Sea Ltd SE (former Garena)

[winston]

not vested

SEA (SE US)

E-Commerce Benefitting From Better Monetisation And Leading Market Share

SEA’s share price has appreciated >15% since it turned profitable for the first time in
4Q22.

Though GMV growth may slow down, Shopee’s continued dominance in its established markets
and growth in new markets should allow it to continue increasing commission fees and
expanding its logistics structure.

Hence, we expect margins to improve moving forward. Also, we see limited threat from the
new competitors in Southeast Asia for now.

Maintain BUY and target price of US$94.34.

Source: UOBKH

https://research.uobkayhian.com/content ... ef36f94109

[winston]

Sea to post improved margins as Shopee continues market dominance: UOB Kay Hian

by Khairani Afifi Noordin

Continued dominance in its established markets and growth in new markets should allow it to continue increasing commission fees as well as expand its logistics structure. As such, the analysts expect margins to improve moving forward.

Gross merchandise value (GMV) of US$47.9 billion in FY2022. This is followed by Lazada, with a GMV of US$20.1 billion.

Shopee Singapore had 13.6 million visits in February as compared with Lazada Singapore’s 5.8 million visits, despite starting its Singapore operations three years after Lazada.

UOBKH maintains its earnings forecast for Sea at US$935 million, US$1.27 billion and US$2.06 billion for 2023 to 2025 respectively.

Source: The Edge

https://www.theedgesingapore.com/capita ... rketreport

[winston]

not vested

Sea Limited – BUY

Expect better earnings in upcoming quarters mainly from the successful monetisation
of its e-commerce arm Shopee, with stable margins mainly supported by:
a) value-added services, and
b) higher transaction-based fees from its operating markets.

Shopee is one of the most cost-efficient e-commerce players in the South East Asia region with positive earnings. It is also further supported by its fast-growing digital financial services segment.

The digital financial services segment would be the next mover with its advantage of
leveraging Shopee to gain a strong user base.

We expect SeaMoney to continue to play an important role as an e-commerce enabler via highly relevant insight from its ecommerce platform for more effective underwriting and better offerings to its customers.

We also expect more significant contribution from its digital banking platforms on the back
of its fast-growing asset base (thanks to its attractive saving rates) and lower cost of
funding.

Maintain BUY with a target price of US$94.34 on the back of its potential first annual
net profit in 2023 with first positive operating income from its e-commerce and digital
financial service segments.

SHARE PRICE CATALYST

Events:
a) Better earnings on the back of higher-than-expected gross merchandise value
for its e-commerce segment, higher digital entertainment contribution and higher earnings
growth from its digital financial services segment.

Timeline: 3-6 months.

Source: UOBKH

[winston]

not vested

Sea Ltd shares plunge 10% after Q2 earnings miss

by Senad Karaahmetovic

Sea reported revenue of $3.10 billion for the second quarter, missing the estimated figure of $3.26B.

Earnings per share came in at $0.54, again lower than the consensus of $0.66.

The company's e-commerce revenue amounted to $2.32B, exceeding the estimated $2.25B.

However, the company’s digital entertainment revenue was reported as $529.4 million, slightly below the estimated $535.3M.

Li said that Sea is looking to tap recent developments in user engagement through live-streaming, short-form videos and affiliate programmes. These developments will offer opportunities to grow and expand its addressable market.

Source: investing.com

https://www.investing.com/news/stock-ma ... SI-3154374

[winston]

vested

Sea Limited

Southeast Asian holding company Sea Limited reported mixed results in the first quarter.

Total revenue rose just 5% year over year to $3 billion as strong growth in the e-commerce and fintech segments was largely offset by weakness in the digital entertainment segment.

But the company still made progress on cost control, generating $606 million in cash from operations, much improved from the $723 million it burned last year.

Sea Limited has subsidiaries in e-commerce, digital financial services, and digital entertainment.

Specifically, e-commerce subsidiary Shopee is the most-visited online marketplace in Southeast Asia and Taiwan, and its gaining momentum in parts of Latin America.

The company has strategically reinforced its leadership with adjacent services for advertising, fulfillment and payment processing.

Online retail sales across all relevant geographies are expected to rise at 12% annually through 2027, according to Statista.

Fintech subsidiary SeaMoney processes payments for Shopee merchants, but it also provides financial services to third-party merchants and consumers. Its relationship with Shopee has been a powerful tailwind, and SeaMoney should continue to benefit as online shopping becomes more prevalent. Digital payment volume across Southeast Asia is expected to grow at a 14% rate annually through 2027, according to Statista.

Finally, digital entertainment subsidiary Garena is best known for developing Free Fire, a mobile game that saw its popularity slip and then rebound in recent quarters. Garena Free Fire was the ninth-most downloaded game last year, but it took the No. 3 spot in the first quarter, then improved to No. 2 in the second quarter.

Digital entertainment revenue still fell 43% year over year in the first quarter as paying users fell nearly 40%, but the resurgence in popularity is encouraging. The global mobile game market is expected to grow at 7% annually through 2027, according to Statista.

Here's the bottom line: As inflationary headwinds to consumer spending continue to ease, Sea Limited should be able to reaccelerate revenue growth into the mid-teens or higher given its strong presence in e-commerce, digital financial services, and mobile gaming. That makes its current valuation of 2.6 times sales look quite reasonable, and it's certainly a bargain compared to the three-year average of 12.7 times sales.

As with PayPal, Sea Limited shareholders are unlikely to see triple-digit returns in the next 12 months, but investors willing to hold this growth stock for at least three years should consider buying a small position today.

Source: TMF

https://www.fool.com/investing/2023/08/ ... gn=article

[winston]

vested

SEA (SE US)
2Q23: Consistent Profitability, Reinvesting for E-commerce Growth

2Q23 earnings surpassed our expectations, primarily driven by the DFS segment, particularly the credit business.

Increased quarterly earnings can be attributed to the DE sector, reflecting a rise in active and paying users.

E-commerce profitability persisted in 2Q23, while SEA was relooking into more growth opportunities.

Maintain BUY with target price of US$94.34, with the belief that SEA will become the first
Southeast Asian e-commerce company to achieve positive earnings in 2023.

Source: UOBKH

https://research.uobkayhian.com/content ... b155d7ab58

[winston]

vested

Sea Ltd.’s 2Q23 revenue missed estimates (US$3.1bn vs est. US$3.2bn) after its e-commerce division, Shopee, posted its slowest growth on record as consumers held back spending on Internet and discretionary services, sending its U.S.-listed shares down 15% in trading before the bell.

2Q23 revenue grew only 5% YoY, dragged by a decline in gaming revenue, and decelerating growth in Shopee (21% YoY).

Overall profitability continued to improve, with the company posting US$331mn in profits, a US$1.3bn improvement from a year ago.

However, with Sea looking to boost growth through ramping its e-commerce investments, we could see some headwinds to increasing overall near-term profitability.

Source: Phillips

[winston]

vested

Back to reinvestment mode

Shopee (e-commerce) disappointed in 2Q23 as investments to reaccelerate growth led to adj. EBITDA falling 28% qoq while revenue only rose 2% qoq.

Shopee’s strategic pivot to reaccelerate growth could lead to near-term earnings weakness for SE despite positives from gaming and fintech units.

Reiterate Add with a lower SOP-based TP of US$65 on lower e-commerce target multiples. We now prefer Grab within ASEAN Internet space.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 86A8AF6101

[winston]

Billionaire Duo Behind Singapore’s Sea Lose $1.6 Billion In Biggest Share Price Drop After Earnings

by Zinnia Lee

Source: Forbes

https://www.forbes.com/sites/zinnialee/ ... b798e84fa8

[winston]

vested

Shopee-owner Sea signals growth over profits after weak Q2 performance

By Yuvraj Malik

Sea Ltd (SE.N) signaled on Tuesday it will boost investments in its core e-commerce business which may lead to losses in some quarters, pivoting its strategy after months of cost cuts and weak performance in the second quarter.

Source: Reuters

Shopee-owner Sea signals growth over profits after weak Q2 performance
By Yuvraj Malik