Sea Ltd SE (former Garena)

[winston]

not vested

Shopee Live progresses during 9.9 campaign

Shopee saw an 8x and 6.5x boost in sales in Thailand and Malaysia during the 9.9 campaign thanks to sales led by Shopee Live

We project SE e-commerce GMV to grow by 27% y/y in FY24F but expect the growth to moderate to 20% in FY25F amid rising take-rates

Maintain BUY with an unchanged TP of USD99

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=21196

[winston]

not vested

SEA (SE US) Making Strategic Waves In A Sea Of Opportunities

We saw several positive developments for SEA over the last few weeks, including:
a) Shopee's partnership with YouTube to drive site traffic,
b) second round of take rate hikes this year which indicates easing competition, and
c) Thailand ‘svirtual bank licence application which could expand SeaMoney’s ecosystem.

We expect to see further re-rating for SEA as it builds up stronger moats.

Maintain BUY with a 28% higher target price of US$112.54.

Source: UOBKH

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://39646150.fs1.hubspotusercontent-na1.net/hubfs/39646150/Research/Sea%20(SE%20US).pdf?utm_medium=email&_hsenc=p2ANqtz-_feaCYsWeY_iM-yKpp2K-Hw5vCHBogJHYdydpJ8WMsHYjCZUC8ar_qRPnDS8AWAEwM-6k7-hzqS2TY6l3DRi3_hpaFXQ&_hsmi=326840296&utm_content=326840296&utm_source=hs_email

[winston]

Sea Limited (SE US)

Recommendation : BUY
Fair Value : USD 110.00

UP, UP AND AWAY
Sea Limited’s share price hits a new 52-week high on 1 Oct 2024
A more benign competitive landscape has provided positive tailwinds
Revise fair value (FV) estimate to USD110

Sea Limited (Sea) is a leading global consumer internet company founded in Singapore, operating three core businesses across digital entertainment (Garena), e-commerce (Shopee), as well as digital payments and financial services (SeaMoney).

In 2023, the company guided on a realignment of strategy to increase investments into Shopee and grow its market share, which may lead to losses from time to time.

With the company’s businesses enjoying strong potential in a growing region, we believe that the management is repositioning the company to tap on further growth going forward, which is the right strategy in the long term.

In the near term, however, we think investors need to be patient with this stock as it undergoes a reset of investor expectations regarding the change in business strategy.

Source: OCBC

[winston]

New monetisation avenues to achieve margin targets sooner

Lift TP to USD110;

Raise earnings est. by 2-9% E-commerce competition remains benign, leading to monetisation initiatives such as seller take-rate increases (1-3%) and advertising growth, which in turn fast forwards margin improvement.

We raise our 2030 e-commerce Adj. EBITDA to GMV margins to 2.7% by 2030 (from 1.9% previously).

We think Shopee is comfortably positioned to exceed its long-term e-commerce Adj. EBITDA to GMV margins target of 2-3%.

However, we think the company is likely to cap ecommerce margins to keep the space competitive to maintain its dominance and/or counter entry of aggressive new entrants.

Absolute EBITDA though can expand, helped by elevated GMV growth momentum besides lifting growth of DFS business, which is highly tied to e-commerce, in our view.

Raise TP to USD110 and reiterate BUY. MIBG Adj. EBITDA estimates are 10-14% above the Street.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/409722.pdf

[winston]

not vested

Sea needs more than good earnings to sustain 175% comeback rally

Expected to deliver solid results next Tuesday (Oct 12), with its e-commerce arm Shopee moving into the black on an adjusted basis.

Analysts forecast the value of goods sold by the division rose in the mid-20 per cent range.

Digital entertainment business is expected to post a third-quarter revenue decline of 20 per cent compared with a year earlier.

Trading at 22.9 times forward enterprise value.

Source: Business Times

https://www.businesstimes.com.sg/compan ... back-rally

[winston]

not vested

Gaming and e-commerce player Sea reported a US$153.3 million net profit for the third quarter of 2024, reversing from a US$144 million loss a year ago, and marking a second consecutive quarter in the black.

The figure beat estimates from a Bloomberg poll of 13 analysts, which projected a net profit of US$128.6 million.

Revenue for the quarter also rose 30.8 per cent to US$4.3 billion from US$3.3 billion in Q3 2023.

Source: Phillips

[winston]

not vested

3Q24: Robust Quarter As Shopee Returns To Profitability

SEA posted strong 3Q24 results that were in line with our expectations, driven by a better profit profile from all business segments.

This was on the back of:
a) better profitability from higher take-rates for the e-commerce segment,
b) strong growth momentum from the DFS segment, and
c) increased bookings from a highly engaged user base for the group’s Free Fire game.

Given the group’s improving outlook, we maintain BUY with a higher target price of US$138.70.

Source: UOBKH

https://39646150.fs1.hubspotusercontent ... 20(SE%20US)%20241113.pdf?utm_medium=email&_hsenc=p2ANqtz-8_FGrl9Lp8z-gNqe-czDpjJdKRyQD3EU-1vW0XPOUqMua8oeHQ_NUINzxil5QDIqx9k-VcJAcdVOaitnnKSyNZqi80Qw&_hsmi=333658501&utm_content=333658501&utm_source=hs_email

[winston]

not vested

Sea Limited (SE US)

Recommendation : BUY
Fair Value : USD 135.00

Growing from strength to strength

• 3Q24 revenue jumped 30.8% year-on-year (YoY), beating street’s expectations; overall business remained profitable

• Management delivers on positive e-commerce adjusted EBITDA and believes Shopee is well on track to deliver on mid-20% gross merchandise value (GMV) growth for FY24

• Revise fair value (FV) estimate to USD135

Sea Limited (Sea) is a leading global consumer internet company founded in Singapore, operating three core businesses across digital entertainment (Garena), e-commerce (Shopee), as well as digital payments and financial services (SeaMoney).

In 2023, the company guided on a realignment of strategy to increase investments into Shopee and grow its market share; this resulted in a sharp pullback in its stock price amidst expectations that the business may go into losses from time to time.

Since then, however, Sea’s investments are starting to bear fruits, with Shopee increasing take rates and achieving positive adjusted EBITDA in 3Q24 despite the entrance of new (cross-border) competitors.

Sea’s Digital Financial Services (DFS) have also been a dark horse, riding strong growth momentum to displace Garena as the company’s second largest segment.

With the company’s businesses enjoying strong potential in a growing region, we believe that management’s repositioning of the company for sustainable and profitable growth is the right strategy in the long term.

Source: OCBC

[winston]

not vested

Sea’s Profit Draws Bullish Analyst Calls After $43 Billion Rally

by Andreo Calonzo

Source: Bloomberg

https://finance.yahoo.com/news/sea-prof ... 02012.html

[winston]

4Q24 Results Preview: Growth Across All Segments, But Expect Some Forex Drag

We expect SEA to release its 4Q24 results in the first week of March.

We estimate 4Q24 net profit at US$200m-210m and full-year net profit at US$407m-417m, which is 13-16% higher than our forecasts, but 15-17% lower than consensus estimates.

Expect a better earnings profile from all business segments, driven by:
a) a rise in take rates for Shopee,
b) deeper user engagement for the gaming segment, and
c) strong loanbook growth from the DFS segment.

Maintain BUY. Target price: US$138.70.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email