Here’s the facts.
Sea has three business segments, focused heavily in the SEA region and Brazil. Those three are Garena (gaming), Shopee (e-commerce) and Sea Money (payments)
Garena is a very profitable segement producing almost 3B in ADJUSTED EBDITA. While the other 2 are very un profitable but growing extremely fast, as in triple digit growth. Yet the company still manages to stay cash flow positive the past 2 years.
The gross profit margins for the business are very high 40%. So as the revenues scales up profits should come fairly easily. The company currently is valued around 60B which is extremely cheap and fair for Garena alone. But Shopee has proven to be a huge success and is clearly worth investing profits into. And Sea Money is just exploding. This is like buying a Activision/Amazon/PayPal hybrid that is located in economies that are growing the fastest in the world.
A stock that has been derisked so much that it’s worth looking into. At the 100s SEA is a very good pickup in my opinion. I just can’t believe how much negative sentiment is surrounded by this stock. Take advantage and sell Puts to the bears while the premium is still there!!!
source: yahoo
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