Benzinga | Dec 27, 2021 07:46AM EST

Read Why BofA Resumed Coverage On DouYu

* BofA analyst Lei Zhang resumed coverage of DouYu International Holdings Ltd (NASDAQ:DOYU) with an Underperform and price target of $3.30, implying a 29.4% upside.

* The re-rating follows the termination of the merger offer with HUYA Inc (NYSE:HUYA).

* Zhang sees multiple ongoing regulation changes impacting DouYu's business development.

* DouYu is a game-centric live streaming platform in China.

* HUYA is a technology-driven content company with live game streaming as its core business and focuses on building a live broadcast platform.

* Further, rising competition with Huya and Bilibili Inc (NASDAQ:BILI) will lead to growth pressure "across the board," Zhang says.

* Zhang says competition in game streaming is intensifying.

* Price Action: DOYU shares closed lower by 0.39% at $2.55 on Thursday.