SEA THE REAL DEAL!

Hi all! SEA is in the news again after a pretty good session of trading yesterday which saw a gain of 6%. However, there are still many disbelievers out there with regards to the sustainability of this rally due to past pains and losses or unwarranted negative sentiment as well as unfounded economic theories.

I like to reiterate that there is REAL great value in the stock at current prices and l am very bullish at these price levels. SEA is definitely a worthwhile portfolio investment stock of great value at the moment. Personally, l believe the stock price can double within the next six months after Q42023 earnings report and increase a few hundred percent within the next 3 years. This strong belief is rooted in the great fundamentals of the company headed by a very capable management team.

FAVOURABLE MARKET CONDITIONS FOR GROWTH AND EARNINGS 

The most important factor in my total conviction that SEA is the REAL DEAL is the value of this oversold stock based on irrational sentiments. The current market conditions much improved for this proven company which is the leader in South East Asian e-commerce. The ban on direct sales on social media by Indonesia government has been mentioned many times. Many agreed that the impact will be worst for tik tok shop and Shopee is going to benefit from the aftermath. Nevertheless, a great deal of people forget Shopee is the undisputed No1 most visited website for e-commerce in Indonesia anyway or the most popular platform with active users in Brazil. Both Indonesia and Brazil e-commerce markets is worth well over $40 billion dollars per annum. Shopee is a leading major player in both markets.

Combine this change in growth and earnings landscape with the fact that regulatory changes in India is also favourable, the impact is enormous. SEA digital entertainment arm Garena is going to relaunch Free Fire in India as announced recently and is also aiming at its over 70 billion dollars per annum e-commerce market. This is a tremendous opportunity for growth and earnings if they are successful in India market.

Seawallet growth and earnings is also stable and gaining traction. Although all three business segments are profitable last quarter, we have negative investors worrying about potential losses in the 3rd and 4th quarters as SEA expand on its Shopee operations. In my view, this choice is a correct one as now is the best time to gain market share with favourable regulatory conditions. E-commerce is set to reach a value of 6.3 trillion globally this year and 8.1 trillion in 2026. The growth is a positive uptrend that is validated. Therefore, a viable and profitable market leader like SEA should focus on gaining market share in a growing industry.

IS SEA A VALUE TRAP?

[LOL]  Just because it has a low Altman Z score of 1.78? Come on bankruptcy is very far away for this only profitable e-commerce platform in South East Asia along with two other business segments that is profitable as well. SEA has a war chest of over 7 billion dollars and strong cash flow.This is the stock that the great investor George Soros invest in for e-commerce, digital entertainment and fintech. He is a shrewd investor who will recognise a weak fundamentals stock for shorting in a second so you think SEA current great value is fake? Last l know another stock in George Soros portfolio Blue Apron Holdings is taken over with a premium of 137% at $13 per share and Nike posted very strong earnings despite being oversold this year as well.

Lastly, l like to point out that the market can be wrong to oversell on market leaders like Tesla at the end of last year. Even Amazon prices is depressed in its early years for the e-commerce industry. Block out the market noises as well as recent weeks of unusual big capital outflows and do not miss this SEA trip to the moon! Let's take out the $45 short term resistance level tonight!