Sea Limited: Brace For Impact

Seeking Alpha2023-03-06

SummarySea Limited is set to announce its Q4'22 earnings on March 7. Will investors hear more about the company's plan for a quicker path to profitability?SE stock plummeted by almost 90% from its ...

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Comments

Tanyl
2023-03-06
Tanyl
SE will rise
Dawang
2023-03-06
Dawang
How low can it go? Looks bleak, unsure if catalyst would appear on the horizon
mster
2023-03-06
mster
Need a miracle

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Will investors hear more about the company's plan for a quicker path to profitability?SE stock plummeted by almost 90% from its ...</p>\n\n<a href=\"https://seekingalpha.com/article/4584791-sea-limited-brace-for-impact\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SE","symbol_name":"Sea Ltd","start_time":0,"source_url":"https://seekingalpha.com/article/4584791-sea-limited-brace-for-impact","article_id":"1196882951","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1196882951","pubTimestamp":1678108890,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummarySea Limited is set to announce its Q4'22 earnings on March 7. Will investors hear more about ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SE":"Sea Ltd"},"translate_title":"Sea有限公司：为冲击做好准备","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SE":0.9},"content_text":"SummarySea Limited is set to announce its Q4'22 earnings on March 7. Will investors hear more about the company's plan for a quicker path to profitability?SE stock plummeted by almost 90% from its November 2021 highs, hitting rock bottom a year later. The company's road to recovery hinges on balancing growth and profitability.Its growth trajectory may face a significant hurdle in 2023 as the Southeast Asia economy is set to experience a sharp slowdown, hindering SE's ability to navigate its recovery.SE's rebound seems imminent, but be realistic as a return to its all-time highs in the near and medium term seems highly unlikely.Singapore's leading e-commerce company, Sea Limited (NYSE:SE), will report its FQ4'22 and FY22 earnings release on March 7.All eyes will be on CEO Forrest Li & his team as they gear up for a worse macroeconomic environment in 2023.We last updated investors to capitalize on SE's steep pullback in early January 2023, as we observed a bottoming process. Accordingly, SE has outperformed the S&P 500 (SPX) (SPY) since then, posting a total return of 24% relative to SPX's 5% uptick.With the company due to release its earnings soon, will the recent pullback from its early February highs suggest an opportunity to add more positions?Interestingly, Bloomberg reported in late January that Sea Limited was exploring the sale of Phoenix Labs, a game developer it acquired in early 2020. Sea Limited had purchased the company to help \"[deepen] Garena'sexpertise\" in its game development as it pushes beyond its award-winning Free Fire or FF franchise.However, more than three years later, Garena's (Sea Limited's gaming arm) core revenue growth is still driven by FF, which has suffered significantly as the pandemic tailwinds wore off.Bank of America or BofA (BAC) stressed that Garena's sole dependence on FF is problematic: \"A lack of new games is still an overhang for the company, and there is a risk in depending on just one game, given the nature of the industry.\"Hence, it could be possible that the acquisition has not panned out according to Sea Limited's initial expectations of diversifying its gaming pipeline. With the company under pressure to deliver profitability quickly, selling the unit could help to rotate capital and cut costs if Phoenix Labs was a drag on profitability without significant progress made to Garena.Therefore, we encourage investors to pay close attention to management's commentary on these developments, which could be addressed in the Q&A at the upcoming earnings conference.Investors will likely be interested to understand management's update on Shopee. As a reminder, management committed to improving operational efficiencies on its goal for Shopee to reach adjusted EBITDA breakeven exiting Q4'23.JD.com (JD) will reportedly shutter its e-commerce operations in Thailand and Indonesia by the end of March, pivotal e-commerce markets in the Southeast Asian economy.Nikkei Asia reported that the company had \"failed to gain traction\" against the market leaders such as Lazada (BABA) and Shopee, worsened by the \"highly competitive e-commerce landscape in Southeast Asia.\"Interestingly, JD was reportedly getting ready to launch a $1.4B campaign in China \"to attract new users by offering discounts across its online shopping platforms\" from March 6, potentially riding on the recovery of China's economy.Could it be possible that the Southeast Asian growth engine is stalling as it potentially plateaus?Investors could turn their attention to Indonesia, Southeast Asia's largest economy and a critical market for Shopee. Indonesia's economy is expected to slow in 2023 after posting a 5.3% growth in 2022, reaching a \"nine-year high.\"However, dragged down by slower global growth amid inflationary headwinds, the country's central bank expects 2023 growth to slow to 4.9% at the midpoint of its guidance range.Fitch Solutions also presented a recent update on the Southeast Asian economy, expecting the region to demonstrate a \"sharper slowdown ahead for most.\" It also expects Indonesia's 2023 GDP growth to slow to a \"below-trend rate of 4.8%.\"Furthermore, Southeast Asia's leading ride-hailing and delivery leader, Grab Holdings (GRAB) demonstrated that growth is expected to slow significantly at its recent earnings release.Evercore articulated that \"Grab's focus on profitability indicates a meaningful deceleration in segment gross merchandise value growth from 20%-plus to single digits.\"As such, it is becoming increasingly clear that market operators have gotten SE's growth normalization from its unsustainable pandemic craze right, as it fell nearly 90% from its November 2021 highs.SE price chart (weekly)(TradingView)Despite that, we assessed that SE likely bottomed in November 2022, forming a higher low in late December.It rallied further through early February before retracing nearly 25% to its recent lows.The recent pullback seems supported above its 20-week moving average or MA (red line), even though we would have preferred a steeper fall.However, SE appears to continue grinding its way back higher after a massive collapse that likely shook out many investors.Rating: Speculative Buy (Reiterated).","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9940467194,"gmtCreate":1678116427318,"gmtModify":1678116431016,"author":{"id":"4087109808120260","authorId":"4087109808120260","name":"Tanyl","avatar":"https://static.tigerbbs.com/174329973340cf0f5b68791ee5b08afd","vip":1,"crmLevel":9,"crmLevelSwitch":1,"idStr":"4087109808120260","authorIdStr":"4087109808120260"},"htmlText":"SE will rise&nbsp;","listText":"SE will rise&nbsp;","text":"SE will rise","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9940467194","repostId":1196882951,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9940485579,"gmtCreate":1678113344092,"gmtModify":1678113346969,"author":{"id":"3579482809178950","authorId":"3579482809178950","name":"Dawang","avatar":"https://static.tigerbbs.com/d0f01f2346125f600328ffd48beb3a4c","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":4,"crmLevelSwitch":0,"idStr":"3579482809178950","authorIdStr":"3579482809178950"},"htmlText":"How low can it go? Looks bleak, unsure if catalyst would appear on the horizon","listText":"How low can it go? Looks bleak, unsure if catalyst would appear on the horizon","text":"How low can it go? Looks bleak, unsure if catalyst would appear on the horizon","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9940485579","repostId":1196882951,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9940480057,"gmtCreate":1678110526479,"gmtModify":1678110530835,"author":{"id":"4102815868703010","authorId":"4102815868703010","name":"mster","avatar":"https://community-static.tradeup.com/news/81a8fe18bd419696551df5320d8db477","vip":1,"crmLevel":7,"crmLevelSwitch":0,"idStr":"4102815868703010","authorIdStr":"4102815868703010"},"htmlText":"Need a miracle&nbsp;","listText":"Need a miracle&nbsp;","text":"Need a miracle","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9940480057","repostId":1196882951,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":68,"commentSize":3,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1196882951"}