Sea Ltd SE (former Garena)

[winston]

SEA (SE US)
4Q22: Results Beat With Strong Focus On Cost Efficiency; Upgrade To BUY

SEA’s 4Q22 core earnings of US$271m beat our and the street’s estimates that are still
expecting a loss, due to strong cost efficiency in significantly reducing sales and
marketing expenses.

Although there could be near-term fluctuations in the performance of SEA, management remains confident on its long-term growth potential.

We have raised our 2023 earnings to US$935m, from a US$1.6b loss after this earnings surprise.
Upgrade to BUY with a higher target price of US$94.34.

Source: UOBKH

https://research.uobkayhian.com/content ... 4fe3e41fe1

[winston]

not vested

Analysts lift Sea Limited's TPs after 4QFY2022 earnings exceed expectations; UOB Kay Hian upgrades to 'buy'

by Felicia Tan

The strong net profit growth in FY2023 would be mainly driven by strong cost efficiency and higher transaction fee for its e-commerce segment, higher contribution from its value-added service in logistics and higher contribution from its digital financial services (DFS) segment.

Source: The Edge

https://www.theedgesingapore.com/capita ... ations-uob

[winston]

not vested

The Bulls Are Currently in Control of This Stock

by Tara Young

Buy Levels: If you want to get in on this trade, you can purchase shares of SE above the price of around $81.50.

TP: Our target prices are $90 and $98 in the next 3-6 months.

SL: To limit risk, place stop-loss at $76.00. Note that the stop-loss is on a closing basis.

Source: Trades Of The Day

https://tradesoftheday.com/2023/03/08/t ... s-stock-2/

[winston]

not vested

En route to profitability
4QFY22 is a record quarter for Sea

Sea’s FY22 USD3.5b (+7% YoY) revenue beat our/consensus’ full-year expectation (101%/104%), thanks to deeper monetisation on Shopee, which saw take-rate hit a new record (+1.6% pts QoQ).

Stripping out exceptional items of USD150m, Sea swung to a net profit for 4Q22 at USD271m from a year-ago loss.

We believe Sea’s faster-than-expected improvement in cost measures and e-commerce and fintech monetisation should enable it to break-even in FY23E at the adjusted EBITDA level.

Our SOTP-based TP rises 7% to USD105 on a higher e-commerce multiple of 3.4x (from 1.9x) as we roll forward our valuations to FY24E.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/307911.pdf

[winston]

not vested

Sea Limited (SE US) - Shock and awe on profitability pivot

Sea Limited (Sea) showcased a “shock and awe” earnings report, turning a GAAP loss of USD565m in 3Q22 to a GAAP profit of USD427m in 4Q22.

Management has completed the path to profitability within 2 quarters and can now focus on growing its businesses going forward.

However, underlying revenue trends continue to be weak for most of their business segments, and management highlighting near-term weaknesses as well.

The company has taken a knife to its cost structure and its balance sheet now looks much healthier.

Overall, with this set of results, the narrative of Sea has shifted, and we think investors will now become comfortable with the cost structure of the company. Therefore, we move our FV higher from USD84 to USD95. BUY.

Source: OCBC

[winston]

not vested

SEA (SE US)
Enough Muscles For Shopee-ng?

SEA’s share price has appreciated more than 10% since it turned profitable for the first
time in 4Q22.

While the e-commerce segment’s GMV may slow in the coming quarters, we expect its margin to continue improving from increasing commission fees and expansion of its own logistic services.

In addition, the digital financial services could leverage on Shopee’s strong user base to provide more effective underwriting and better offerings.

Maintain BUY and target price of US$94.34.

Source: UOBKH

https://research.uobkayhian.com/content ... dda86e8a2b

[winston]

not vested

DBS ups Sea Limited's TP to US$103 as it sees a turnaround in its e-commerce and fintech segments

by Felicia Tan

We believe e-commerce’s turnaround, achieving adjusted ebitda positive across each market by FY2023, will be the key share price catalyst.

This shall outweigh potential digital entertainment weaknesses owing to high inflation, which might hurt discretionary spending on games,

The analyst is also estimating Sea’s TP drop to US$68 in a bear case scenario. This target price assumes long-term group ebitda margins of [around] 18% (20% under base case) and 12x FY2027 ebitda (15x under the base case) due to irrational competition.

Source: The Edge

https://www.theedgesingapore.com/capita ... nd-fintech

[winston]

Scaling SeaMoney in Singapore

Riding on ecosystem synergies, we expect SE’s digital bank in Singapore to reach the initial regulatory deposit cap rapidly with minimal acquisition costs.

Similarly, Shopee’s vast customer and merchant base allows SeaMoney to easily cross-sell its credit offerings while minimising credit risks, in our view.

We believe SE is now reaping fruits of its labour with the launch of multiple fintech products to further monetise its customer base.

Reiterate Add. TP - US$105

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 321E829413

[winston]

not vested

Focusing on sustainable profitability

We think SE could report an earnings beat for 1Q23F as it continues its strong cost-efficiency execution post a rapid turnaround to a profit in 4Q22.

Competitive landscape for Southeast Asian e-commerce industry remains healthy with players focusing on raising monetisation while trimming costs.

FY23F is a year of “fine-tuning” for SE as it looks to drive sustainable topline growth and profitability.

We reiterate our Add call with a TP of US$105

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... CBF5848B6F

[winston]

Tencent-Backed Sea’s 112% Rally Has Reasons to Run

by Ishika Mookerjee

The firm’s American depositary receipts had surged to a record $366.99 in October 2021 before a bursting of the pandemic-era tech bubble saw them crash to just $40.92 in November. They closed at $86.71 Thursday, extending gains from last year’s low to 112%.

Will report first-quarter net income of $223 million next week, versus a loss of $580 million in the same period a year ago, according to the average estimate in a Bloomberg survey.

The Singapore-based firm reported its first-ever quarterly net profit in March, about 14 years after its founding.

The improving numbers are the result of an overhaul made last year, which included cutting thousands of jobs, exiting markets such as India, and trimming more than $700 million from quarterly sales and marketing expenses.

Source: Bloomberg

https://finance.yahoo.com/news/tencent- ... 00369.html