Sea Ltd SE (former Garena)

[winston]

not vested

Sea Limited (SE US) - Macro uncertainties leading to wider Shopee guidance range

Sea Limited (Sea) delivered a good set of 1QFY22 results (ended 31st March 2022).

Total adjusted EBITDA loss came in at USD510m, which we believe was narrower than expected – we attribute this to lower-than-expected losses in e-commerce.

Sea has revised its 2022 e-commerce GAAP revenue guidance to be between USD8.5b-USD9.1b (previously USD8.9b-USD9.1b).

While management believes that its previous guidance is still achievable, this new set of guidance reflects its expectations around the upcoming macro uncertainties (e.g. inflation, rising interest rates, supply chain challenges).

Management noted that Shopee is on track to achieve positive adjusted EBITDA after allocation of HQ cost by the end of 2023 in ASEAN + Taiwan.

While management has seen early signs of stabilisation in Free Fire’s monthly user trends towards the end of 1QFY22, the longer-term impact of reopening remains to be seen.

Management also believes that SeaMoney remains on track to achieve positive cash flow while at the same time continuing to scale rapidly and efficiently.

All considered, the e-commerce outlook does appear to be a tad cloudier in light of macro uncertainties, while the market remains concerned over the lack of clarity into Garena’s pipeline.

Furthermore, a backdrop of rising yields is likely to continue to pose challenges to high growth stocks with minimal/no earnings.

Following slight adjustments while still retaining our ESG discount of 5% (to account for governance risk), our FV eases from USD93 to USD88. HOLD.

Source: OCBC

[winston]

not vested

Can Sea’s fintech ambition excite investors the way Free Fire did?

by SHARANYA PILLAI

For the first quarter ended March, Sea’s revenue surged 64.4 per cent to US$2.9 billion.

Investors appeared to shrug off the widening of its net loss to US$445.1 million (excluding share-based compensation) from the US$320 million loss a year ago.

Source: Business Times

https://www.businesstimes.com.sg/garage ... e-fire-did

[winston]

not vested

SEA Ltd (SE US): Clearer path to profitability [BUY, TP US$126]

Sea Ltd (SE) is likely to turn EBITDA positive in FY24F

Gaming to stabilise with Free Fire MAX popularity while e-commerce losses narrow; we reduce FY23F e-commerce EBITDA losses by 27%

Maintain BUY with a higher TP of US$126 as we shift from revenue to EBITDA-based metrics based on normalized EBITDA margins in five-years.

Source: DBS

[winston]

vested

Sea’s e-commerce arm Shopee to cut staff across Southeast Asia

The layoffs have affected employees across several of the company’s Southeast Asian markets including Indonesia, Thailand and Vietnam, sources told DealStreetAsia. The company is said to have emailed employees affected by the layoffs, the sources added.

Shopee’s payments arm ShopeePay and food delivery business ShopeeFood are also said to be facing cuts.

Two sources aware of the matter said nearly half of Shopee Thailand’s payment and food delivery teams have been affected by the downsizing.

While Sea Group’s business continues to show signs of improvement in overall profitability, most of its revenue continues to come from its gaming arm Garena.

Sea Group’s first-quarter 2022 financials reflected a 64.4% year-on-year increase in Generally Accepted Accounting Principles revenue at US$2.9 billion, with gross profits soaring 81.3% to US$1.2 billion over the same period.

Shopee’s business, while still losing money, has also reflected improvements, with a 71.3% year-on-year increase in orders to US$1.9 billion in the first quarter of 2022 while gross merchandise value rose 38.7% to US$17.4 billion.

Importantly, Shopee’s gross profit margin for e-commerce increased year on year, with faster growth in transaction-based fees and advertising income generating higher margins versus other value-added services.

The company also appears to be facing setbacks on some of its ambitious internationalization plans, including its forays into Europe and Latin America. Shopee, which has operations in Poland and Spain, decided to pull out of France after only five months as it was not meeting expectations.

Source: Nikkei

https://www.freemalaysiatoday.com/categ ... -366156373

[winston]

not vested

Baron New Asia Fund on Sea Limited (NYSE:SE) in its Q1 2022 investor letter:

“Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil.

We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”

[winston]

not vested

Sea is Tencent's surrogate in the Asean region: Maybank

by Khairani Afifi Noordin

Sea is currently trading at a 78% discount to its peak in October 2021 and that markets are undervaluing the company based on Maybank’s sum of the parts (SOTP) target price of US$105.

Source: The Edge

https://www.theedgesingapore.com/news/b ... on-maybank

[winston]

not vested

Sea’s Q2 2022 revenue growth fails to stem widening losses

by BENJAMIN CHER

29 per cent jump in Q2 2022 revenue from US$2.3 billion to US$2.9 billion, mainly driven by revenue contribution from e-commerce arm Shopee and digital financial services.

Losses for the period have widened, up 114.7 per cent to US$931.2 million from US$433.7 million.

Shopee: Adjusted earning before interest, tax, depreciation and amortisation (Ebitda) per order of 21 per cent to US$0.33 from US$0.41 for Q2 2022.

Garena: 12.1 per cent drop in revenue from US$1 billion to US$900.3 million for the quarter.

SeaMoney: 214.4 per cent jump in revenue to US$279 million in Q2 2022.

Source: Business Times

https://www.businesstimes.com.sg/garage ... osses?s=08

[winston]

not vested

Sea Ltd (SE US): <Alert> Bigger focus on profitability even at the cost of revenue growth [BUY, TP US$126]

Group adjusted EBITDA loss of US$506m flat q-o-q was in line although GAAP revenue missed our estimates mainly due to softer e-commerce Gross Merchandise Volume (GMV)

Reversing two consecutive quarters of declining users, Quarterly Active Users (QAU) at Digital Entertainment rose by 3.4m users sequentially.

Maintain BUY with an unchanged TP of US$126, based on FY27F normalized EBITDA margins

Source: DBS

[winston]

not vested

TENCENT-backed Sea Quarterly Results Miss, Withdraws Rev. Forecast for E-commerce

TENCENT (00700.HK) backed Sea (SE.US), a global technology firm based in Singapore, announced that, for the quarter ended 30 June 2022, the net loss of the group amounted to USD931 million, representing a YoY increase of 1.15x.

The EBITDA loss widened 20x YoY to USD506 million, missing the market forecast of a loss of USD482 million.

The company also withdrew the revenue forecast of USD8.5 billion for its e-commerce business.

Source: AAStocks Financial News

[winston]

not vested

Why Sea Limited Stock Crashed Tuesday Morning

By Danny Vena

KEY POINTS
While Sea Limited's top line grew, its losses ballooned.
Perhaps of greater concern to investors, the company suspended its full-year guidance.

Driving revenue higher were e-commerce sales on the company's Shopee platform of $1.7 billion, up 51% year over year, while gross merchandise volume (GMV) -- the value of products sold on its website -- climbed to $19 billion, up 27%. At the same time, the number of orders jumped to 2 billion, up 42%.

Sea Limited suspended its previously issued revenue guidance.

Source: TMF

https://www.fool.com/investing/2022/08/ ... gn=article