Singapore conglomerate$Sea Ltd (SE) $It is expected to beNov 11 before the market opensAnnounced its third-quarter earnings report, and the market widely expected its results to show upMultifold growth。
This company has a layout in many fields such as e-commerce, games and finance. Analysts expect that Sea'sEarnings per share (EPS) of $0.95，Revenue of $5.62 billion, which means that compared with the same period last year, revenue willUp nearly 31%。
Over the past two years, Sea's performance has been relatively consistent-with13% Quarterly EPS Beats EstimatesWhileRevenue exceeds market forecasts 88% of the time。
Analysts from Seeking AlphaMultiplo InvestBelieves that against the backdrop of increased pressure from competitors such as MercadoLibre and TikTok Shop,Performance of e-commerce business ShopeeWill be key to third-quarter results.
This Analyst Expects Shopee's Revenue Despite Tough CompetitionUp 27% year-on-year to $3.9 billion； Platform'sGross merchandise volume (GMV) is expected to be $30.5 billion，Adjusted EBITDA of ~ $265 million。
As for the game businessGarena, analysts believe its profit margins will decline and growth will tend to be moderate. Garena's Revenue EstimatesUp 20% year-on-year to $850 millionButEBITDA Margin Could Fall to 48%。
The analyst noted: "I think the company still faces risks on this part of the business, which isOverdependence Free Fire。 Although the launch of new games like Naruto has spread the risk to some extent, the overall user base is expected to stabilize,ARPU (Average Revenue Per User) Could Slide on Lower Portfolio Attractiveness。”
Analysts' Opinion on the Company's Financial Services DivisionMonee (that is, SeaMoney)The most optimistic. Its revenue is expected to beA year-on-year increase of 60% to US $950 million，EBITDA margin close to 28.5%。 They pointed out that the company was approved after the second quarter, includingBrazil, Malaysia and IndonesiaCredit business in new markets including China, which is the main driver of the growth of this segment.
In the past three months, the market has been interested in SeaEPS estimates have had 2 upward revisions and 5 downward revisions, but forRevenue forecasts have been revised up 9 times and none have been revised down。 As of now, Sea's stock price is within 2025The cumulative increase is about 43%，Clearly outperform the market。
After SEA entered a period of rapid performance growth, the last three financial report seasons have shown a trend of the stock price rising first after the financial report and falling before the next financial report. At present, SEA has dropped by 20% ~ 25% from its high point, and the short sellers were strong in the previous month. Before the financial report, the long-short game was fierce, with an implied IV of 11.2%. The price of at-the-money options was high, and the risk of being a buyer was greater. Being an option seller can capture the profit of IV time value decay. The bull market put spread strategy is recommended.
Bull Put Spread
1. Strategy structure
Investors build a Bull Put Spread portfolio:
InvestorSell a Put option with a higher strike price (Put), the strike price isK ₂ = 145, premium revenue$3.80；
At the same time,Buy a Put option with a lower strike price (Put), the strike price isK ₁ = 140, premium expenditure$2.27。
Both options have the same expiration date. The core idea of this strategy is that investors don't expect the underlying stock price to fall sharply and remain above $145 at expiration. Collect premium by selling put options with high strike prices and limit potential losses by buying put options with low strike prices. This is a typical "Bullish and limited risk"Strategic structure.
Initial net income
Investors sell 145 Put and earn $3.80 while buying 140 Put and pay $2.27, so the initial net income is:
Net premium income = 3.80 − 2. 27 =$1.53/Share。
Each contract represents 100 shares, and investors receive a total ofNet income of $153。 This net premium is what the strategy can achieve under ideal circumstances, i.e., when the stock price remains highMaximum profit。
3. Maximum profit
When Sea's share price is at maturityUp to $145At that time, both put options will expire and become invalid, and investors do not need to perform the contract or pay any further fees.
At this time, investors retain all premium income, and the obtainedThe maximum profit is $1.53/share, namely$153/contract。
4. Maximum loss
If Sea's stock price at maturityFalling to $140 or below, then both options are exercised.
The 145 Put sold by the investor will be executed and the stock must be bought at a price of $145; At the same time, the 140 Put bought by investors can sell the stock at a price of $140, with a price difference of $5.
Therefore, the maximum loss is the strike spread less the initial net income:
Maximum loss = (145 − 140) − 1.53 =$3.47/Share, namely$347/contract。
5. Break-even point
The breakeven point comes at the point where Sea's stock price just makes the loss equal to the initial premium revenue.
The calculation formula is:
Breakeven = High Strike Price Put − Net Income = 145 − 1.53 =$143.47。
That is, when the stock price closes at$143.47When investors are neither profiting nor losing money. Above this price, investors profit; Below that, investors lose money.
6. Risk and return characteristics
The risks and benefits of this strategy are limited. Investor'sMaximum benefitIs $153/contract, which is the initial net premium income;Maximum lossIs $347/contract, derived from the strike spread minus the premium received.
The profit-loss ratio is about 1: 2.27, meaning that investors take on certain downside risks in exchange for stable premium gains.
Investors can profit when the stock price maintains above $143.47; If the stock price falls below $140 before expiration, the maximum loss will be reached.
7. Strategy application situations
Investors usuallyModerately bullish or volatileThe bull put spread strategy is adopted in the market. This group is suitable for the scenario where investors believe that Sea's share price will not fall significantly and may remain above $145. Since risks are limited and returns mainly come from premium, this strategy is particularly suitable after volatility is high and when the market stabilizesSuitable.
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