growth Continues in a Challenging Environment

<ul><li>Tuya delivered a strong 1Q25, outperforming seasonal trends, with a record GAAP net profit of $11.0 million and a net margin of 14.8% (more than 20 percentage points higher Y/Y).</li><li>Non-GAAP net profit also surged to $19.3 million, with margins reaching an impressive 25.8%.</li><li>The company’s success reflects disciplined expense control, strong revenue momentum across all segments, and a growing emphasis on AI-driven solutions. </li></ul>

Tuya delivered a strong 1Q25, outperforming seasonal trends, with a record GAAP net profit of $11.0 million and a net margin of 14.8% (more than 20 percentage points higher Y/Y).Non-GAAP net profit also surged to $19.3 million, with margins reaching an impressive 25.8%.The company’s success reflects disciplined expense control, strong revenue momentum across all segments, and a growing emphasis on AI-driven solutions. 

Tuya, Inc. - 1Q25 Revenue Up 21% and Gross Margin Up 70 Basis Points in a Roller Coaster Environment

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 18 November, it was announced that 65 Equity Partners (backed by Temasek) will invest US$100 million (S$134 million) for a 13% stake in Tuya Inc (TUYA US). </li>
<li>Net cash as a percentage of market cap is currently at 92%. Tuya's sales growth and improvement in operating margin in 1Q-3Q 2024 have also been impressive this year.</li>
<li>Comps are trading at average EV/EBITDA of 13.7x in 2025 versus 2.3x for for Tuya. If Tuya continues its turnaround, its valuation gap versus its peers could decrease further. </li>
</ul>


On 18 November, it was announced that 65 Equity Partners (backed by Temasek) will invest US$100 million (S$134 million) for a 13% stake in Tuya Inc (TUYA US). 
Net cash as a percentage of market cap is currently at 92%. Tuya's sales growth and improvement in operating margin in 1Q-3Q 2024 have also been impressive this year.
Comps are trading at average EV/EBITDA of 13.7x in 2025 versus 2.3x for for Tuya. If Tuya continues its turnaround, its valuation gap versus its peers could decrease further. 


Tuya: Improving Sales Growth and Profit Margins Help to Clench Investment by 65 Equity Partners

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US/2391 HK)</a></strong>, a leading IoT cloud platform in China, was listed on the 18th March 2021 at <a href="https://ir.tuya.com/news/news-details/2021/Tuya-Inc.-Announces-Pricing-of-Initial-Public-Offering-3804b1542/default.aspx#:~:text=(%22Tuya%22%20or%20the%20%22,allotment%20option%20for%20underwriters%20to" target="_blank" rel="noopener">US$21.00/ADS</a>. The share price is currently down 92.5%. </li>
<li>Tuya subsequently established a primary dual-listing in Hong Kong on the 5th July 2022, priced at <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/0627/2022062701451.pdf" target="_blank" rel="noopener">HK$19.30/share</a>. Those shares are down ~23% </li>
<li>Temasek-Backed 65 Equity Partners has now acquired a 13% stake (equivalent to ~6.2% of the voting rights) in Tuya, with a view to establishing a secondary listing on the SGX.</li>
</ul>



Tuya Inc (TUYA US/2391 HK), a leading IoT cloud platform in China, was listed on the 18th March 2021 at US$21.00/ADS. The share price is currently down 92.5%. 
Tuya subsequently established a primary dual-listing in Hong Kong on the 5th July 2022, priced at HK$19.30/share. Those shares are down ~23% 
Temasek-Backed 65 Equity Partners has now acquired a 13% stake (equivalent to ~6.2% of the voting rights) in Tuya, with a view to establishing a secondary listing on the SGX.


Tuya Inc (TUYA US/2391 HK): Third Listing A Charm? Not So Fast ...

<ul><li>On April 23, the 2025 Tuya Global Developer Summit officially launched in Shenzhen.</li><li>Tuya, a leading global AI cloud platform service provider, collaborated with representatives from top technology companies and industry experts worldwide to host a series of themed forum sessions.</li><li>The summit followed Tuya’s Investor Day on April 2, which provided an update on its evolving “AI + IoT” strategy and its vision for enabling large-scale AI commercialization.</li></ul>

On April 23, the 2025 Tuya Global Developer Summit officially launched in Shenzhen.Tuya, a leading global AI cloud platform service provider, collaborated with representatives from top technology companies and industry experts worldwide to host a series of themed forum sessions.The summit followed Tuya’s Investor Day on April 2, which provided an update on its evolving “AI + IoT” strategy and its vision for enabling large-scale AI commercialization.

Tuya, Inc: Developer Summit Highlights Next Era of AIoT; Global Sales Limit Impacts of Any Tariffs

United States

Tuya Inc., doing business as Tuya Smart, provides IoT cloud platform. The Company offers solutions which enables brands, retailers, OEMs, and manufacturers to develop, launch, manage, and monetize software-enabled devices and services. Tuya Smart serves customers worldwide.

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Tuya Inc (TUYA US)

Tuya, Inc: 2Q25 Growth Continues in a Challenging Environment

Tuya reported another solid quarter in a challenging environment, with revenue of $80.1 million, up 9% Y/Y. Gross margin increased Y/Y by 40 bps to...

Water Tower Research

Tuya, Inc. - 1Q25 Revenue Up 21% and Gross Margin Up 70 Basis Points in a Roller Coaster Environment

Tuya delivered a strong 1Q25, outperforming seasonal trends, with a record GAAP net profit of $11.0 million and a net margin of 14.8% (more than 20...

Water Tower Research

Tuya: Improving Sales Growth and Profit Margins Help to Clench Investment by 65 Equity Partners

Tuya's net cash as a percentage of market cap is currently at 92%. Tuya's sales growth and improvement in operating margin in 1Q-3Q 2024 have also...

Douglas Kim

Tuya Inc (TUYA US/2391 HK): Third Listing A Charm? Not So Fast ...

This Temasek-led development will have a marginal impact on Tuya. And Temasek-held vehicles on the SGX are already aplenty. Unless you have strong...

David Blennerhassett

Tuya, Inc: Developer Summit Highlights Next Era of AIoT; Global Sales Limit Impacts of Any Tariffs

The summit followed Tuya’s Investor Day on April 2, which provided an update on its evolving “AI + IoT” strategy and its vision for enabling large...

Water Tower Research

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