Sea Ltd SE (former Garena)

[winston]

not vested

Singapore’s Sea Swings Back to Loss After New Rivals Take a Toll

by Olivia Poh

Net loss of $149 million, compared with a profit of $322 million the previous quarter.

4.9% rise in sales from a year earlier to $3.3 billion, versus the average estimate of $3.2 billion.

Source: Bloomberg

https://finance.yahoo.com/news/singapor ... 51951.html

[winston]

vested

Why Sea Limited Stock Dropped Today

By Steve Symington

KEY POINTS

Sea Limited announced stronger-than-expected revenue, but also posted a surprise third-quarter loss.

Management says the company is focusing on driving market share higher in order to maximize long-term profits.

Sea's third-quarter revenue grew 4.9% year over year to $3.31 billion, translating to a net loss of $144 million, or $0.26 per share.

Analysts, on average, were modeling net income of $0.03 per share on lower revenue of $3.11 billion.

E-commerce and other services revenue grew 22.3% year over year to $2.417 billion, including a 31.7% increase in core marketplace revenue to $1.3 billion.

Digital entertainment segment revenue fell by more than a third, to $592.2 million.

Source: TMF

https://www.fool.com/investing/2023/11/ ... gn=article

[winston]

vested

New York-listed Sea fell back into the red, reporting a loss of US$143.9 million for the third quarter of 2023.

The loss missed analysts’ consensus of a profit of US$102 million, and came as the company shifts its focus to growth for its e-commerce segment.

Sea said maximising long-term profitability for the e-commerce business requires scale and strong market leadership.

“To achieve this long-term objective, we look at three key operational factors: growth, current profitability, and market share gain,” said Forrest Li, Sea chairman and chief executive.

This shift to growth is predicated on recent developments, according to Li, with the emergence of new e-commerce competition.

“Our move to self-sufficiency and profitability in the past quarters has significantly improved both our cash reserves and operational efficiency and we see a very good opportunity to build our e-commerce content ecosystem efficiently, especially in live streaming,” said Li.

There is a commitment to maintaining a strong cash position without relying on external funding, with Li noting that Sea’s cash position has increased over US$600 million year on year to over US$7.9 billion.

This puts the company in a strong position to pursue growth, with a focus on maintaining a financial discipline and a strong balance sheet for the long term, said Li. Any investment will be done within its means and at its pace.

Source: Phillips

[winston]

vested

SEA LIMITED (SE US)
Recommendation : BUY
Fair Value : USD 64.00

ONE MAN’S MEAT IS ANOTHER MAN’S POISON.

3Q23 revenue beat but earnings miss as the e-commerce segment turns to an operating loss on the back of investments to grow the business

Positive underlying growth for the e-commerce business, with Indonesia’s ban on e-commerce activities on social media platforms likely to ease competitive pressures

Revise fair value from USD70 to USD64

Sea Limited (Sea) turned in a lacklustre set of results for 3Q23, with adjusted EBITDA and earnings per share (EPS) missing consensus expectations as the e-commerce segment turned to an operating loss.

This was not entirely unexpected given that the company had previously 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]

vested

Nov 14, 2023

Citi maintains 'neutral' on 'high risk' Sea Limited with TP of US$49

by Bryan Wu

Driven by outperformance in Sea’s digital entertainment segment which recorded revenue of US$592.2 million for the quarter, 16.7% higher than Citi’s estimates, while its e-commerce revenue came to US$2.2 billion, largely in line with their expectations

Although digital entertainment revenue fared better than their forecast, bookings, paying users and adjusted ebitda for the segment came in softer.

Their target price of US$49.00 is derived from a combination of US$7.40 per share for Sea’s digital entertainment (Garena) business, US$31.20 per share for its e-commerce Shopee business and US$10.50 per share for its digital financial services or payments business.

Their key downside risks include Shopee continuing to lose market share in e-commerce, Shopee’s losses being larger and more extended than anticipated, a weaker-than-expected performance of Free Fire and the challenges posed by operating in seven regulatory jurisdictions.

Source: The Edge

https://www.theedgesingapore.com/capita ... ed-tp-us49

[winston]

vested

SEA (SE US)
3Q23: Results In Line; 4Q23 Could Be Better Due To Seasonality

SEA’s 9M23 earnings were in line at 85% of our full-year estimate; 3Q23 net loss was expected due to increased sales and marketing expenses for its e-commerce segment despite revenue growth.

We expect 4Q23 earnings to improve qoq with all segments seeing improvement during the festive season.

However, e-commerce margin may remain low due to the high trade-off cost.

Maintain BUY with a target price of US$72.25.

Source: UOBKH

https://research.uobkayhian.com/content ... 24993ea48d

[winston]

vested

Riding the tide

9M23 PATMI missed; raising competiton in the region 9M23 PATMI of USD274.2m was way below our and consensus FY23 forecasts (at 41%/40%) mainly due to increased investments in Shopee (e-commerce) to reaccelerate GMV growth.

In our view, Southeast Asia platforms have been disrupted and are gearing up for another phase of intense competition, exemplified by Shopee’s spending on live streaming and consignment model.

In the medium term, we think this could spur faster e-commerce penetration in the region, though margins could remain depressed.

We cut Shopee's growth outlook and thus reduce our FY23-FY25E net profit forecasts by 31-42%.

Our TP is cut to USD62 (from USD80), based on a lower e-commerce multiple.

Maintain BUY. We continue to see significant longer term potential for the business given its market leading position, ecosystem of services across eCommerce and financial services
coupled with favorable regional dynamics given expectations for both eCommerce and GDP growth in the region.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/350561.pdf

[winston]

not vested

Sea Ltd. – Buying market share
PSR Recommendation: BUY
Target Price: USD61.00

3Q23 revenue was in line with expectations, while the -US$144mn net loss was a disappointment due to a 50% YoY surge in e-commerce sales and marketing (S&M) spend.

9M23 revenue/PATMI were at 71%/68% of our FY23e forecasts.

Shopee is gaining market share against its competitors as GMV and gross orders return to strength, driven in part by Shopee Live.

Market share gains have come at the cost of profitability.

Garena user trends negatively impacted by back-to-school seasonality.

We cut our FY23e/FY24e EBITDA by 19%/16% to reflect a ramp-up of investments in Shopee.

FY23e PATMI is cut by 46% as a result.

Even as its near-term outlook is clouded by increasing spend and competition, we still believe SE is well-positioned to capture e-commerce growth in many under-penetrated emerging markets due to its scale and logistics infrastructure.

We expect FY24 to be profitable given comments from SE regarding its commitment to not overspend on Shopee, plus profitability contribution from Garena and SeaMoney.

We maintain BUY with a reduced DCF target price of US$61 (prev. US$87), and an unchanged WACC/growth rate of 7.6%/3%.

Source: Phillips

https://www.stocksbnb.com/reports/sea-l ... ket-share/

[winston]

Front-loaded spend to reinvigorate growth

Shopee’s reinvestment drive led to a contraction in SE’s 3Q23 adj. EBITDA, but we see green shoots with order growth improving (+24% qoq).

SeaMoney and Garena saw a healthy performance in 3Q23. We expect frontloaded spend on Shopee in 2H23F to turn more targeted in FY24F.

Reiterate Add. We think investors’ pessimism on the lack of visibility on Shopee’s spending plans are largely reflected in the share price.

TP: US$61

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... CD2457C7A9

[winston]

not vested

TikTok Shop returning to Indonesia?

TikTok Shop could re-emerge stronger in Indonesia, via a direct stake investment in Tokopedia, according to Bloomberg News.

This could further intensify e-commerce competition in Indonesia, and lead to prolonged elevated marketing spend by Shopee to protect its market share.

Downgrade to Hold on Shopee’s earnings risks. Valuation undemanding, but we think its share price would stay volatile and newsflow-driven in near term.

TP: US$42

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... C173970D26