SaravananR personal page - To The Moon

SaravananR

SaravananR

No personal profile

0Follow

0Followers

0Topic

0Badge

2023-03-24

Great to see

Sea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength

2023-09-01

wrong judgement .. Shopee is bigger than lazada in terms of customer volume or revenue

Sea Limited: Decline In Market Share Likely To Hurt The Stock

2023-08-23

Let's watch it

Is Sea Limited's Recent Slump Warranted?

2023-09-20

Nice

Sea Limited: Easy To Sea

2022-09-18

Ok

Can the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know

2022-08-18

Good

Sea Limited: Riding This Wave Through Recent Volatility

2023-03-09

Good 👍🏻

Sea Limited Just Pulled Off a Minor Miracle: Time to Buy?

2023-03-08

👍🏻💐

Sea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce

2022-08-30

Ok

Apple, Alphabet, and Other Big Tech Stocks Extend Losses

2023-02-19

Good.. ageed on this

Sea Limited: Best Contrarian Opportunity For The E-Commerce Leader

2022-11-19

Super

Sea Limited: Profitability May Be Around The Corner

2022-11-16

2022-09-06

Ok

6 Reasons to Buy Apple Stock Now and Never Sell

2022-08-21

Ok

No, There Is No New Short-Selling Champion in Tesla Stock

2023-12-28

Good article to knew fact abt sea.

Sea Limited: No Love

Go to Tiger App to see more news

{"i18n":{"language":"en_US"},"userPageInfo":{"id":"4121169336733782","uuid":"4121169336733782","gmtCreate":1658066254170,"gmtModify":1660626790508,"name":"SaravananR","pinyin":"saravananr","introduction":"","introductionEn":"","signature":"","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","hat":null,"hatId":null,"hatName":null,"vip":1,"status":2,"fanSize":0,"headSize":0,"tweetSize":15,"questionSize":0,"limitLevel":999,"accountStatus":4,"level":{"id":1,"name":"萌萌虎","nameTw":"萌萌虎","represent":"呱呱坠地","factor":"评论帖子3次或发布1条主帖（非转发）","iconColor":"3C9E83","bgColor":"A2F1D9"},"themeCounts":0,"badgeCounts":0,"badges":[],"moderator":false,"superModerator":false,"manageSymbols":null,"badgeLevel":null,"boolIsFan":false,"boolIsHead":false,"favoriteSize":0,"symbols":null,"coverImage":null,"realNameVerified":"init","userBadges":[{"badgeId":"1026c425416b44e0aac28c11a0848493-1","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Debut Tiger","description":"Join the tiger community for 500 days","bigImgUrl":"https://static.tigerbbs.com/0e4d0ca1da0456dc7894c946d44bf9ab","smallImgUrl":"https://static.tigerbbs.com/0f2f65e8ce4cfaae8db2bea9b127f58b","grayImgUrl":"https://static.tigerbbs.com/c5948a31b6edf154422335b265235809","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.11.30","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1001},{"badgeId":"a83d7582f45846ffbccbce770ce65d84-1","templateUuid":"a83d7582f45846ffbccbce770ce65d84","name":"Real Trader","description":"Completed a transaction","bigImgUrl":"https://static.tigerbbs.com/2e08a1cc2087a1de93402c2c290fa65b","smallImgUrl":"https://static.tigerbbs.com/4504a6397ce1137932d56e5f4ce27166","grayImgUrl":"https://static.tigerbbs.com/4b22c79415b4cd6e3d8ebc4a0fa32604","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.08.17","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1100}],"userBadgeCount":2,"currentWearingBadge":null,"individualDisplayBadges":null,"crmLevel":2,"crmLevelSwitch":0,"location":null,"starInvestorFollowerNum":0,"starInvestorFlag":false,"starInvestorOrderShareNum":0,"subscribeStarInvestorNum":0,"ror":null,"winRationPercentage":null,"showRor":false,"investmentPhilosophy":null,"starInvestorSubscribeFlag":false},"baikeInfo":{},"tab":"hot","tweets":[{"id":256830444933192,"gmtCreate":1703736640748,"gmtModify":1703736645416,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good article to knew fact abt sea.&nbsp;","listText":"Good article to knew fact abt sea.&nbsp;","text":"Good article to knew fact abt sea.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/256830444933192","repostId":"2394756303","repostType":2,"repost":{"id":"2394756303","pubTimestamp":1703730676,"share":"https://ttm.financial/m/news/2394756303?lang=&edition=fundamental","pubTime":"2023-12-28 10:31","market":"us","language":"en","title":"Sea Limited: No Love","url":"https://stock-news.laohu8.com/highlight/detail?id=2394756303","media":"Seekingalpha","summary":"Saranya Yuenyong Introduction Sea Limited  is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:   Garena - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.   Shopee - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.  SeaMoney - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.  The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe. The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations. Investors loved it at $300. Shouldn't they love it even more at $40?","content":"<html><head></head><body><ul style=\"\"><li><p>Sea&#39;s growth story is far from over.</p></li><li><p>Profitability turned negative in Q3 - this was intentional.</p></li><li><p>Analyst estimates are too low.</p></li><li><p>Sea is trading at its cheapest valuation multiple ever.</p></li><li><p>Investors loved it at $300. Shouldn&#39;t they love it even more at $40?</p></li></ul><h2 id=\"id_1939370528\">Introduction</h2><p>Sea Limited (NYSE: SE) is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:</p><ul style=\"\"><li><p><strong>Garena</strong> - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.</p></li><li><p><strong>Shopee</strong> - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.</p></li><li><p><strong>SeaMoney</strong> - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.</p></li></ul><p>The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe.</p><p>The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations.</p><p>Investors loved it at $300. Shouldn&#39;t they love it even more at $40?</p><p>Well, that&#39;s not the case as the stock continues to struggle while the broader markets rally off to new highs.</p><p>That said, following its spectacular decline of about 90%, I make the investment case that it pays to be a contrarian today - I believe the risk to reward for Sea stock is heavily skewed to the upside.</p><h2 id=\"id_1808184048\">Growth</h2><p>Looking at its topline, Q3 Total Revenue was $3.3B, up by a mere 5% YoY. While this beat analyst estimates by $90M, or 3%, Sea&#39;s growth has gone through a significant slowdown over the last few quarters, from its glory days of triple-digit growth in 2020 and 2021, to just mid-single-digit growth as of recently.</p><p>Years of growth have been pulled forward due to the pandemic, which consequently led to the company facing very tough YoY comps in the last couple of years, thus the steep deceleration in growth.</p><p>Now you see why shares of Sea are down so much.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cfc929851b99b47a929aa65fc26b9699\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p></p><p>Let&#39;s take a look at the performance of each of Sea&#39;s business units.</p><p>Looking at the gaming division first, Q3 Digital Entertainment Revenue was $592M. While this is up 12% QoQ, it is down 34% YoY and still far from its highs of $1.4B in Q4 of 2021. Nevertheless, it is still encouraging to see some signs of recovery in the business.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b1288059e0de5b58109f034be1518db6\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>The drop in Revenue was due to the moderation in user engagement, lower monetization, as well as the Free Fire ban in India starting in early 2022.</p><ul style=\"\"><li><p>Q3 <strong>Bookings</strong> were down 33% YoY to $448M.</p></li><li><p>As you can see below, Q3 <strong>Quarterly Active Users</strong> were down 4% YoY and flat QoQ at 544M, due to global economies reopening.</p></li><li><p>More importantly, Q3 <strong>Quarterly Paying Users</strong> were down even more, decreasing by 21% YoY to 41M.</p></li><li><p>As a result, the <strong>Paying User Ratio</strong> dropped to new lows of just 7.4%, reflecting lower monetization rates within Garena.</p></li></ul><p>As it relates to the Digital Entertainment business, QPUs is the most important metric to track. We saw a decent recovery in the metric in Q2 but it dipped again in Q3. On a positive note, QPUs remains higher than Q1&#39;s low of 38M - hopefully, that is indeed the low and that Garena continues to add more QPUs in the following quarters. That way, Garena can return to growth mode, after nearly two years of decline.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/09f1c182706366ef611d329c32831ec4\" title=\"\" tg-width=\"557\" tg-height=\"373\"/></p><p>Author&#39;s Analysis</p><p>Turning to Shopee, Q3 E-Commerce Revenue grew 16% YoY to $2.2B, an all-time high for the company. This includes:</p><ul style=\"\"><li><p><strong>Core Marketplace Revenue</strong> of $1.3B, up 32% YoY.</p></li><li><p><strong>Value-added Services Revenue</strong> of $0.6B, down 4% YoY.</p></li></ul><p>Similar to Garena, Shopee&#39;s growth has also slowed down materially, although it stayed positive, unlike the gaming division.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/634c1fc9a4521ef2155897ccbc198d3e\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>Growth was bolstered by a 5% YoY increase in GMV to $20.1B and a 13% YoY increase in Gross Orders to 2.2B.</p><p>As you may have noticed, E-Commerce Revenue grew faster than GMV, primarily due to Shopee&#39;s improved Take Rate - or Revenue divided GMV - which reflects Shopee&#39;s increasing ability to monetize its platform.</p><p>As you can see, Q3 Take Rate was about 11.1%, which is about 100 basis points higher YoY. However, that figure is not as high as Q4&#39;s 11.7%, which could possibly mean lower fees for sellers and/or higher discounts for buyers, in an attempt to stimulate stronger growth.</p><p>(Note: Take Rates in Q1 and Q2 are left blank as Sea did not disclose GMV figures in both periods).</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/78a498f36f8fad2cd014278083ec2472\" title=\"\" tg-width=\"640\" tg-height=\"266\"/></p><p>Author&#39;s Analysis</p><p>Regardless, management is seeing strong engagement within the Shopee platform, particularly with Shopee Live as the company pushes into e-commerce live streaming. For instance:</p><ul style=\"\"><li><p>In Indonesia, 20% of daily active users watched live streaming in October. At the same time, the number of average daily streamers, hours streamed, and daily stream sessions all grew by more than three times in October, as compared to June.</p></li><li><p>In Southeast Asia, orders on live streaming already accounted for more than 10% of total order volume in October.</p></li></ul><p>With that in mind, Shopee Live should continue to be a key growth driver for Shopee as the company invests in more collaborations with content creators and live-streaming sellers.</p><p>Moving on, SeaMoney continues to grow faster than the overall company. In Q3, Digital Financial Services Revenue grew by 37% YoY to $446M, a record high for the company. This was mainly due to its growing credit business, with its total credit portfolio expanding by 5% QoQ to $2.9B.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4e05834ebb0e75255e2d4729fc067873\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>All in all, Shopee and SeaMoney continue to grow rapidly, although not as fast as they did a couple of years ago, and this is reasonable given the larger size of each of these businesses.</p><p>On the other hand, Garena is the clear laggard, dragging the entire business down to subpar growth. Because of Garena, the growth profile of Sea does not look impressive at all.</p><p>As the saying goes, <em>one bad apple spoils the bunch</em>.</p><p>Consequently, the growth slowdown gave investors a major shock. And disappointingly, they are quick to conclude that Sea&#39;s growth story is over.</p><p>Rest assured, I believe Sea could return to strong growth mode in the next few quarters due to relatively easier YoY comps in 2024, the relaunch of Free Fire in India, as well as continued momentum with SeaMoney.</p><h2 id=\"id_3016355670\">Profitability</h2><p>While growth has been lackluster, profitability is on the right trajectory.</p><p>In Q3, Gross Profit was $1.4B, up by 17% YoY, despite Revenue growing by only 5% YoY. As a result, Gross Margin expanded from 39% last year to 44% in Q3, primarily due to increased monetization and greater cost efficiencies in Shopee and SeaMoney.</p><p>Although Gross Margin has trended down over the last few quarters, the long-term trend is still up, and that demonstrates economies of scale within the business.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a5c0dec321168ceb31ac30400a615d77\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>Moving down the income statement, Q3 Operating Profit was $(128)M, which is a (4)% Margin. As you can see, Operating Margin flipped to negative again after three consecutive quarters of operating profitability.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d8bac52c39ba3ab3eb0afcf45608f767\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>Sea has been focusing on optimizing operating expenses and achieving higher cost efficiencies throughout most of 2022 and the first half of 2023. However, it seems that Sea is finally ramping up spending once again.</p><p>It looks like all the cost savings from other areas of the business were used for Sales and Marketing Expenses, which increased 12% YoY, or 86% QoQ, to $918M. Not surprisingly, over 90% of it was allocated to Shopee, which saw Sales and Marketing Expenses rising by 50% YoY to $862M.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dd9ad0557939b67866c7c0c0a43f5b80\" title=\"\" tg-width=\"640\" tg-height=\"358\"/></p><p>Sea Limited FY2023 Q3 Earnings Presentation</p><p>If we look at Operating Profit by segment, we can see that the E-Commerce segment turned unprofitable once again, burning $(428)M in Q3, representing an Operating Margin of (19)%. Despite the huge swing to the downside, the losses from the E-Commerce segment are covered by the other two higher-margin segments, which saw Operating Margins improving YoY and QoQ.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1e6ab8a3cad931c5fa129a7cdc846e54\" title=\"\" tg-width=\"640\" tg-height=\"367\"/></p><p>Author&#39;s Analysis</p><p>It&#39;s safe to assume that with improved profitability in Garena and SeaMoney, management is turning more aggressive in terms of capturing market share and growing GMV for Shopee.</p><p>A few years ago, this strategy would not have been sustainable. But today, Sea is self-sufficient enough to exploit Shopee&#39;s growth potential.</p><p>What&#39;s more, Shopee in Brazil is inching closer to profitability, with Contribution Margin Loss Per Order improving 91% YoY to $0.10 in Q3. Eventually, this should put less burden on Shopee&#39;s operating profitability.</p><p>In addition, SeaMoney should also enjoy better unit economics over time as the segment scales - 40%+ Operating Margin looks possible given the momentum.</p><p>In Q3, Net Income was $(144)M, which is a (4)% Margin. Net Margin turned negative in Q3, again, due to elevated marketing spend. I expect this to continue as Q4 marks the holiday season, so don&#39;t be surprised if Net Margins remain negative.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/74ee34e2a22d4978897e9cee77c98a7c\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>That said, Sea should return to GAAP Net Income profitability as the company scales further - I expect this to happen sooner rather than later.</p><p>Previously, Sea operated a growth-at-all-costs strategy, stacking loss after loss in pursuit of upsized growth. However, Sea has pivoted to one that balances growth and profitability, which led to margin expansion.</p><p>Be that as it may, the profitability narrative turned negative in Q3.</p><p>Fortunately, this was intentional - after some time of disciplined cost controls, management is now focusing on increasing market share and strengthening market leadership.</p><p>Sea, being in a fundamentally stronger position, is now ready to ramp up spending to stimulate growth.</p><p>The question remains as to whether Sea can sustain growth and improve profitability in the long run - not just for a few quarters. That is the ultimate test of a truly scalable business model.</p><h2 id=\"id_621106681\">Health</h2><p>Turning to the balance sheet, Sea has $6.0B of Cash and Short-term Investments with $4.6B of Total Debt, placing its Net Cash position at $1.4B.</p><p>As you can see, Net Cash has fallen substantially over the past two years as Sea has pretty much stopped raising capital in the equity and debt markets -as mentioned earlier, the company aims to be self-sufficient and not rely on external funding.</p><p>That said, we should see Net Cash build up over time as management focuses on profitable growth.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b24d6a235d3a320e6fa8a5404667d144\" title=\"\" tg-width=\"640\" tg-height=\"269\"/></p><p>Author&#39;s Analysis</p><p>In terms of cash generation, Sea had an Operating Cash Flow of about $600M in Q3, which represents an OCF Margin of 18%. In the first nine months, OCF improved from $(1.4)B to $1.8B, which is remarkable given that the cost-cutting initiatives started only a year ago. This goes to show that Sea is capable of managing its capital efficiently.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/12dc4cef484fde4a924f1df503a598c8\" title=\"\" tg-width=\"640\" tg-height=\"258\"/></p><p>Author&#39;s Analysis</p><p>With positive cash flow generation in place, Sea is in a good financial position to reinvest and reaccelerate growth, which is what the company aims to do moving forward.</p><blockquote><p>In this current period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership. We now have scale, a deep understanding of our markets, and strong localized execution across diverse geographies. This gives us a wide competitive moat, and we intend to grow it further. 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.</p><p>(Sea Limited FY2023 Q3 Results)</p></blockquote><h2 id=\"id_2318822457\">Outlook</h2><p>Management did not give any guidance. I think part of the reason why the stock sold off so much is that management failed to give guidance, which is just another way of saying: 1) &#34;We don&#39;t have good visibility in our current operating environment&#34; or 2) &#34;Our forecast is so bad that we&#39;re better off not giving guidance&#34;.</p><p>Whatever it is, I would love to see better communication from management moving forward, and hopefully, they&#39;ll do that in their Q4 earnings release. This should boost investor confidence.</p><p>That said, analysts expect Q4 Revenue of $3.5B, which is only a 2% growth YoY. This also means that they expect Revenue to decelerate from Q3&#39;s growth of 5%.</p><p>During the earnings call, management made it clear that they &#34;will continue to invest in the holiday shopping season, which we believe is a good time to acquire users, gain market share, and strengthen our content ecosystem&#34;.</p><p>In other words, we should continue to see elevated marketing spend and this should lead to higher-than-expected Revenue growth in Q4.</p><p>Regardless, Sea should enter 2024 with relatively easier comps, which is why analysts expect growth to reaccelerate to 12%, on top of 2023&#39;s growth of just 5%.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/82661198a4da56a9a8294864885230a4\" title=\"\" tg-width=\"640\" tg-height=\"164\"/></p><p>Seeking Alpha</p><p>In other news, Shopee remains the third most downloaded shopping app worldwide, which should support growth in future quarters.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4dafdb9ed185505ded1cef13e474b5e1\" title=\"\" tg-width=\"509\" tg-height=\"318\"/></p><p>Data.ai</p><p>More excitingly, two of Garena&#39;s mobile games - Black Clover M and Free Fire - are the top three most downloaded games worldwide in the last 30 days. Including the relaunch of Free Fire in India, these should drive sequential growth for Sea&#39;s Digital Entertainment segment.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b54f87bfd7e11f6628a90b7589103cfe\" title=\"\" tg-width=\"509\" tg-height=\"318\"/></p><p>Data.ai</p><p>With this in mind, I believe Q4 analyst estimates are too low. I believe Sea&#39;s market leadership, Shopee&#39;s return to growth spending, and Garena&#39;s rebound, should all drive better-than-expected growth numbers in Q4, which should set the stock up for a strong 2024.</p><h2 id=\"id_2369160259\">Valuation</h2><p>From a historical standpoint, Sea is trading at its cheapest valuation ever.</p><p>As you can see, Sea is trading at just 1.5x EV to Revenue, far below its peak of 31.8x. A return to its 5-year average multiple of 11.1x would result in a 700%+ appreciation in share price.</p><p>Sure, the lower multiple is justified given the company&#39;s slowing growth rate. However, Sea is now a much larger, more profitable, and competitively stronger company than it was two years ago.</p><p>It&#39;s funny how the same investors who were happy to buy the stock back when it traded at $300+ with a Revenue multiple of more than 30x, are now quick to dismiss the stock despite trading at a 90% discount to its all-time highs.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e0cc4bbc346c149e67b9766bfc6c169d\" title=\"\" tg-width=\"635\" tg-height=\"435\"/></p><p>Data by YCharts</p><p>My DCF model also shows how undervalued the stock is. Below, you can see my key assumptions:</p><p>Author&#39;s Analysis</p><p>For Revenue growth, I followed analyst estimates for the first three years and slowly dropped growth rates over time. By 2032, I expect $30.8B in revenue for Sea.</p><p>I also expect Sea to achieve economies of scale through the years, thus leading to margin expansion. By 2032, I expect a stable Free Cash Flow Margin profile of just 17.5%. As a reference, <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> (MELI), which has a very similar business model to Sea, has an FCF Margin of 23.6% in 2022, so my long-term FCF Margin for Sea is actually very conservative.</p><p>Author&#39;s Analysis</p><p>Using a discount rate of 10% and a perpetual growth rate of 2.5%, I arrive at an intrinsic value per share of ~$83 for Sea stock, which is more than double the current price of $39. It is also much higher than the average analyst price target of $56.</p><p>Below, I&#39;ve also included my bear and bull cases.</p><p>As you can see, even assuming a lower FCF Margin and perpetual growth rate, Sea still trades at a considerable discount.</p><p>Author&#39;s Analysis</p><p>In short, I believe Sea stock is significantly undervalued.</p><p>But I guess a lot of investors think otherwise, as we&#39;ve seen with the continual decline in the share price.</p><p>Let me remind you. Sea has:</p><ol start=\"1\" style=\"\"><li><p>Some of the most valuable and successful mobile game assets in the world.</p></li><li><p>The most dominant e-commerce platform in Southeast Asia (and possibly Brazil soon).</p></li><li><p>A fast-growing fintech giant in the making.</p></li></ol><p>Now, at $40 a share, Sea stock seems to be left dead in the water with sentiment at an all-time low - it pays to be a contrarian today.</p><p>In my eyes, Sea is trading at deep value territory and any slight positive catalyst could launch the stock price higher with relative ease.</p><h2 id=\"id_2539944736\">Risks</h2><p>Competition is the biggest bear argument against Sea. Many investors fear the company is losing market share to competition, thus slowing Sea&#39;s growth. This includes names such as Lazada (BABA), Tokopedia, and Mercado Libre.</p><p>Most recently, TikTok joined forces with Indonesia&#39;s GoTo, which owns Gojek and Tokopedia. The social media company invested over $1.5B in GoTo, including $840M to acquire a 75% stake in Tokopedia.</p><p>The deal enabled TikTok to resume its shopping app service in Indonesia, following Indonesia&#39;s ban on e-commerce transactions directly on social media platforms.</p><p>Under the agreement, TikTok Shop will be combined with Tokopedia, essentially allowing TikTok to bypass the ban by redirecting shoppers to Tokopedia, where they will complete their purchases.</p><p>This was a huge development as there are a lot of synergies:</p><ul style=\"\"><li><p><strong>TikTok</strong> - the biggest social media platform in Indonesia.</p></li><li><p><strong>Tokopedia</strong> - an e-commerce powerhouse in Indonesia.</p></li><li><p><strong>Gojek</strong> - has an extensive logistics network and the most popular mobile wallet in Indonesia, GoPay.</p></li></ul><p>It made sense why shares of Sea plummeted following this news.</p><p>But one part of the deal really got my attention: TikTok acquiring 75% of Tokopedia for $840M.</p><p>That implies a valuation of about $1.1B.</p><p>Just three years ago, Google (GOOG) invested in Tokopedia at a valuation of $7.5B.</p><p>To see that big of a valuation drop and to see GoTo selling Indonesia&#39;s jewel to a foreign company at less than $1B, seems fishy to me. GoTo might be in a bad financial position to pull off that kind of move.</p><p>And this could actually be bullish for Sea.</p><p>In addition, if the deal doesn&#39;t fall through (expected to close in Q1 of 2024), Sea could enjoy market share gains which should be a major catalyst for the stock.</p><p>If it does go through, Sea stock may be pressured for some time as sentiment turns sour again.</p><h2 id=\"id_4049296853\">Thesis</h2><p>Sea is at an inflection point.</p><p>More specifically, the company is gearing up for profitable growth as it abandons the grow-at-all-costs mentality.</p><p>While growth has been lackluster lately, Sea still has a long growth runway due to secular trends in the mobile gaming, e-commerce, and fintech industries.</p><p>That is why management is sacrificing short-term profitability for long-term market share gains and leadership, which should generate strong returns for shareholders in the long run.</p><p>Investors loved it at $300, back when the stock was trading at nonsensical valuations.</p><p>Today, investors can pick up shares of Sea at a 90% discount, despite being a fundamentally stronger company overall. What&#39;s more, growth is set to reaccelerate in 2024 and analysts have set a low bar on Sea as well.</p><p>Yet, it receives no love.</p><p>I think that&#39;s just irrational market behavior - in this kind of situation, it pays to be a contrarian.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: No Love</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: No Love\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-12-28 10:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4659992-sea-limited-no-love><strong>Seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sea's growth story is far from over.Profitability turned negative in Q3 - this was intentional.Analyst estimates are too low.Sea is trading at its cheapest valuation multiple ever.Investors loved it ...</p>\n\n<a href=\"https://seekingalpha.com/article/4659992-sea-limited-no-love\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1048596156.SGD":"Blackrock Asian Growth Leaders A2 SGD-H","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0821914370.USD":"贝莱德亚洲成长领袖A2","BK4554":"元宇宙及AR概念","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","LU0048573645.USD":"富达东盟基金","BK4592":"伊斯兰概念","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0354030438.USD":"富国美国大盘成长基金Cl A Acc","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","BK4587":"ChatGPT概念","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","BK4588":"碎股","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU0965509101.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"A\" (SGDHDG) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","SG9999002620.SGD":"LionGlobal South East Asia SGD","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","BK4579":"人工智能","LU0072462426.USD":"贝莱德全球配置 A2","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0823411888.USD":"法巴消费创新基金 Cap","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0210535034.USD":"摩根大通拉丁美洲基金","LU0050427557.USD":"富达拉丁美洲基金","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","BK4220":"综合零售","SE":"Sea Ltd","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","BK4581":"高盛持仓","LU2279701549.SGD":"JPMorgan Funds - Emerging Markets Sustainable Equity A (acc) SGD","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0067412154.USD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (USD) ACC","BK4548":"巴美列捷福持仓"},"source_url":"https://seekingalpha.com/article/4659992-sea-limited-no-love","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2394756303","content_text":"Sea's growth story is far from over.Profitability turned negative in Q3 - this was intentional.Analyst estimates are too low.Sea is trading at its cheapest valuation multiple ever.Investors loved it at $300. Shouldn't they love it even more at $40?IntroductionSea Limited (NYSE: SE) is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:Garena - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.Shopee - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.SeaMoney - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe.The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations.Investors loved it at $300. Shouldn't they love it even more at $40?Well, that's not the case as the stock continues to struggle while the broader markets rally off to new highs.That said, following its spectacular decline of about 90%, I make the investment case that it pays to be a contrarian today - I believe the risk to reward for Sea stock is heavily skewed to the upside.GrowthLooking at its topline, Q3 Total Revenue was $3.3B, up by a mere 5% YoY. While this beat analyst estimates by $90M, or 3%, Sea's growth has gone through a significant slowdown over the last few quarters, from its glory days of triple-digit growth in 2020 and 2021, to just mid-single-digit growth as of recently.Years of growth have been pulled forward due to the pandemic, which consequently led to the company facing very tough YoY comps in the last couple of years, thus the steep deceleration in growth.Now you see why shares of Sea are down so much.Author's AnalysisLet's take a look at the performance of each of Sea's business units.Looking at the gaming division first, Q3 Digital Entertainment Revenue was $592M. While this is up 12% QoQ, it is down 34% YoY and still far from its highs of $1.4B in Q4 of 2021. Nevertheless, it is still encouraging to see some signs of recovery in the business.Author's AnalysisThe drop in Revenue was due to the moderation in user engagement, lower monetization, as well as the Free Fire ban in India starting in early 2022.Q3 Bookings were down 33% YoY to $448M.As you can see below, Q3 Quarterly Active Users were down 4% YoY and flat QoQ at 544M, due to global economies reopening.More importantly, Q3 Quarterly Paying Users were down even more, decreasing by 21% YoY to 41M.As a result, the Paying User Ratio dropped to new lows of just 7.4%, reflecting lower monetization rates within Garena.As it relates to the Digital Entertainment business, QPUs is the most important metric to track. We saw a decent recovery in the metric in Q2 but it dipped again in Q3. On a positive note, QPUs remains higher than Q1's low of 38M - hopefully, that is indeed the low and that Garena continues to add more QPUs in the following quarters. That way, Garena can return to growth mode, after nearly two years of decline.Author's AnalysisTurning to Shopee, Q3 E-Commerce Revenue grew 16% YoY to $2.2B, an all-time high for the company. This includes:Core Marketplace Revenue of $1.3B, up 32% YoY.Value-added Services Revenue of $0.6B, down 4% YoY.Similar to Garena, Shopee's growth has also slowed down materially, although it stayed positive, unlike the gaming division.Author's AnalysisGrowth was bolstered by a 5% YoY increase in GMV to $20.1B and a 13% YoY increase in Gross Orders to 2.2B.As you may have noticed, E-Commerce Revenue grew faster than GMV, primarily due to Shopee's improved Take Rate - or Revenue divided GMV - which reflects Shopee's increasing ability to monetize its platform.As you can see, Q3 Take Rate was about 11.1%, which is about 100 basis points higher YoY. However, that figure is not as high as Q4's 11.7%, which could possibly mean lower fees for sellers and/or higher discounts for buyers, in an attempt to stimulate stronger growth.(Note: Take Rates in Q1 and Q2 are left blank as Sea did not disclose GMV figures in both periods).Author's AnalysisRegardless, management is seeing strong engagement within the Shopee platform, particularly with Shopee Live as the company pushes into e-commerce live streaming. For instance:In Indonesia, 20% of daily active users watched live streaming in October. At the same time, the number of average daily streamers, hours streamed, and daily stream sessions all grew by more than three times in October, as compared to June.In Southeast Asia, orders on live streaming already accounted for more than 10% of total order volume in October.With that in mind, Shopee Live should continue to be a key growth driver for Shopee as the company invests in more collaborations with content creators and live-streaming sellers.Moving on, SeaMoney continues to grow faster than the overall company. In Q3, Digital Financial Services Revenue grew by 37% YoY to $446M, a record high for the company. This was mainly due to its growing credit business, with its total credit portfolio expanding by 5% QoQ to $2.9B.Author's AnalysisAll in all, Shopee and SeaMoney continue to grow rapidly, although not as fast as they did a couple of years ago, and this is reasonable given the larger size of each of these businesses.On the other hand, Garena is the clear laggard, dragging the entire business down to subpar growth. Because of Garena, the growth profile of Sea does not look impressive at all.As the saying goes, one bad apple spoils the bunch.Consequently, the growth slowdown gave investors a major shock. And disappointingly, they are quick to conclude that Sea's growth story is over.Rest assured, I believe Sea could return to strong growth mode in the next few quarters due to relatively easier YoY comps in 2024, the relaunch of Free Fire in India, as well as continued momentum with SeaMoney.ProfitabilityWhile growth has been lackluster, profitability is on the right trajectory.In Q3, Gross Profit was $1.4B, up by 17% YoY, despite Revenue growing by only 5% YoY. As a result, Gross Margin expanded from 39% last year to 44% in Q3, primarily due to increased monetization and greater cost efficiencies in Shopee and SeaMoney.Although Gross Margin has trended down over the last few quarters, the long-term trend is still up, and that demonstrates economies of scale within the business.Author's AnalysisMoving down the income statement, Q3 Operating Profit was $(128)M, which is a (4)% Margin. As you can see, Operating Margin flipped to negative again after three consecutive quarters of operating profitability.Author's AnalysisSea has been focusing on optimizing operating expenses and achieving higher cost efficiencies throughout most of 2022 and the first half of 2023. However, it seems that Sea is finally ramping up spending once again.It looks like all the cost savings from other areas of the business were used for Sales and Marketing Expenses, which increased 12% YoY, or 86% QoQ, to $918M. Not surprisingly, over 90% of it was allocated to Shopee, which saw Sales and Marketing Expenses rising by 50% YoY to $862M.Sea Limited FY2023 Q3 Earnings PresentationIf we look at Operating Profit by segment, we can see that the E-Commerce segment turned unprofitable once again, burning $(428)M in Q3, representing an Operating Margin of (19)%. Despite the huge swing to the downside, the losses from the E-Commerce segment are covered by the other two higher-margin segments, which saw Operating Margins improving YoY and QoQ.Author's AnalysisIt's safe to assume that with improved profitability in Garena and SeaMoney, management is turning more aggressive in terms of capturing market share and growing GMV for Shopee.A few years ago, this strategy would not have been sustainable. But today, Sea is self-sufficient enough to exploit Shopee's growth potential.What's more, Shopee in Brazil is inching closer to profitability, with Contribution Margin Loss Per Order improving 91% YoY to $0.10 in Q3. Eventually, this should put less burden on Shopee's operating profitability.In addition, SeaMoney should also enjoy better unit economics over time as the segment scales - 40%+ Operating Margin looks possible given the momentum.In Q3, Net Income was $(144)M, which is a (4)% Margin. Net Margin turned negative in Q3, again, due to elevated marketing spend. I expect this to continue as Q4 marks the holiday season, so don't be surprised if Net Margins remain negative.Author's AnalysisThat said, Sea should return to GAAP Net Income profitability as the company scales further - I expect this to happen sooner rather than later.Previously, Sea operated a growth-at-all-costs strategy, stacking loss after loss in pursuit of upsized growth. However, Sea has pivoted to one that balances growth and profitability, which led to margin expansion.Be that as it may, the profitability narrative turned negative in Q3.Fortunately, this was intentional - after some time of disciplined cost controls, management is now focusing on increasing market share and strengthening market leadership.Sea, being in a fundamentally stronger position, is now ready to ramp up spending to stimulate growth.The question remains as to whether Sea can sustain growth and improve profitability in the long run - not just for a few quarters. That is the ultimate test of a truly scalable business model.HealthTurning to the balance sheet, Sea has $6.0B of Cash and Short-term Investments with $4.6B of Total Debt, placing its Net Cash position at $1.4B.As you can see, Net Cash has fallen substantially over the past two years as Sea has pretty much stopped raising capital in the equity and debt markets -as mentioned earlier, the company aims to be self-sufficient and not rely on external funding.That said, we should see Net Cash build up over time as management focuses on profitable growth.Author's AnalysisIn terms of cash generation, Sea had an Operating Cash Flow of about $600M in Q3, which represents an OCF Margin of 18%. In the first nine months, OCF improved from $(1.4)B to $1.8B, which is remarkable given that the cost-cutting initiatives started only a year ago. This goes to show that Sea is capable of managing its capital efficiently.Author's AnalysisWith positive cash flow generation in place, Sea is in a good financial position to reinvest and reaccelerate growth, which is what the company aims to do moving forward.In this current period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership. We now have scale, a deep understanding of our markets, and strong localized execution across diverse geographies. This gives us a wide competitive moat, and we intend to grow it further. 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.(Sea Limited FY2023 Q3 Results)OutlookManagement did not give any guidance. I think part of the reason why the stock sold off so much is that management failed to give guidance, which is just another way of saying: 1) \"We don't have good visibility in our current operating environment\" or 2) \"Our forecast is so bad that we're better off not giving guidance\".Whatever it is, I would love to see better communication from management moving forward, and hopefully, they'll do that in their Q4 earnings release. This should boost investor confidence.That said, analysts expect Q4 Revenue of $3.5B, which is only a 2% growth YoY. This also means that they expect Revenue to decelerate from Q3's growth of 5%.During the earnings call, management made it clear that they \"will continue to invest in the holiday shopping season, which we believe is a good time to acquire users, gain market share, and strengthen our content ecosystem\".In other words, we should continue to see elevated marketing spend and this should lead to higher-than-expected Revenue growth in Q4.Regardless, Sea should enter 2024 with relatively easier comps, which is why analysts expect growth to reaccelerate to 12%, on top of 2023's growth of just 5%.Seeking AlphaIn other news, Shopee remains the third most downloaded shopping app worldwide, which should support growth in future quarters.Data.aiMore excitingly, two of Garena's mobile games - Black Clover M and Free Fire - are the top three most downloaded games worldwide in the last 30 days. Including the relaunch of Free Fire in India, these should drive sequential growth for Sea's Digital Entertainment segment.Data.aiWith this in mind, I believe Q4 analyst estimates are too low. I believe Sea's market leadership, Shopee's return to growth spending, and Garena's rebound, should all drive better-than-expected growth numbers in Q4, which should set the stock up for a strong 2024.ValuationFrom a historical standpoint, Sea is trading at its cheapest valuation ever.As you can see, Sea is trading at just 1.5x EV to Revenue, far below its peak of 31.8x. A return to its 5-year average multiple of 11.1x would result in a 700%+ appreciation in share price.Sure, the lower multiple is justified given the company's slowing growth rate. However, Sea is now a much larger, more profitable, and competitively stronger company than it was two years ago.It's funny how the same investors who were happy to buy the stock back when it traded at $300+ with a Revenue multiple of more than 30x, are now quick to dismiss the stock despite trading at a 90% discount to its all-time highs.Data by YChartsMy DCF model also shows how undervalued the stock is. Below, you can see my key assumptions:Author's AnalysisFor Revenue growth, I followed analyst estimates for the first three years and slowly dropped growth rates over time. By 2032, I expect $30.8B in revenue for Sea.I also expect Sea to achieve economies of scale through the years, thus leading to margin expansion. By 2032, I expect a stable Free Cash Flow Margin profile of just 17.5%. As a reference, MercadoLibre (MELI), which has a very similar business model to Sea, has an FCF Margin of 23.6% in 2022, so my long-term FCF Margin for Sea is actually very conservative.Author's AnalysisUsing a discount rate of 10% and a perpetual growth rate of 2.5%, I arrive at an intrinsic value per share of ~$83 for Sea stock, which is more than double the current price of $39. It is also much higher than the average analyst price target of $56.Below, I've also included my bear and bull cases.As you can see, even assuming a lower FCF Margin and perpetual growth rate, Sea still trades at a considerable discount.Author's AnalysisIn short, I believe Sea stock is significantly undervalued.But I guess a lot of investors think otherwise, as we've seen with the continual decline in the share price.Let me remind you. Sea has:Some of the most valuable and successful mobile game assets in the world.The most dominant e-commerce platform in Southeast Asia (and possibly Brazil soon).A fast-growing fintech giant in the making.Now, at $40 a share, Sea stock seems to be left dead in the water with sentiment at an all-time low - it pays to be a contrarian today.In my eyes, Sea is trading at deep value territory and any slight positive catalyst could launch the stock price higher with relative ease.RisksCompetition is the biggest bear argument against Sea. Many investors fear the company is losing market share to competition, thus slowing Sea's growth. This includes names such as Lazada (BABA), Tokopedia, and Mercado Libre.Most recently, TikTok joined forces with Indonesia's GoTo, which owns Gojek and Tokopedia. The social media company invested over $1.5B in GoTo, including $840M to acquire a 75% stake in Tokopedia.The deal enabled TikTok to resume its shopping app service in Indonesia, following Indonesia's ban on e-commerce transactions directly on social media platforms.Under the agreement, TikTok Shop will be combined with Tokopedia, essentially allowing TikTok to bypass the ban by redirecting shoppers to Tokopedia, where they will complete their purchases.This was a huge development as there are a lot of synergies:TikTok - the biggest social media platform in Indonesia.Tokopedia - an e-commerce powerhouse in Indonesia.Gojek - has an extensive logistics network and the most popular mobile wallet in Indonesia, GoPay.It made sense why shares of Sea plummeted following this news.But one part of the deal really got my attention: TikTok acquiring 75% of Tokopedia for $840M.That implies a valuation of about $1.1B.Just three years ago, Google (GOOG) invested in Tokopedia at a valuation of $7.5B.To see that big of a valuation drop and to see GoTo selling Indonesia's jewel to a foreign company at less than $1B, seems fishy to me. GoTo might be in a bad financial position to pull off that kind of move.And this could actually be bullish for Sea.In addition, if the deal doesn't fall through (expected to close in Q1 of 2024), Sea could enjoy market share gains which should be a major catalyst for the stock.If it does go through, Sea stock may be pressured for some time as sentiment turns sour again.ThesisSea is at an inflection point.More specifically, the company is gearing up for profitable growth as it abandons the grow-at-all-costs mentality.While growth has been lackluster lately, Sea still has a long growth runway due to secular trends in the mobile gaming, e-commerce, and fintech industries.That is why management is sacrificing short-term profitability for long-term market share gains and leadership, which should generate strong returns for shareholders in the long run.Investors loved it at $300, back when the stock was trading at nonsensical valuations.Today, investors can pick up shares of Sea at a 90% discount, despite being a fundamentally stronger company overall. What's more, growth is set to reaccelerate in 2024 and analysts have set a low bar on Sea as well.Yet, it receives no love.I think that's just irrational market behavior - in this kind of situation, it pays to be a contrarian.","news_type":1},"isVote":1,"tweetType":1,"viewCount":444,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":221969824034944,"gmtCreate":1695219042705,"gmtModify":1695219047242,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/221969824034944","repostId":"2368901380","repostType":2,"repost":{"id":"2368901380","pubTimestamp":1695197400,"share":"https://ttm.financial/m/news/2368901380?lang=&edition=fundamental","pubTime":"2023-09-20 16:10","market":"us","language":"en","title":"Sea Limited: Easy To Sea","url":"https://stock-news.laohu8.com/highlight/detail?id=2368901380","media":"Seeking Alpha","summary":"Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has","content":"<html><head></head><body><ul style=\"\"><li><p>Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.</p></li><li><p>Over roughly the last century of American capitalism, the market has demonstrated an especial penchant for doing so to commerce platforms.</p></li><li><p>It did so to Walmart in 1973-74. It did so to Lowe&#39;s in the 1980s. It did so to Amazon in the 2000s. It did so to <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> in 2008-2009.</p></li><li><p>And, today, once again, the market has curiously traded down one of the best commerce platforms on earth in something akin to a fevered, depressive panic.</p></li><li><p>Today, I will quantitatively demonstrate for you the irrationality behind this price action, and, in short, I believe Sea could prove to be a 10-bagger in the decade ahead.</p></li></ul><h2 id=\"id_2336691259\">It&#39;s Easy: Concisely Articulating The Sea Thesis</h2><ol start=\"1\" style=\"\"><li><p><em>Shopee remains the #1 ecommerce platform in SE Asia. It is the only profitable one. Lazada is the #2, and this is a Rocket Internet Startup that existed before Shopee but has since been surpassed by Shopee by a very long shot. Shopee is indisputably the best ecommerce platform in the region, and, again, it&#39;s the only profitable platform.</em></p></li><li><p><em>In the U.S., Walmart, Amazon, Target, Lowe&#39;s, Home Depot, Dollar General, grocery stores, and department stores have all co-existed and created trillions in equity value over the last 75 years.</em></p></li><li><p><em>In Latin America, MercadoLibre has co-existed with a host of rivals, including Amazon quite formidably in Latin America, and it has still done very well profitably. Notably, MercadoLibre only has 35% market share of total ecommerce GMV in Latin America, while Sea has 50% in SE Asia; yet there&#39;s no fevered panic over MercadoLibre&#39;s market share.</em></p></li><li><p><em>Sea has $7.7B in cash &amp; equivalents; $3.3B in convertible debt. This is a massive amount of resources with which it can further dominate the aforementioned unprofitable and historically stagnant/inferior competition. Sea also generates robust free cash flow quarterly now alongside its giant liquidity position on its balance sheet.</em></p></li><li><p><em>Sea owns Garena, which is now returning to growth. This is like Sea&#39;s AWS (AMZN) in a sense, giving it an advantage over rivals. Garena could also experience sales growth in the future, especially in light of Free Fire being unbanned in India recently. Garena produces about $1B in annualized cash flows for the conglomerate.</em></p></li><li><p><em>Sea has a FinTech business (Sea Money) with about 60M users on the platform. This alone could be worth $20B to $30B, and Sea currently trades at ~$18B in enterprise value (preposterous in my opinion). This is a rapidly growing, free cash flow generative business that provides core financial infrastructure to SE Asia&#39;s digital economy alongside a couple other rivals, including GoPay (GOTO) and OVO (GRAB).</em></p></li><li><p><em>SE Asia has a very, very long runway for growth demographically. The region is still in the very early innings of economic growth and development.</em></p></li><li><p><em>Sea has demonstrated an ability to successfully and organically (meaning without acquiring) build new products and scale them rapidly. While it&#39;s built three incredibly successful franchises over the last decade or so, i.e., Garena (500M+ users and highly profitable), Shopee (#1 ecom platform in SE Asia and only profitable one), and Sea Money (~60M users and profitable), it&#39;s highly likely that it creates new and compelling products in the future as well, adding to the 20-30% annualized growth I believe the conglomerate will achieve in the decade ahead, once we emerge from the current rate hiking cycle and Asian economic woes broadly, both of which have served to, on some level, halt the growth of SE Asia&#39;s tech sector momentarily.</em></p></li><li><p><em>Lastly, SE Asia&#39;s demographics are very favorable for sustained, elevated growth for Sea in the decades ahead (depicted below).</em></p></li><li><p><em>I believe a 10 bagger over the next 10 years will be seen as base case for the business.</em></p></li></ol><h3 id=\"id_1939531541\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>We will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.</p><h3 id=\"id_1441051994\">SE Asia Has A Long Runway For Growth And Development Still Ahead</h3><p>I understand that the data below is from 2017, but it&#39;s worth noting the total digital consumer TAM, as well as the projections for ecommerce growth, validation of which we can see in the ecommerce GMV chart shared just above.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cd94f173610ebc3a5baba659a92725bd\" alt=\"Sea Ltd.&#39;s F-1\" title=\"Sea Ltd.&#39;s F-1\" tg-width=\"640\" tg-height=\"248\"/><span>Sea Ltd.&#39;s F-1</span></p><p>Over the last 5-7 years, Shopee&#39;s market share has grown within a rapidly growing ecommerce GMV TAM.</p><p>In a very worst case scenario, Shopee&#39;s market share may shrink, but, in light of the growth of SE Asia&#39;s ecommerce TAM, Shopee could very well continue to grow at elevated rates for decades to come.</p><h2 id=\"id_1212589788\">Understanding The Share Price Dynamics For Sea Ltd.</h2><p>I would say there&#39;s a number of approaches I could take to illustrate why Sea Ltd. (NYSE:SE) went from trading at $350/share to nearly $35/share as of today.</p><p>The same number of approaches could be taken in understanding why its retail predecessors, e.g., Walmart (WMT), Lowe&#39;s (LOW), or Amazon (AMZN), likewise experienced fairly stunning share price declines early in their lifecycles.</p><p>Today, I will share with you data that, in my estimation, definitively delineates why Sea and many of the former market darlings have experienced such breathtaking declines over the last 18 months or so.</p><p>Let&#39;s start with the underlying market mechanisms that are not idiosyncratic to Sea. These mechanisms that we will review have created the declines we&#39;ve seen from businesses like Tesla (TSLA), Affirm (AFRM), Meta (META) and Airbnb (ABNB) over the last 12 months.</p><p>I&#39;ve shared the following chart often, but it certainly bears re-sharing and repeating:</p><h4 id=\"id_2907407713\">The Prices Of Equities Overshoot To The Upside And Overshoot To The Downside</h4><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ff6ac0b344710b22e1e69f1504babaa9\" alt=\"Truemind Capital\" title=\"Truemind Capital\" tg-width=\"640\" tg-height=\"380\"/><span>Truemind Capital</span></p><p>This chart is so ubiquitously shared and repeated on the internet for a reason:</p><p>It represents genuine reality of what you will experience in owning a given business/stock.</p><p>And we can see these precise dynamics playing out for Sea, as well as Adyen (OTCPK:ADYEY) and many, many other businesses in the market today.</p><h4 id=\"id_4285585971\">Roughly Depicting The True Intrinsic Value Of Sea Based On My Estimation Of The Growth Of Free Cash Flow Per Share</h4><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/57cbad23aa9bcf1dee4a0075f181ef3f\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"1280\" tg-height=\"802\"/><span>YCharts</span></p><h3 id=\"id_2734695393\">Roughly Depicting The True Intrinsic Value Of Adyen Based On My Estimation Of The Growth Of Free Cash Flow Per Share</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ad805058bef113f4d42f987c320000d3\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"1280\" tg-height=\"802\"/><span>YCharts</span></p><p>The charts align almost perfectly identically with the &#34;ubiquitously shared teaching chart,&#34; and this is no coincidence. This is perfectly how the market operates and prices equities.</p><p>&#34;As it was in the beginning, is now, and ever shall be, world without end. Amen.&#34;</p><p>The market&#39;s pricing of equities overshoots to the upside (too much exuberance) and overshoots to the downside (too much despair), and it has done this since the dawn of asset markets. The Great Warren Buffett has the market&#39;s behavior in this respect as the behavior of a &#34;drunken psycho,&#34; and we can certainly see and, for those that own Sea and Adyen, feel why.</p><h2 id=\"id_315136246\">Interest Rates &amp; Growth Rates</h2><p>To delve deeper into the underlying mechanisms driving the, as Mr. Buffett would call them, &#34;drunken, psychotic&#34; pricing dynamics of the market, we should consider how interest rates and individual company growth rates have impacted the valuations of Sea and Adyen.</p><p>When interest rates rise (i.e., the cost of credit in the economy rise), valuations decline, all else being equal (we will consider growth rates and their impact on valuations in a moment).</p><p>When interest rates decline (i.e., the cost of credit in the economy declines), valuations rise, all else being equal.</p><p>Below, we can see how a dramatic decline in interest rates created something akin to a &#34;zero gravity environment&#34; for the valuation of Sea (I will include Adyen as well to provide further context for this exercise).</p><h3 id=\"id_1263768699\">Sea&#39;s Valuation And The 10 Year Treasury Rate</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/edff2244b3aafc5ec72705c59f7127d1\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>As interest rates have risen at the fastest rate in the history of America, the precise inverse has occurred:</p><p>Instead of a zero gravity environment for Sea, it has experienced 2x gravity for its valuation and correspondingly its stock price.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ae087bc5ec40ea0953db0befae07bd7b\" alt=\"Visual Capitalist\" title=\"Visual Capitalist\" tg-width=\"640\" tg-height=\"829\"/><span>Visual Capitalist</span></p><p>If we couple this dynamic with the natural tendency of humans in crowds to panic and flee (sell), thereby creating market crashes, we can better understand why Sea&#39;s share price has been in free fall, despite reporting a fantastic Q2, in which it generated very healthy free cash flow and GAAP net income, grew sales, remained the #1 and only profitable ecommerce platform in SE Asia, grew its profitable FinTech business, and stabilized/grew its gaming business&#39; users.</p><p>We will explore Sea&#39;s quarter in following sections, but it certainly is worth noting in this valuation exercise that Sea reported an objectively fantastic Q2 2023 earnings. It could not have done better in my eyes.</p><p>Turning to Adyen, we can see precisely the same valuation dynamics, precipitated by higher interest rates, playing out.</p><h3 id=\"id_963054273\">Adyen&#39;s Valuation And The 10 Year Treasury Rate</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/79f77b27ef9ec2fd118b7e5d7e52147a\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>In addition to the &#34;next best alternative&#34; math associated with higher rates and valuations, meaning that with a higher risk free rate, I require more yield on my equity investment, which suggests I need a lower valuation to buy, higher interest rates slow economic and individual business growth.</p><p>Because we&#39;ve experienced the fastest rate hiking cycle in American history and because SE Asia reopened recently, after being locked down for years, ecommerce growth in SE Asia has been tepid relative to the last few years.</p><h3 id=\"id_3676535121\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>We will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.</p><h2 id=\"id_3773151236\">Growth Rates &amp; Valuations</h2><p>On my recent podcast, I noted that the market should not have priced Sea at $350/share based on 150%+ growth because that growth was unsustainable.</p><p>That is, in the same way it was improper for the market to price Sea at $350/share based on unsustainably high growth of 150%+, it&#39;s now highly likely that it&#39;s improper for the market to price Sea at nearly $35/share based on unsustainably low growth of 5%.</p><p>I would ask the market, &#34;Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth? Might the fastest interest rate hiking cycle ever have something to do with slowing growth? Might the China recession have something to do with slowing growth?&#34;</p><h3 id=\"id_1177283835\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>I mean this stuff is not rocket science.</p><h3 id=\"id_3584070374\">Sea Experienced Unsustainably High Growth And Now Unsustainably Low Growth</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/56be6b320f3dbb16ecb786f13c5a3af3\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>The reality for Sea is that its long term growth rate will land somewhere in the middle, and, as such, its intrinsic value is somewhere in the middle of these two utterly insane extremes.</p><p>Amazon experienced the identical valuation and growth dynamics in the early 2000s.</p><h3 id=\"id_2031746004\">Amazon Experienced Unsustainably High Growth And Unsustainably Low Growth (Bottoming At 13% in 2001)</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5d6f19fd84c68bae89d66eff83fe5074\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>To assign data to the claim that growth will find itself somewhere in the middle, below, we can see that the growth of SE Asia&#39;s ecommerce market has plateaued. The growth dynamics presented below align virtually 1 to 1 with Sea&#39;s astronomical growth in 2020/2021 and rather depressed growth in 2022 and 2023.</p><h3 id=\"id_643515669\">SE Asia Ecommerce Sales Annually (Note The Deceleration &amp; Plateau)</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>The above data answers my previously posed question,</p><blockquote><p><em>Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth?</em></p></blockquote><p>More than anything, this is why Sea has experienced such rapidly slowing growth in recent quarters and specifically in Q2 2023.</p><p>Eventually, SE Asia&#39;s ecommerce market and Sea will accelerate revenue growth, and the current panic will look highly misguided, just as pricing the business as if it would grow at 150% annualized for 10 years was highly misguided.</p><h2 id=\"id_2482640280\">Reviewing Sea&#39;s Q2 2023 &amp; The Business Broadly</h2><p>In our review of Monday&#39;s Q2 2023 earnings, I shared the four principle frameworks via which I select businesses to own.</p><p>I would certainly encourage you to read that review of Monday via the link below:</p><ul style=\"\"><li><p>Understanding Monday.com (MNDY)</p></li></ul><p>And, indeed, we&#39;ve employed one of those frameworks in ultimately deciding to own Sea Ltd. Specifically, we used the following framework:</p><ul style=\"\"><li><p><strong><em>Quality cultures that breed innovation within the larger conglomerate: </em></strong><em>We&#39;ve often explored the Spawner framework (I&#39;m working on a different name), which entails a company&#39;s ability to launch, or spawn, new successful business/product after new successful business/product, creating a nucleus of explosive, compounding sales growth. This is the idea that a business creates a culture in which its employees create new products successfully. With multiple products growing rapidly simultaneously, the business overall grows more rapidly and more durably. Some of my favorite examples that fit within this framework are Axon, Monday, Adyen , Sea, Tesla, Amazon, and MercadoLibre. Indeed, many of our businesses possess this incredible cultural structure, and that is why we&#39;ve chosen to own them.</em></p></li></ul><p>Sea began as a gaming studio/platform, i.e., Garena, which has produced the globally popular game Free Fire, from which Sea principally generates its ~$1B in cash flows annually.</p><h3 id=\"id_2202822765\">Sea&#39;s Garena Platform Key Performance Metrics</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/667df5a1ae563e13fe9b380297b5dafa\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"307\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>After successfully building this gaming studio, Sea launched Shopee in 2015.</p><p>Notably, a major ecommerce platform already existed at the time: Lazada, a former Rocket Internet startup, into which Alibaba (BABA) has poured billions of dollars.</p><p>Despite Lazada having a head start, Shopee quickly surpassed Lazada and became the undisputed, most dominant ecommerce platform in SE Asia.</p><h3 id=\"id_3416636853\">SE Asia Ecommerce Market Share Data 2022</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/234387265478d7a3eacaadad43f102d3\" alt=\"Momentum.Asia\" title=\"Momentum.Asia\" tg-width=\"1280\" tg-height=\"720\"/><span>Momentum.Asia</span></p><p>Notably, Sea is the only profitable ecommerce platform in the region, which I believe demonstrates the differentiated nature of the business and the execution thereof.</p><blockquote><p><em>There are many different service points we can touch and also continue to improve. And there are also many cost points that we will continue to improve upon and these are the key competencies, I think that brought us here to the current position of strong market leadership with the lowest cost to serve a platform that allows us to be both market leader, </em><strong><em>but also profitable and one and only in Southeast Asia so far.</em></strong><em> I think we will not give up that competitive moat and we&#39;ll continue to strengthen that.</em></p><p>Yanjun Wang, Chief Corporate Officer, Q2 2023 Sea Earnings Call</p></blockquote><p>Notably, Shopee grew ecommerce orders <em>and </em>grew sales at healthy rates in the quarter.</p><h3 id=\"id_4141599611\">Shopee Grew At 28% Year Over Year, Which Is Exceptional</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b9afc577874ff61d7708c2fbc860f84b\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"317\"/><span>Sea Q2 2023 Investor Presentation</span></p><blockquote><p><em>Gross orders increased by more than 10% quarter-on-quarter as a result of growth in both active buyers and buyer purchase frequency.</em></p><p>[I do think it could be argued that Brazil contributed to this gross order growth, and Shopee&#39;s GMV/gross orders are something to monitor in the years ahead, but the current pricing of the business suggests ecommerce growth will halt in perpetuity, but it is illogical to believe the Shopee would suddenly stop growing when we consider the WMT/HD/COST/WMT analogy and the fact that Shopee has dominated for nearly a decade. It&#39;s the strongest it&#39;s ever been and its domination will likely persist.]</p></blockquote><p>Following the creation of Shopee, in order to enable SE Asian folks to pay via the internet, Sea launched Sea Money (formerly Airpay), which has grown into one of the largest FinTech platforms on earth, with ~60M users.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8867ef7a958c7aed75ae501d59bcbd0b\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"319\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>Notably, all of these business segments are now fundamentally profitable.</p><h3 id=\"id_3666375119\">EC = Ecommerce; DE = Garena; DFS = Sea Money</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7d8b6255b1397c2f661bb8f8c6c0586a\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"460\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>Even accounting for interest, taxes, and depreciation and amortization, Sea generated robust free cash flow in Q2 2023.</p><p>Notably, <strong><em>Sea has done all of this in 10 years.</em></strong></p><p>In only 10 years, Sea has built three exceptionally dominant, platforms that nearly 700M to 1B total people use!</p><p>And these platforms serve these 700M to 1B people <em>profitably!</em></p><p>I mean how much logic and intuition does it require to foresee that Sea is just getting started?</p><p>I do not believe it requires much.</p><p>And I do believe Sea is just getting started, atop robust free cash flow, $7.7B in cash &amp; equivalents; $3.3B in convertible debt, and a very long runway for growth still ahead.</p><h2 id=\"id_1241524940\">Concluding Thoughts: The Skies Will Open Up And The Seas Will Part In Due Course</h2><p>I would invite you to review the &#34;10 Sea Commandments&#34; that I shared at the introduction of this note.</p><p>In my estimation, the investment is extremely easy at these levels.</p><p>I don&#39;t believe the price action is mysterious. We&#39;re experiencing identically what investors experienced in buying each of Sea&#39;s predecessors: Walmart, Amazon, and Lowe&#39;s when these businesses were similarly about 10-15 years old.</p><p>To conclude, Sea currently faces these economic headwinds. Notably, these headwinds will disappear in the years ahead:</p><ol start=\"1\" style=\"\"><li><p><em>The stoppage or cessation of growth for the SE Asian ecommerce market. It grew astronomically in 2020 and 2021 and even into 2022 as SE Asia took longer to remove lockdowns. It&#39;s now basically not growing, and Sea is not growing along with it.</em></p></li><li><p><em>Difficult year over year comps: It&#39;s very hard to grow at 100%+ annualized for multiple consecutive years, just like it&#39;s hard to sprint a 40 yard dash repeatedly. Sea will work through these difficult comps and resume elevated growth eventually.</em></p></li><li><p><em>The fastest rate hiking cycle in American history. The dollar, in many ways, governs growth of the global economic system by way of the dollar &#34;exporting&#34; U.S. monetary policy. The incredible strength of the dollar, created by the fastest interest rate hiking cycle in American history, has served to slow economic growth globally.</em></p></li><li><p><em>China is in a recession and has been. This could make economic conditions in Asia worse than they already are.</em></p></li></ol><p>Eventually, each of these negatives will dissipate, and the skies will open for Sea and the growth of its business.</p><p>I believe it could be an easy, profitable 10 bagger as of today over the next 10 years.</p><p>Thank you for reading, and have a great day.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Easy To Sea</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Easy To Sea\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-20 16:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4635848-easy-to-sea><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has...</p>\n\n<a href=\"https://seekingalpha.com/article/4635848-easy-to-sea\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU2430703178.SGD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (SGDHDG) INC","LU0823411888.USD":"法巴消费创新基金 Cap","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","LU0082616367.USD":"摩根大通美国科技A（dist）","LU2430703251.USD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (USD) INC","BK4083":"家庭装潢零售","BK4502":"阿里概念","LU0061474960.USD":"天利环球焦点基金AU Acc","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","BK4155":"大卖场与超市","BK4505":"高瓴资本持仓","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","BK4085":"互动家庭娱乐","SE":"Sea Ltd","BK4581":"高盛持仓","BK4504":"桥水持仓","LU0234572021.USD":"高盛美国核心股票组合Acc","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","LU0648000940.SGD":"Natixis Harris Associates Global Equity RA SGD","BK4539":"次新股","LU0821914370.USD":"贝莱德亚洲成长领袖A2","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4532":"文艺复兴科技持仓","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0672654240.SGD":"FTIF - Franklin US Opportunities A Acc SGD-H1","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","SG9999002620.SGD":"LionGlobal South East Asia SGD","BK4524":"宅经济概念","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","BK4527":"明星科技股","LU2430703095.HKD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (HKD) INC","BK4526":"热门中概股"},"source_url":"https://seekingalpha.com/article/4635848-easy-to-sea","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2368901380","content_text":"Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has demonstrated an especial penchant for doing so to commerce platforms.It did so to Walmart in 1973-74. It did so to Lowe's in the 1980s. It did so to Amazon in the 2000s. It did so to MercadoLibre in 2008-2009.And, today, once again, the market has curiously traded down one of the best commerce platforms on earth in something akin to a fevered, depressive panic.Today, I will quantitatively demonstrate for you the irrationality behind this price action, and, in short, I believe Sea could prove to be a 10-bagger in the decade ahead.It's Easy: Concisely Articulating The Sea ThesisShopee remains the #1 ecommerce platform in SE Asia. It is the only profitable one. Lazada is the #2, and this is a Rocket Internet Startup that existed before Shopee but has since been surpassed by Shopee by a very long shot. Shopee is indisputably the best ecommerce platform in the region, and, again, it's the only profitable platform.In the U.S., Walmart, Amazon, Target, Lowe's, Home Depot, Dollar General, grocery stores, and department stores have all co-existed and created trillions in equity value over the last 75 years.In Latin America, MercadoLibre has co-existed with a host of rivals, including Amazon quite formidably in Latin America, and it has still done very well profitably. Notably, MercadoLibre only has 35% market share of total ecommerce GMV in Latin America, while Sea has 50% in SE Asia; yet there's no fevered panic over MercadoLibre's market share.Sea has $7.7B in cash & equivalents; $3.3B in convertible debt. This is a massive amount of resources with which it can further dominate the aforementioned unprofitable and historically stagnant/inferior competition. Sea also generates robust free cash flow quarterly now alongside its giant liquidity position on its balance sheet.Sea owns Garena, which is now returning to growth. This is like Sea's AWS (AMZN) in a sense, giving it an advantage over rivals. Garena could also experience sales growth in the future, especially in light of Free Fire being unbanned in India recently. Garena produces about $1B in annualized cash flows for the conglomerate.Sea has a FinTech business (Sea Money) with about 60M users on the platform. This alone could be worth $20B to $30B, and Sea currently trades at ~$18B in enterprise value (preposterous in my opinion). This is a rapidly growing, free cash flow generative business that provides core financial infrastructure to SE Asia's digital economy alongside a couple other rivals, including GoPay (GOTO) and OVO (GRAB).SE Asia has a very, very long runway for growth demographically. The region is still in the very early innings of economic growth and development.Sea has demonstrated an ability to successfully and organically (meaning without acquiring) build new products and scale them rapidly. While it's built three incredibly successful franchises over the last decade or so, i.e., Garena (500M+ users and highly profitable), Shopee (#1 ecom platform in SE Asia and only profitable one), and Sea Money (~60M users and profitable), it's highly likely that it creates new and compelling products in the future as well, adding to the 20-30% annualized growth I believe the conglomerate will achieve in the decade ahead, once we emerge from the current rate hiking cycle and Asian economic woes broadly, both of which have served to, on some level, halt the growth of SE Asia's tech sector momentarily.Lastly, SE Asia's demographics are very favorable for sustained, elevated growth for Sea in the decades ahead (depicted below).I believe a 10 bagger over the next 10 years will be seen as base case for the business.SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaWe will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.SE Asia Has A Long Runway For Growth And Development Still AheadI understand that the data below is from 2017, but it's worth noting the total digital consumer TAM, as well as the projections for ecommerce growth, validation of which we can see in the ecommerce GMV chart shared just above.Sea Ltd.'s F-1Over the last 5-7 years, Shopee's market share has grown within a rapidly growing ecommerce GMV TAM.In a very worst case scenario, Shopee's market share may shrink, but, in light of the growth of SE Asia's ecommerce TAM, Shopee could very well continue to grow at elevated rates for decades to come.Understanding The Share Price Dynamics For Sea Ltd.I would say there's a number of approaches I could take to illustrate why Sea Ltd. (NYSE:SE) went from trading at $350/share to nearly $35/share as of today.The same number of approaches could be taken in understanding why its retail predecessors, e.g., Walmart (WMT), Lowe's (LOW), or Amazon (AMZN), likewise experienced fairly stunning share price declines early in their lifecycles.Today, I will share with you data that, in my estimation, definitively delineates why Sea and many of the former market darlings have experienced such breathtaking declines over the last 18 months or so.Let's start with the underlying market mechanisms that are not idiosyncratic to Sea. These mechanisms that we will review have created the declines we've seen from businesses like Tesla (TSLA), Affirm (AFRM), Meta (META) and Airbnb (ABNB) over the last 12 months.I've shared the following chart often, but it certainly bears re-sharing and repeating:The Prices Of Equities Overshoot To The Upside And Overshoot To The DownsideTruemind CapitalThis chart is so ubiquitously shared and repeated on the internet for a reason:It represents genuine reality of what you will experience in owning a given business/stock.And we can see these precise dynamics playing out for Sea, as well as Adyen (OTCPK:ADYEY) and many, many other businesses in the market today.Roughly Depicting The True Intrinsic Value Of Sea Based On My Estimation Of The Growth Of Free Cash Flow Per ShareYChartsRoughly Depicting The True Intrinsic Value Of Adyen Based On My Estimation Of The Growth Of Free Cash Flow Per ShareYChartsThe charts align almost perfectly identically with the \"ubiquitously shared teaching chart,\" and this is no coincidence. This is perfectly how the market operates and prices equities.\"As it was in the beginning, is now, and ever shall be, world without end. Amen.\"The market's pricing of equities overshoots to the upside (too much exuberance) and overshoots to the downside (too much despair), and it has done this since the dawn of asset markets. The Great Warren Buffett has the market's behavior in this respect as the behavior of a \"drunken psycho,\" and we can certainly see and, for those that own Sea and Adyen, feel why.Interest Rates & Growth RatesTo delve deeper into the underlying mechanisms driving the, as Mr. Buffett would call them, \"drunken, psychotic\" pricing dynamics of the market, we should consider how interest rates and individual company growth rates have impacted the valuations of Sea and Adyen.When interest rates rise (i.e., the cost of credit in the economy rise), valuations decline, all else being equal (we will consider growth rates and their impact on valuations in a moment).When interest rates decline (i.e., the cost of credit in the economy declines), valuations rise, all else being equal.Below, we can see how a dramatic decline in interest rates created something akin to a \"zero gravity environment\" for the valuation of Sea (I will include Adyen as well to provide further context for this exercise).Sea's Valuation And The 10 Year Treasury RateYChartsAs interest rates have risen at the fastest rate in the history of America, the precise inverse has occurred:Instead of a zero gravity environment for Sea, it has experienced 2x gravity for its valuation and correspondingly its stock price.Visual CapitalistIf we couple this dynamic with the natural tendency of humans in crowds to panic and flee (sell), thereby creating market crashes, we can better understand why Sea's share price has been in free fall, despite reporting a fantastic Q2, in which it generated very healthy free cash flow and GAAP net income, grew sales, remained the #1 and only profitable ecommerce platform in SE Asia, grew its profitable FinTech business, and stabilized/grew its gaming business' users.We will explore Sea's quarter in following sections, but it certainly is worth noting in this valuation exercise that Sea reported an objectively fantastic Q2 2023 earnings. It could not have done better in my eyes.Turning to Adyen, we can see precisely the same valuation dynamics, precipitated by higher interest rates, playing out.Adyen's Valuation And The 10 Year Treasury RateYChartsIn addition to the \"next best alternative\" math associated with higher rates and valuations, meaning that with a higher risk free rate, I require more yield on my equity investment, which suggests I need a lower valuation to buy, higher interest rates slow economic and individual business growth.Because we've experienced the fastest rate hiking cycle in American history and because SE Asia reopened recently, after being locked down for years, ecommerce growth in SE Asia has been tepid relative to the last few years.SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaWe will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.Growth Rates & ValuationsOn my recent podcast, I noted that the market should not have priced Sea at $350/share based on 150%+ growth because that growth was unsustainable.That is, in the same way it was improper for the market to price Sea at $350/share based on unsustainably high growth of 150%+, it's now highly likely that it's improper for the market to price Sea at nearly $35/share based on unsustainably low growth of 5%.I would ask the market, \"Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth? Might the fastest interest rate hiking cycle ever have something to do with slowing growth? Might the China recession have something to do with slowing growth?\"SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaI mean this stuff is not rocket science.Sea Experienced Unsustainably High Growth And Now Unsustainably Low GrowthYChartsThe reality for Sea is that its long term growth rate will land somewhere in the middle, and, as such, its intrinsic value is somewhere in the middle of these two utterly insane extremes.Amazon experienced the identical valuation and growth dynamics in the early 2000s.Amazon Experienced Unsustainably High Growth And Unsustainably Low Growth (Bottoming At 13% in 2001)YChartsTo assign data to the claim that growth will find itself somewhere in the middle, below, we can see that the growth of SE Asia's ecommerce market has plateaued. The growth dynamics presented below align virtually 1 to 1 with Sea's astronomical growth in 2020/2021 and rather depressed growth in 2022 and 2023.SE Asia Ecommerce Sales Annually (Note The Deceleration & Plateau)StatistaThe above data answers my previously posed question,Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth?More than anything, this is why Sea has experienced such rapidly slowing growth in recent quarters and specifically in Q2 2023.Eventually, SE Asia's ecommerce market and Sea will accelerate revenue growth, and the current panic will look highly misguided, just as pricing the business as if it would grow at 150% annualized for 10 years was highly misguided.Reviewing Sea's Q2 2023 & The Business BroadlyIn our review of Monday's Q2 2023 earnings, I shared the four principle frameworks via which I select businesses to own.I would certainly encourage you to read that review of Monday via the link below:Understanding Monday.com (MNDY)And, indeed, we've employed one of those frameworks in ultimately deciding to own Sea Ltd. Specifically, we used the following framework:Quality cultures that breed innovation within the larger conglomerate: We've often explored the Spawner framework (I'm working on a different name), which entails a company's ability to launch, or spawn, new successful business/product after new successful business/product, creating a nucleus of explosive, compounding sales growth. This is the idea that a business creates a culture in which its employees create new products successfully. With multiple products growing rapidly simultaneously, the business overall grows more rapidly and more durably. Some of my favorite examples that fit within this framework are Axon, Monday, Adyen , Sea, Tesla, Amazon, and MercadoLibre. Indeed, many of our businesses possess this incredible cultural structure, and that is why we've chosen to own them.Sea began as a gaming studio/platform, i.e., Garena, which has produced the globally popular game Free Fire, from which Sea principally generates its ~$1B in cash flows annually.Sea's Garena Platform Key Performance MetricsSea Q2 2023 Investor PresentationAfter successfully building this gaming studio, Sea launched Shopee in 2015.Notably, a major ecommerce platform already existed at the time: Lazada, a former Rocket Internet startup, into which Alibaba (BABA) has poured billions of dollars.Despite Lazada having a head start, Shopee quickly surpassed Lazada and became the undisputed, most dominant ecommerce platform in SE Asia.SE Asia Ecommerce Market Share Data 2022Momentum.AsiaNotably, Sea is the only profitable ecommerce platform in the region, which I believe demonstrates the differentiated nature of the business and the execution thereof.There are many different service points we can touch and also continue to improve. And there are also many cost points that we will continue to improve upon and these are the key competencies, I think that brought us here to the current position of strong market leadership with the lowest cost to serve a platform that allows us to be both market leader, but also profitable and one and only in Southeast Asia so far. I think we will not give up that competitive moat and we'll continue to strengthen that.Yanjun Wang, Chief Corporate Officer, Q2 2023 Sea Earnings CallNotably, Shopee grew ecommerce orders and grew sales at healthy rates in the quarter.Shopee Grew At 28% Year Over Year, Which Is ExceptionalSea Q2 2023 Investor PresentationGross orders increased by more than 10% quarter-on-quarter as a result of growth in both active buyers and buyer purchase frequency.[I do think it could be argued that Brazil contributed to this gross order growth, and Shopee's GMV/gross orders are something to monitor in the years ahead, but the current pricing of the business suggests ecommerce growth will halt in perpetuity, but it is illogical to believe the Shopee would suddenly stop growing when we consider the WMT/HD/COST/WMT analogy and the fact that Shopee has dominated for nearly a decade. It's the strongest it's ever been and its domination will likely persist.]Following the creation of Shopee, in order to enable SE Asian folks to pay via the internet, Sea launched Sea Money (formerly Airpay), which has grown into one of the largest FinTech platforms on earth, with ~60M users.Sea Q2 2023 Investor PresentationNotably, all of these business segments are now fundamentally profitable.EC = Ecommerce; DE = Garena; DFS = Sea MoneySea Q2 2023 Investor PresentationEven accounting for interest, taxes, and depreciation and amortization, Sea generated robust free cash flow in Q2 2023.Notably, Sea has done all of this in 10 years.In only 10 years, Sea has built three exceptionally dominant, platforms that nearly 700M to 1B total people use!And these platforms serve these 700M to 1B people profitably!I mean how much logic and intuition does it require to foresee that Sea is just getting started?I do not believe it requires much.And I do believe Sea is just getting started, atop robust free cash flow, $7.7B in cash & equivalents; $3.3B in convertible debt, and a very long runway for growth still ahead.Concluding Thoughts: The Skies Will Open Up And The Seas Will Part In Due CourseI would invite you to review the \"10 Sea Commandments\" that I shared at the introduction of this note.In my estimation, the investment is extremely easy at these levels.I don't believe the price action is mysterious. We're experiencing identically what investors experienced in buying each of Sea's predecessors: Walmart, Amazon, and Lowe's when these businesses were similarly about 10-15 years old.To conclude, Sea currently faces these economic headwinds. Notably, these headwinds will disappear in the years ahead:The stoppage or cessation of growth for the SE Asian ecommerce market. It grew astronomically in 2020 and 2021 and even into 2022 as SE Asia took longer to remove lockdowns. It's now basically not growing, and Sea is not growing along with it.Difficult year over year comps: It's very hard to grow at 100%+ annualized for multiple consecutive years, just like it's hard to sprint a 40 yard dash repeatedly. Sea will work through these difficult comps and resume elevated growth eventually.The fastest rate hiking cycle in American history. The dollar, in many ways, governs growth of the global economic system by way of the dollar \"exporting\" U.S. monetary policy. The incredible strength of the dollar, created by the fastest interest rate hiking cycle in American history, has served to slow economic growth globally.China is in a recession and has been. This could make economic conditions in Asia worse than they already are.Eventually, each of these negatives will dissipate, and the skies will open for Sea and the growth of its business.I believe it could be an easy, profitable 10 bagger as of today over the next 10 years.Thank you for reading, and have a great day.","news_type":1},"isVote":1,"tweetType":1,"viewCount":291,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":215193327407312,"gmtCreate":1693553841972,"gmtModify":1693553847580,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"wrong judgement&nbsp;&nbsp;.. Shopee is bigger than lazada in terms of customer volume or revenue&nbsp;","listText":"wrong judgement&nbsp;&nbsp;.. Shopee is bigger than lazada in terms of customer volume or revenue&nbsp;","text":"wrong judgement .. Shopee is bigger than lazada in terms of customer volume or revenue","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/215193327407312","repostId":"2364219735","repostType":2,"repost":{"id":"2364219735","pubTimestamp":1693553400,"share":"https://ttm.financial/m/news/2364219735?lang=&edition=fundamental","pubTime":"2023-09-01 15:30","market":"us","language":"en","title":"Sea Limited: Decline In Market Share Likely To Hurt The Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2364219735","media":"seekingalpha","summary":"The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in ","content":"<html><head></head><body><ul style=\"\"><li><p>The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.</p></li><li><p>Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in Southeast Asia.</p></li><li><p>Alibaba’s international commerce segment which includes Lazada reported 60% YoY revenue growth and significant improvement in EBITA margin.</p></li><li><p>It would be difficult for Sea Limited to deliver good growth with reasonable profit due to modest investments in first-party logistics.</p></li><li><p>We could see further correction in Sea Limited stock over the next few quarters as the company loses market share in key regions.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3546b4c4790cdb29d0d746aa3616f0b2\" tg-width=\"750\" tg-height=\"500\"/></p><p>Sea Limited (NYSE:SE) stock is down by 30% in the year-to-date despite a massive cost-cutting program which helped the company turn profitable in the last few quarters. Most of the Big Tech companies in the U.S. have also launched major reductions in headcount which helped improve their EPS and also led to a big tech rally in 2023. On the other hand, Sea Limited did not see any gains in the stock price due to a number of new challenges.</p><p>Sea Limited is facing competition from Alibaba&#39;s (BABA) Lazada in Southeast Asia. In the recent quarter, Sea Limited reported YoY revenue growth of 5% while Alibaba&#39;s International Commerce retail segment reported YoY revenue growth of 60%. Alibaba&#39;s International Commerce segment also reduced losses by 70% and is now close to being profitable. CNBC mentioned that Sea Limited&#39;s management is now trying to pivot back to growth while putting profitability as a lower priority.</p><p>This continuous back and forth between growth and profitability shows the dilemma facing Sea Limited. It is unlikely that Sea Limited will be able to deliver sustainable growth with healthy profits in the near term which will continue to put downward pressure on the stock. Despite the recent correction, it is better to use a wait-and-watch strategy with this stock.</p><p>Due to these challenges, the stock should have a Hold rating in my opinion. Sea Limited has been able to surprise Wall Street in the past by launching very popular games and services. If the management is able to another profitable segment in the next few quarters, we could see a strong bullish momentum in the stock.</p><h2 id=\"id_3660485309\">Losing market share</h2><p>The rapid growth of Sea Limited during the pandemic was funded by being a loss leader. The company invested heavily in attracting new customers with higher discounts and giving incentives to sellers. This inevitably led to massive losses in the company. As the tech boom ended in late 2021, Sea Limited&#39;s stock went into a massive bear phase and we have seen the stock decline by a staggering 90% since hitting the peak in 2021.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/16c99a52581ceac24c37dbdd53cd45ae\" tg-width=\"972\" tg-height=\"439\"/></p><p>Ycharts</p><p></p><p>Figure 1: Sea Limited&#39;s YoY revenue growth has fallen behind Alibaba.</p><p>Last year, Sea Limited started pursuing profitability by lowering incentives, hiking commission rates, and cutting headcount. This has helped the company become profitable but has caused a significant decline in market share. The e-commerce segment in Southeast Asia and other regions has been showing promising growth. According to recent earnings results, Alibaba&#39;s International Commerce retail segment has jumped by 60% on a YoY basis. A bulk of Alibaba&#39;s international retail revenue comes from Lazada which is in direct competition with Sea Limited.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/769666f7bde2531cfae7fc56b7814efe\" tg-width=\"640\" tg-height=\"98\"/></p><p>Company Filings</p><p></p><p>Figure 2: Increase in Alibaba&#39;s international retail revenue.</p><p>Alibaba is also injecting additional funds into Lazada. Recently, it has added $845 million which should give Lazada enough firepower to attract more customers and take market share away from Sea Limited.</p><h2 id=\"id_2672636179\">Return to massive losses</h2><p>Sea Limited&#39;s management has mentioned that they will start prioritizing revenue growth in the next few quarters. This will lead the company back to losses. One of the reasons why Wall Street has not turned bullish towards the stock despite recent profitability is the lack of sustainable long-term profitability. The only way Sea Limited can improve its revenue growth is by giving bigger incentives to sellers and customers.</p><p>Alibaba is looking to spinoff the company into six different businesses. One of these would be the international business vertical. It is important for Alibaba to show strong metrics in a key international region before spinning off the international business. We could see Alibaba prioritize growth in Lazada for the next few quarters by making higher investments in logistics and improving the market share. This will reduce the ability of Sea Limited to deliver strong revenue growth and it could eat away the small profitability which the company has recently reported.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/625eebb94c6ca0c274115d9c89fa4669\" tg-width=\"978\" tg-height=\"410\"/></p><p>Ycharts</p><p></p><p>Figure 3: Forward revenue and EPS estimates of Sea Limited.</p><p>The forward revenue estimates of Sea Limited are declining as the YoY revenue growth has reduced. As shown in the above image, the consensus EPS estimate for 2 fiscal years ahead is $3.20. Sea Limited&#39;s stock is trading at 12 times the EPS estimate for 2 fiscal years ahead. This seems a modest valuation multiple. However, we could see a substantial decrease in EPS and possibly a restart of big losses as the company tries to ramp up revenue growth and protect its market share.</p><p>Investors looking to make an entry at the current price should look at the possibility and scale of future losses in Sea Limited. A higher revenue base and intense competition will prevent Sea Limited from showing the YoY revenue growth it reported during the pandemic which helped the stock gain a massive bull run. At the same time, we could see a significant decline in margins in the near term.</p><h2 id=\"id_2653114293\">Upside potential for Sea Limited</h2><p>Despite the above-mentioned challenges, Sea Limited could still surprise with a stronger-than-expected earnings result in the next few quarters. This would require the company to increase the cost-cutting measures. It would also need to be very prudent in future incentives to attract customers and merchants. The management has mentioned that they would be prioritising revenue growth which is one of the reasons why it could be difficult to contain spiralling costs.</p><p>In the past few years, Sea Limited has been able to launch new services and games which were highly popular and profitable for the company. If the company launches another popular game like Free Fire, it could change the growth and EPS trajectory for the company giving the stock a strong bullish sentiment.</p><h2 id=\"id_3080090989\">Impact on Sea Limited stock</h2><p>The e-commerce business is to a large extent a winner-takes-all market. We have seen this in the U.S. as well as in other regions like China, India, and Europe. Sea Limited has spent massive resources on incentives, marketing, and trying to attract customers instead of building a first-party logistics network that can rival bigger players. A lack of a strong moat will hurt the company as most of the tailwind due to the pandemic has disappeared.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c33deb295388278bc82d4a3f6bc40e58\" tg-width=\"976\" tg-height=\"494\"/></p><p>Ycharts</p><p></p><p>Figure 4: High PE ratio of SE despite lower revenue growth.</p><p>Sea Limited&#39;s PE ratio is still quite high while the company is reporting single-digit YoY revenue growth. As mentioned above, it is highly likely that we will see a decline in margins or big losses from Sea Limited in the next few quarters as the company tries to reignite its revenue growth. It would be better for investors to wait and watch for another quarter or two before making an entry into this stock.</p><h2 id=\"id_66661972\">Investor takeaway</h2><p>Sea Limited reported 5% YoY revenue growth which was significantly lower than the 60% YoY revenue growth reported by Alibaba&#39;s International commerce retail business. Alibaba&#39;s Lazada is a major competitor for Sea Limited and Alibaba is injecting massive resources in order to improve the market share of Lazada.</p><p>Sea Limited&#39;s management is trying to restart revenue growth which could lead to a decline in margins and bigger losses. The revenue base of Sea Limited is quite large compared to the pre-pandemic period which will make it more difficult to report high YoY revenue growth. The forward EPS estimate seems quite unrealistic as the company is trying to ramp up revenue growth. I think there are a lot of risks with the current strategy of the management and any future headwind could cause further correction in the stock.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Decline In Market Share Likely To Hurt The Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Decline In Market Share Likely To Hurt The Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-01 15:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in ...</p>\n\n<a href=\"https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0251143029.SGD":"Fidelity ASEAN A-SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","LU0210637038.USD":"HSBC GIF THAI EQUITY \"AD\" INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","LU1688375341.USD":"贝莱德中国灵活股票基金","BK4585":"ETF&股票定投概念","BK4085":"互动家庭娱乐","LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","BK4566":"资本集团","BK4504":"桥水持仓","BK4505":"高瓴资本持仓","BK4551":"寇图资本持仓","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","BK4220":"综合零售","LU0651946864.USD":"贝莱德新兴市场股票收益A2","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","LU1051768304.USD":"贝莱德新兴市场股票收益A6","SG9999002620.SGD":"LionGlobal South East Asia SGD","SG9999002406.SGD":"利安新加坡信托基金","BK4526":"热门中概股","BK4538":"云计算","LU0251143458.SGD":"Fidelity Emerging Markets A-SGD","LU1046422090.SGD":"Fidelity Pacific A-SGD","SE":"Sea Ltd","BK4527":"明星科技股","LU1515016050.SGD":"Blackrock Emerging Markets Equity Income A6 SGD-H","BK4122":"互联网与直销零售","SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","BK4535":"淡马锡持仓","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","SG9999013478.USD":"利安新加坡股息基金","BK4558":"双十一","IE00B0JY6N72.USD":"PINEBRIDGE GLOBAL EMERGING MARKETS FOCUS EQUITY \"A\" (USD) ACC","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","SG9999002604.SGD":"LionGlobal Singapore/Malaysia SGD","BK4534":"瑞士信贷持仓","BK4548":"巴美列捷福持仓","BK4531":"中概回港概念","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4554":"元宇宙及AR概念","BK4565":"NFT概念","SG9999001135.SGD":"United ASEAN Fund SGD","LU0310800965.SGD":"FTIF - Templeton Global Balanced A Acc SGD"},"source_url":"https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2364219735","content_text":"The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in Southeast Asia.Alibaba’s international commerce segment which includes Lazada reported 60% YoY revenue growth and significant improvement in EBITA margin.It would be difficult for Sea Limited to deliver good growth with reasonable profit due to modest investments in first-party logistics.We could see further correction in Sea Limited stock over the next few quarters as the company loses market share in key regions.Sea Limited (NYSE:SE) stock is down by 30% in the year-to-date despite a massive cost-cutting program which helped the company turn profitable in the last few quarters. Most of the Big Tech companies in the U.S. have also launched major reductions in headcount which helped improve their EPS and also led to a big tech rally in 2023. On the other hand, Sea Limited did not see any gains in the stock price due to a number of new challenges.Sea Limited is facing competition from Alibaba's (BABA) Lazada in Southeast Asia. In the recent quarter, Sea Limited reported YoY revenue growth of 5% while Alibaba's International Commerce retail segment reported YoY revenue growth of 60%. Alibaba's International Commerce segment also reduced losses by 70% and is now close to being profitable. CNBC mentioned that Sea Limited's management is now trying to pivot back to growth while putting profitability as a lower priority.This continuous back and forth between growth and profitability shows the dilemma facing Sea Limited. It is unlikely that Sea Limited will be able to deliver sustainable growth with healthy profits in the near term which will continue to put downward pressure on the stock. Despite the recent correction, it is better to use a wait-and-watch strategy with this stock.Due to these challenges, the stock should have a Hold rating in my opinion. Sea Limited has been able to surprise Wall Street in the past by launching very popular games and services. If the management is able to another profitable segment in the next few quarters, we could see a strong bullish momentum in the stock.Losing market shareThe rapid growth of Sea Limited during the pandemic was funded by being a loss leader. The company invested heavily in attracting new customers with higher discounts and giving incentives to sellers. This inevitably led to massive losses in the company. As the tech boom ended in late 2021, Sea Limited's stock went into a massive bear phase and we have seen the stock decline by a staggering 90% since hitting the peak in 2021.YchartsFigure 1: Sea Limited's YoY revenue growth has fallen behind Alibaba.Last year, Sea Limited started pursuing profitability by lowering incentives, hiking commission rates, and cutting headcount. This has helped the company become profitable but has caused a significant decline in market share. The e-commerce segment in Southeast Asia and other regions has been showing promising growth. According to recent earnings results, Alibaba's International Commerce retail segment has jumped by 60% on a YoY basis. A bulk of Alibaba's international retail revenue comes from Lazada which is in direct competition with Sea Limited.Company FilingsFigure 2: Increase in Alibaba's international retail revenue.Alibaba is also injecting additional funds into Lazada. Recently, it has added $845 million which should give Lazada enough firepower to attract more customers and take market share away from Sea Limited.Return to massive lossesSea Limited's management has mentioned that they will start prioritizing revenue growth in the next few quarters. This will lead the company back to losses. One of the reasons why Wall Street has not turned bullish towards the stock despite recent profitability is the lack of sustainable long-term profitability. The only way Sea Limited can improve its revenue growth is by giving bigger incentives to sellers and customers.Alibaba is looking to spinoff the company into six different businesses. One of these would be the international business vertical. It is important for Alibaba to show strong metrics in a key international region before spinning off the international business. We could see Alibaba prioritize growth in Lazada for the next few quarters by making higher investments in logistics and improving the market share. This will reduce the ability of Sea Limited to deliver strong revenue growth and it could eat away the small profitability which the company has recently reported.YchartsFigure 3: Forward revenue and EPS estimates of Sea Limited.The forward revenue estimates of Sea Limited are declining as the YoY revenue growth has reduced. As shown in the above image, the consensus EPS estimate for 2 fiscal years ahead is $3.20. Sea Limited's stock is trading at 12 times the EPS estimate for 2 fiscal years ahead. This seems a modest valuation multiple. However, we could see a substantial decrease in EPS and possibly a restart of big losses as the company tries to ramp up revenue growth and protect its market share.Investors looking to make an entry at the current price should look at the possibility and scale of future losses in Sea Limited. A higher revenue base and intense competition will prevent Sea Limited from showing the YoY revenue growth it reported during the pandemic which helped the stock gain a massive bull run. At the same time, we could see a significant decline in margins in the near term.Upside potential for Sea LimitedDespite the above-mentioned challenges, Sea Limited could still surprise with a stronger-than-expected earnings result in the next few quarters. This would require the company to increase the cost-cutting measures. It would also need to be very prudent in future incentives to attract customers and merchants. The management has mentioned that they would be prioritising revenue growth which is one of the reasons why it could be difficult to contain spiralling costs.In the past few years, Sea Limited has been able to launch new services and games which were highly popular and profitable for the company. If the company launches another popular game like Free Fire, it could change the growth and EPS trajectory for the company giving the stock a strong bullish sentiment.Impact on Sea Limited stockThe e-commerce business is to a large extent a winner-takes-all market. We have seen this in the U.S. as well as in other regions like China, India, and Europe. Sea Limited has spent massive resources on incentives, marketing, and trying to attract customers instead of building a first-party logistics network that can rival bigger players. A lack of a strong moat will hurt the company as most of the tailwind due to the pandemic has disappeared.YchartsFigure 4: High PE ratio of SE despite lower revenue growth.Sea Limited's PE ratio is still quite high while the company is reporting single-digit YoY revenue growth. As mentioned above, it is highly likely that we will see a decline in margins or big losses from Sea Limited in the next few quarters as the company tries to reignite its revenue growth. It would be better for investors to wait and watch for another quarter or two before making an entry into this stock.Investor takeawaySea Limited reported 5% YoY revenue growth which was significantly lower than the 60% YoY revenue growth reported by Alibaba's International commerce retail business. Alibaba's Lazada is a major competitor for Sea Limited and Alibaba is injecting massive resources in order to improve the market share of Lazada.Sea Limited's management is trying to restart revenue growth which could lead to a decline in margins and bigger losses. The revenue base of Sea Limited is quite large compared to the pre-pandemic period which will make it more difficult to report high YoY revenue growth. The forward EPS estimate seems quite unrealistic as the company is trying to ramp up revenue growth. I think there are a lot of risks with the current strategy of the management and any future headwind could cause further correction in the stock.","news_type":1},"isVote":1,"tweetType":1,"viewCount":346,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":211934111969304,"gmtCreate":1692772598232,"gmtModify":1692772604207,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Let's watch it&nbsp;","listText":"Let's watch it&nbsp;","text":"Let's watch it","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/211934111969304","repostId":"2361643366","repostType":2,"repost":{"id":"2361643366","pubTimestamp":1692770565,"share":"https://ttm.financial/m/news/2361643366?lang=&edition=fundamental","pubTime":"2023-08-23 14:02","market":"us","language":"en","title":"Is Sea Limited's Recent Slump Warranted?","url":"https://stock-news.laohu8.com/highlight/detail?id=2361643366","media":"GuruFocus.com","summary":"Singapore-based technology firm, Sea Ltd  faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd 's salient variables.GuruFocus has detected 2 Warning Sign with C. Click here to check it out.Citigroup Inc 's Alicia Yap adjusted Sea Ltd 's target price to $50 per share from a previous $98, citing that Sea's battle to maintain its market share is starting. In my view, Yap's analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore's consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap's take.Further, JPMorgan Chase & Co  analyst, Ranjan Sharma downgraded Sea Ltd 's stock to neu","content":"<html><head></head><body><p>Singapore-based technology firm, <a href=\"https://laohu8.com/S/SE\">Sea Ltd</a> faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.</p><p>Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd (NYSE:SE)&#39;s salient variables.</p><p>Herewith are a few aspects to consider.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/207c690cf3bb335bb5b1b555c09f25f0\" tg-width=\"2764\" tg-height=\"512\"/></p><h3 id=\"id_88448883\">Details of the bearish calls from Wall Street</h3><p>Sea Ltd experienced two noticeable downgrades from Wall Street after its second-quarter earnings release. The first downgrade was from Citigroup Inc (NYSE:C), based on a top-down vantage point.</p><p>Citigroup Inc&#39;s Alicia Yap adjusted Sea Ltd (NYSE:SE)&#39;s target price to $50 per share from a previous $98, citing that Sea&#39;s battle to maintain its market share is starting. In my view, Yap&#39;s analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore&#39;s consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap&#39;s take.</p><h4 id=\"id_1357262475\">Further Analyst Downgrades</h4><p>Further, JPMorgan Chase &amp; Co analyst, Ranjan Sharma downgraded Sea Ltd&#39;s stock to neutral from overweight and assigned a price target of $45.</p><p>According to Sharma: &#34;SE&#39;s decision to accelerate e-commerce investments in growth is likely to materially weigh on its earnings and share price in the near term,&#34; he added that &#34;SE could potentially incur heavy investments in 2H23 resulting in earnings decline in [the second-half].&#34;</p><p>Sharma&#39;s argument is somewhat questionable. I say this because although the stock market tends to price structural earnings slumps, it typically does not consider short-term re-investment-driven cost restructurings disadvantageous. Nevertheless, JPMorgan Chase &amp; Co (NYSE:JPM)&#39;s outlook might have a significant impact on the market, regardless of the ground truth.</p><h3 id=\"id_872318156\">Sea&#39;s second-quarter earnings miss</h3><p>Sea Ltd (NYSE:SE)&#39;s stock shed more than a quarter of its market value on the morning of August 15th after its second-quarter earnings report was publically disseminated. The stock has not recovered since then, remaining at a similar price level ever since, suggesting the market is net bearish on the asset and that post-earnings trading probably wasn&#39;t an overreaction.</p><p>It is unclear why Sea Ltd (NYSE:SE)&#39;s stock dropped. For example, the firm passed its earnings estimate by eight cents per share. Sure, Sea&#39;s second-quarter revenue fell short by $152.14 million; however, the firm still experienced 5.2% year-on-year growth during a trying economic period.</p><h4 id=\"id_3039364011\">Dissecting Sea Ltd&#39;s Second-Quarter Results</h4><p>Let&#39;s dissect Sea Ltd (NYSE:SE)&#39;s second-quarter results.</p><p>Sea reported a second-quarter gross profit of $1.5 billion, a 33.1% increase. Moreover, the firm turned a profit of $331 million, a significant contrast to its 2022 second-quarter loss of $931.2 million.</p><p>Much of the company&#39;s growth stemmed from its &#34;Digital Financial Services&#34; segment, as the unit achieved $427.9 million in quarterly revenue, displaying year-on-year growth worth 53.4%.</p><p>Furthermore, although Sea Ltd&#39;s second-quarter digital entertainment revenue receded by 1.9% year-on-year, its e-commerce sales remained robust, tabling 20.6% in year-over-year growth to achieve $2.1 billion in revenue.</p><p>In essence, earnings results-driven Sea Ltd&#39;s sell-off seems overcooked, especially when considering how the firm&#39;s quarterly results stack up against other firms&#39; in today&#39;s trying economy.</p><h3 id=\"id_2885888596\">Key drivers</h3><p>As mentioned earlier in the article, Sea Ltd is participating in an industry that is set to grow at a compound annual growth rate of 11.70% until 2027. In addition, and as illustrated in the diagram below, Singapore&#39;s economic trend growth is forecasted to stay above 2% per year until 2028, providing an additional tailwind to Sea Ltd (NYSE:SE), especially as much of the economic growth is forecasted to stem from developments within the technology sector.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ee33c273ffa6987c540a32c4bf110af1\" alt=\"Source: Statista\" title=\"Source: Statista\" tg-width=\"1364\" tg-height=\"866\"/><span>Source: Statista</span></p><p>Another factor to consider is Sea Ltd (NYSE:SE)&#39;s potential to achieve synergetic growth. For instance, the company&#39;s e-commerce and digital financial services could coalesce and create cost-cutting paired with cross-sales synergies. Although Alicia Yap of Citigroup Inc (NYSE:C) argues that Sea&#39;s market share will be tested, I believe we should consider that few regional consumer technology firms have established the level of synergies that Sea has.</p><h3 id=\"id_3947784163\">Valuation</h3><p>A collective assessment of Sea Ltd (NYSE:SE)&#39;s valuation metrics paints a worrisome picture. Firstly, the stock&#39;s price-to-sales ratio of 1.72 ranks within the 32nd industry percentile, suggesting a relative value mismatch. On top of that, Sea&#39;s earnings yield of 2.17% is unconvincing for a growth stock.</p><p>Many might wonder why I outlined the stock&#39;s price-to-sales and earnings yield, in particular.</p><p>Well, the rationale behind it is to consider that Sea Ltd (NYSE:SE) is a growth stock, in which case, profitability metrics such as the price-to-earnings and price-to-book provide little input; In fact, a top-line observation or growth metrics such as the earnings yield provide far better insight.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/589547d4411dae651796966fc6eaa0b4\" tg-width=\"886\" tg-height=\"470\"/></p><h3 id=\"id_3881665855\">Final word</h3><p>The negative outlook on Sea Ltd (NYSE:SE) from Wall Street analysts and investors can be contested by observing the finer details of the firm&#39;s results. Despite Sea&#39;s worrisome valuation metrics, its stock&#39;s recent sell-off seems unjustified, especially given the aforementioned coupled with the synergies embedded into its business model.</p></body></html>","source":"lsy1605318755435","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is Sea Limited's Recent Slump Warranted?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs Sea Limited's Recent Slump Warranted?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-23 14:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore-based technology firm, Sea Ltd faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates ...</p>\n\n<a href=\"https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2361643366","content_text":"Singapore-based technology firm, Sea Ltd faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd (NYSE:SE)'s salient variables.Herewith are a few aspects to consider.Details of the bearish calls from Wall StreetSea Ltd experienced two noticeable downgrades from Wall Street after its second-quarter earnings release. The first downgrade was from Citigroup Inc (NYSE:C), based on a top-down vantage point.Citigroup Inc's Alicia Yap adjusted Sea Ltd (NYSE:SE)'s target price to $50 per share from a previous $98, citing that Sea's battle to maintain its market share is starting. In my view, Yap's analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore's consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap's take.Further Analyst DowngradesFurther, JPMorgan Chase & Co analyst, Ranjan Sharma downgraded Sea Ltd's stock to neutral from overweight and assigned a price target of $45.According to Sharma: \"SE's decision to accelerate e-commerce investments in growth is likely to materially weigh on its earnings and share price in the near term,\" he added that \"SE could potentially incur heavy investments in 2H23 resulting in earnings decline in [the second-half].\"Sharma's argument is somewhat questionable. I say this because although the stock market tends to price structural earnings slumps, it typically does not consider short-term re-investment-driven cost restructurings disadvantageous. Nevertheless, JPMorgan Chase & Co (NYSE:JPM)'s outlook might have a significant impact on the market, regardless of the ground truth.Sea's second-quarter earnings missSea Ltd (NYSE:SE)'s stock shed more than a quarter of its market value on the morning of August 15th after its second-quarter earnings report was publically disseminated. The stock has not recovered since then, remaining at a similar price level ever since, suggesting the market is net bearish on the asset and that post-earnings trading probably wasn't an overreaction.It is unclear why Sea Ltd (NYSE:SE)'s stock dropped. For example, the firm passed its earnings estimate by eight cents per share. Sure, Sea's second-quarter revenue fell short by $152.14 million; however, the firm still experienced 5.2% year-on-year growth during a trying economic period.Dissecting Sea Ltd's Second-Quarter ResultsLet's dissect Sea Ltd (NYSE:SE)'s second-quarter results.Sea reported a second-quarter gross profit of $1.5 billion, a 33.1% increase. Moreover, the firm turned a profit of $331 million, a significant contrast to its 2022 second-quarter loss of $931.2 million.Much of the company's growth stemmed from its \"Digital Financial Services\" segment, as the unit achieved $427.9 million in quarterly revenue, displaying year-on-year growth worth 53.4%.Furthermore, although Sea Ltd's second-quarter digital entertainment revenue receded by 1.9% year-on-year, its e-commerce sales remained robust, tabling 20.6% in year-over-year growth to achieve $2.1 billion in revenue.In essence, earnings results-driven Sea Ltd's sell-off seems overcooked, especially when considering how the firm's quarterly results stack up against other firms' in today's trying economy.Key driversAs mentioned earlier in the article, Sea Ltd is participating in an industry that is set to grow at a compound annual growth rate of 11.70% until 2027. In addition, and as illustrated in the diagram below, Singapore's economic trend growth is forecasted to stay above 2% per year until 2028, providing an additional tailwind to Sea Ltd (NYSE:SE), especially as much of the economic growth is forecasted to stem from developments within the technology sector.Source: StatistaAnother factor to consider is Sea Ltd (NYSE:SE)'s potential to achieve synergetic growth. For instance, the company's e-commerce and digital financial services could coalesce and create cost-cutting paired with cross-sales synergies. Although Alicia Yap of Citigroup Inc (NYSE:C) argues that Sea's market share will be tested, I believe we should consider that few regional consumer technology firms have established the level of synergies that Sea has.ValuationA collective assessment of Sea Ltd (NYSE:SE)'s valuation metrics paints a worrisome picture. Firstly, the stock's price-to-sales ratio of 1.72 ranks within the 32nd industry percentile, suggesting a relative value mismatch. On top of that, Sea's earnings yield of 2.17% is unconvincing for a growth stock.Many might wonder why I outlined the stock's price-to-sales and earnings yield, in particular.Well, the rationale behind it is to consider that Sea Ltd (NYSE:SE) is a growth stock, in which case, profitability metrics such as the price-to-earnings and price-to-book provide little input; In fact, a top-line observation or growth metrics such as the earnings yield provide far better insight.Final wordThe negative outlook on Sea Ltd (NYSE:SE) from Wall Street analysts and investors can be contested by observing the finer details of the firm's results. Despite Sea's worrisome valuation metrics, its stock's recent sell-off seems unjustified, especially given the aforementioned coupled with the synergies embedded into its business model.","news_type":1},"isVote":1,"tweetType":1,"viewCount":106,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9943489523,"gmtCreate":1679631388163,"gmtModify":1679631391642,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Great to see&nbsp;","listText":"Great to see&nbsp;","text":"Great to see","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9943489523","repostId":"1151963221","repostType":2,"repost":{"id":"1151963221","weMediaInfo":{"introduction":"Providing stock market headlines, business news, financials and earnings ","home_visible":1,"media_name":"Tiger Newspress","id":"1079075236","head_image":"https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba"},"pubTimestamp":1679580890,"share":"https://ttm.financial/m/news/1151963221?lang=&edition=fundamental","pubTime":"2023-03-23 22:14","market":"us","language":"en","title":"Sea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength","url":"https://stock-news.laohu8.com/highlight/detail?id=1151963221","media":"Tiger Newspress","summary":"Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised","content":"<html><head></head><body><p>Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates &#34;materially&#34; on the Singapore tech giant, due in part to continued e-commerce gains.</p><p><img src=\"https://static.tigerbbs.com/bfdabe7c5768da9a40df7c9f73330bc4\" tg-width=\"824\" tg-height=\"618\" referrerpolicy=\"no-referrer\"/></p><p>Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.</p><p>&#34;E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,&#34; Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.</p><p>&#34;Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,&#34; Garre added.</p><p>Concerning the company&#39;s gaming initiatives, Garre expects that to &#34;scale down&#34; but potentially offer &#34;option value for the future,&#34; while its financial technology segment is starting to improve its profitability.</p><p>Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1079075236\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Tiger Newspress </p>\n<p class=\"h-time\">2023-03-23 22:14</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates &#34;materially&#34; on the Singapore tech giant, due in part to continued e-commerce gains.</p><p><img src=\"https://static.tigerbbs.com/bfdabe7c5768da9a40df7c9f73330bc4\" tg-width=\"824\" tg-height=\"618\" referrerpolicy=\"no-referrer\"/></p><p>Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.</p><p>&#34;E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,&#34; Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.</p><p>&#34;Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,&#34; Garre added.</p><p>Concerning the company&#39;s gaming initiatives, Garre expects that to &#34;scale down&#34; but potentially offer &#34;option value for the future,&#34; while its financial technology segment is starting to improve its profitability.</p><p>Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1151963221","content_text":"Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates \"materially\" on the Singapore tech giant, due in part to continued e-commerce gains.Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.\"E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,\" Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.\"Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,\" Garre added.Concerning the company's gaming initiatives, Garre expects that to \"scale down\" but potentially offer \"option value for the future,\" while its financial technology segment is starting to improve its profitability.Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.","news_type":1},"isVote":1,"tweetType":1,"viewCount":313,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9949335262,"gmtCreate":1678353751256,"gmtModify":1678353755238,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good 👍🏻&nbsp;","listText":"Good 👍🏻&nbsp;","text":"Good 👍🏻","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949335262","repostId":"1190963246","repostType":2,"repost":{"id":"1190963246","pubTimestamp":1678334339,"share":"https://ttm.financial/m/news/1190963246?lang=&edition=fundamental","pubTime":"2023-03-09 11:58","market":"us","language":"en","title":"Sea Limited Just Pulled Off a Minor Miracle: Time to Buy?","url":"https://stock-news.laohu8.com/highlight/detail?id=1190963246","media":"Motley Fool","summary":"Sea Limited posted a surprise net profit in the fourth quarter, a shocking turnaround from a year ago.","content":"<html><head></head><body><h2>KEY POINTS</h2><ul><li>Sea was surprisingly profitable in the fourth quarter.</li><li>Even more surprising, it was profitable across each of its three segments.</li><li>Sustainably profitable growth could enable Sea&#39;s stock to continue rising, even after this year&#39;s big gains.</li></ul><p>Southeast Asia&#39;s video game, e-commerce, and digital finance platform <b>Sea Limited</b> was perhaps the poster child for the pandemic. With the underpenetration of e-commerce and digitization in the region heading into the pandemic, Sea&#39;s growth absolutely exploded in 2020 and 2021, sending shares as high as $372 in late 2021.</p><p>Yet a violent reversal of pandemic trends and high inflation decimated pandemic winners, and Sea&#39;s stock plummeted almost 90% to a low of $40.66 last year.</p><p>In response to the changing landscape, Sea&#39;s management also reversed strategies, from a focus on top-line growth to an extreme focus on profitability. On the company&#39;s recent fourth-quarter release, that change of strategy yielded remarkable results -- a highly encouraging development for shareholders.</p><h2>Now profitable across all three segments</h2><p>Prior to last year, Sea only had one profitable business: its Garena video game segment. In the pandemic and pre-pandemic years, Sea used those profits to fund the build-out of its Shopee e-commerce platform and its SeaMoney digital financial services platform. Both of those businesses took lots of capital to build, and each of those segments regularly inked eye-popping losses in the hundreds of millions of dollars per quarter.</p><p>However, in the company&#39;s recent fourth-quarter 2022 release, not only did the company report operating profits and free cash flow at the overall company level, but each of those three segments is now profitable in its own right.</p><table><thead><tr><th><p>METRIC</p></th><th><p><b>DIGITAL ENTERTAINMENT</b></p></th><th><p><b>E-COMMERCE</b></p></th><th><p><b>DIGITAL FINANCIAL SERVICES</b></p></th><th><p><b>OTHER SERVICES</b></p></th><th><p><b>UNALLOCATED EXPENSES</b></p></th><th><p><b>TOTAL</b></p></th></tr></thead><tbody><tr><td><p>Q4 2021 revenue (millions)</p></td><td><p>$1,415.0</p></td><td><p>$1,595.1</p></td><td><p>$197.5</p></td><td><p>$14.5</p></td><td><p>N/A</p></td><td><p>$3,222.1</p></td></tr><tr><td><p>Q4 2021 operating profit (millions)</p></td><td><p>$858.8</p></td><td><p>($941.0)</p></td><td><p>($157.6)</p></td><td><p>($59.1)</p></td><td><p>(143.1)</p></td><td><p>(442.1)</p></td></tr><tr><td><p>Q4 2022 revenue (millions)</p></td><td><p>$948.9</p></td><td><p>$2,102.7</p></td><td><p>$380.2</p></td><td><p>$19.8</p></td><td><p>N/A</p></td><td><p>$3,451.6</p></td></tr><tr><td><p>Q4 2022 operating profit (millions)</p></td><td><p>$400.2</p></td><td><p>$109.5</p></td><td><p>$61.8</p></td><td><p>($28.7)</p></td><td><p>($199.9)</p></td><td><p>$342.9</p></td></tr></tbody></table><p>DATA SOURCE: SEA LIMITED Q4 EARNINGS RELEASE.</p><p>As you can see, Sea managed to grow operating profit by $785 million relative to the year-ago quarter, even as it only increased revenue by $229.5 million. And the profit gains are even more shocking when one considers operating profit from the digital entertainment segment<i>dropped</i>by $458 million in that time. That means between Shopee and Sea Money, Sea was able to grow profits by over $1.2 billion -- more than revenue grew across those two segments.</p><p>At the beginning of 2022, Sea had promised Shopee would generate positive adjustedEBITDAbefore headquarters costs by the fourth quarter of this year, but fourth-quarter results far exceeded those goals, generating not just EBITDA, but also operating profit. That&#39;s why the stock surged more than 20% on Tuesday, defying the overall market&#39;s 1.5% drop that day.</p><h2>But the story gets even better</h2><p>Not only did operating profits flip to positive territory across each of Sea&#39;s main segments, but the company also appears to have been free-cash-flow-positive. While Sea hasn&#39;t released its annual report yet and didn&#39;t itemize its cash-flow statement in the release, the company did note it generated about $209.8 million in excess cash during the quarter.</p><p>Sea&#39;s cash and equivalents actually declined $401.6 million in the quarter, but that was due to another positive development: Management repurchased some of Sea&#39;s 0.25% convertible bonds due in 2026, buying back $817.2 million of bond principal for only $611.3 million -- a 25% discount.</p><p>That&#39;s like borrowing $100 and only paying back $75 -- essentially, getting paid to borrow.</p><p>Obviously, Sea had the benefit of some very fortunate timing, as it issued the convertible bonds in September 2021, near the very top of the market. In the fourth quarter, Sea bought some of the bonds back at the bottom -- a near-perfect bit of selling high and buying low.</p><p>While there was certainly some luck behind that, this episode shows that management not only has savvy operational expertise, but also financial markets insight -- an uncommon combination for a tech company.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c432718412f9a053a4fb5cf485b10a36\" tg-width=\"2000\" tg-height=\"1333\" width=\"100%\" height=\"auto\"/><span>IMAGE SOURCE: GETTY IMAGES.</span></p><p>How the company did it</p><p>When asked about the remarkable turn to profitability on the earnings call, CEO Forrest Li said: &#34;There&#39;s a lot of hard work, and we make sacrifices. We exited the markets, we downsized operations, we walked through all these initiatives to decide which is core, which is less core, what we need to prioritize and what we need to deprioritize.&#34;</p><h2>Looking further under the hood, three main tactics stood out:</h2><p>First, Sea raised prices to sellers on its Shopee marketplace, or its &#34;take rate,&#34; and was also helped by increased high-margin advertising revenue. Revenue for Shopee surged 31.8%, with core marketplace revenue outside of first-party sales up an even higher 43.5%. That high revenue growth came even while gross merchandise volume (GMV) actually <i>declined</i> 1%, although GMV rose 7.7% in constant currency.</p><p>While some may scoff that last quarter&#39;s growth came mostly from raising prices, remember, the sign of a good business is that it can raise prices without meaningfully losing customers. Sea seems to fit that description.</p><p>And even that muted GMV growth was impressive in light of sales and marketing expenses declining a stunning 55% for Shopee and 61% at the overall company level. So, the fact that Shopee could still grow GMV on a constant currency basis while cutting marketing expenses by more than half says something about its brand presence across its core markets.</p><p>Finally, management also pointed to meaningful logistics cost savings, without going into too much detail. While the company doesn&#39;t break out gross profit growth specifically for Shopee, the company did grow overall gross profit 29.5%, much higher than overall revenue growth of 7.1%.</p><p>Not only did Sea improve logistics costs per package in the quarter, but Li added there is even more room to improve, saying: &#34;[T]his will remain an important area of focus going forward. ... While we have already seen early results from these efforts, there is still greater room for improvement.&#34;</p><h2>Growing revenue in spite of cost cuts is what this market wants to see</h2><p>All in all, Sea was able to raise prices while cutting logistics and marketing costs, and still maintained GMV growth on a constant currency basis. Moreover, management paid off some debt at a big discount, further lowering risk.</p><p>This is awfully impressive, and bodes well for Sea&#39;s stock -- even after Tuesday&#39;s big jump.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited Just Pulled Off a Minor Miracle: Time to Buy?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited Just Pulled Off a Minor Miracle: Time to Buy?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-09 11:58 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KEY POINTSSea was surprisingly profitable in the fourth quarter.Even more surprising, it was profitable across each of its three segments.Sustainably profitable growth could enable Sea's stock to ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190963246","content_text":"KEY POINTSSea was surprisingly profitable in the fourth quarter.Even more surprising, it was profitable across each of its three segments.Sustainably profitable growth could enable Sea's stock to continue rising, even after this year's big gains.Southeast Asia's video game, e-commerce, and digital finance platform Sea Limited was perhaps the poster child for the pandemic. With the underpenetration of e-commerce and digitization in the region heading into the pandemic, Sea's growth absolutely exploded in 2020 and 2021, sending shares as high as $372 in late 2021.Yet a violent reversal of pandemic trends and high inflation decimated pandemic winners, and Sea's stock plummeted almost 90% to a low of $40.66 last year.In response to the changing landscape, Sea's management also reversed strategies, from a focus on top-line growth to an extreme focus on profitability. On the company's recent fourth-quarter release, that change of strategy yielded remarkable results -- a highly encouraging development for shareholders.Now profitable across all three segmentsPrior to last year, Sea only had one profitable business: its Garena video game segment. In the pandemic and pre-pandemic years, Sea used those profits to fund the build-out of its Shopee e-commerce platform and its SeaMoney digital financial services platform. Both of those businesses took lots of capital to build, and each of those segments regularly inked eye-popping losses in the hundreds of millions of dollars per quarter.However, in the company's recent fourth-quarter 2022 release, not only did the company report operating profits and free cash flow at the overall company level, but each of those three segments is now profitable in its own right.METRICDIGITAL ENTERTAINMENTE-COMMERCEDIGITAL FINANCIAL SERVICESOTHER SERVICESUNALLOCATED EXPENSESTOTALQ4 2021 revenue (millions)$1,415.0$1,595.1$197.5$14.5N/A$3,222.1Q4 2021 operating profit (millions)$858.8($941.0)($157.6)($59.1)(143.1)(442.1)Q4 2022 revenue (millions)$948.9$2,102.7$380.2$19.8N/A$3,451.6Q4 2022 operating profit (millions)$400.2$109.5$61.8($28.7)($199.9)$342.9DATA SOURCE: SEA LIMITED Q4 EARNINGS RELEASE.As you can see, Sea managed to grow operating profit by $785 million relative to the year-ago quarter, even as it only increased revenue by $229.5 million. And the profit gains are even more shocking when one considers operating profit from the digital entertainment segmentdroppedby $458 million in that time. That means between Shopee and Sea Money, Sea was able to grow profits by over $1.2 billion -- more than revenue grew across those two segments.At the beginning of 2022, Sea had promised Shopee would generate positive adjustedEBITDAbefore headquarters costs by the fourth quarter of this year, but fourth-quarter results far exceeded those goals, generating not just EBITDA, but also operating profit. That's why the stock surged more than 20% on Tuesday, defying the overall market's 1.5% drop that day.But the story gets even betterNot only did operating profits flip to positive territory across each of Sea's main segments, but the company also appears to have been free-cash-flow-positive. While Sea hasn't released its annual report yet and didn't itemize its cash-flow statement in the release, the company did note it generated about $209.8 million in excess cash during the quarter.Sea's cash and equivalents actually declined $401.6 million in the quarter, but that was due to another positive development: Management repurchased some of Sea's 0.25% convertible bonds due in 2026, buying back $817.2 million of bond principal for only $611.3 million -- a 25% discount.That's like borrowing $100 and only paying back $75 -- essentially, getting paid to borrow.Obviously, Sea had the benefit of some very fortunate timing, as it issued the convertible bonds in September 2021, near the very top of the market. In the fourth quarter, Sea bought some of the bonds back at the bottom -- a near-perfect bit of selling high and buying low.While there was certainly some luck behind that, this episode shows that management not only has savvy operational expertise, but also financial markets insight -- an uncommon combination for a tech company.IMAGE SOURCE: GETTY IMAGES.How the company did itWhen asked about the remarkable turn to profitability on the earnings call, CEO Forrest Li said: \"There's a lot of hard work, and we make sacrifices. We exited the markets, we downsized operations, we walked through all these initiatives to decide which is core, which is less core, what we need to prioritize and what we need to deprioritize.\"Looking further under the hood, three main tactics stood out:First, Sea raised prices to sellers on its Shopee marketplace, or its \"take rate,\" and was also helped by increased high-margin advertising revenue. Revenue for Shopee surged 31.8%, with core marketplace revenue outside of first-party sales up an even higher 43.5%. That high revenue growth came even while gross merchandise volume (GMV) actually declined 1%, although GMV rose 7.7% in constant currency.While some may scoff that last quarter's growth came mostly from raising prices, remember, the sign of a good business is that it can raise prices without meaningfully losing customers. Sea seems to fit that description.And even that muted GMV growth was impressive in light of sales and marketing expenses declining a stunning 55% for Shopee and 61% at the overall company level. So, the fact that Shopee could still grow GMV on a constant currency basis while cutting marketing expenses by more than half says something about its brand presence across its core markets.Finally, management also pointed to meaningful logistics cost savings, without going into too much detail. While the company doesn't break out gross profit growth specifically for Shopee, the company did grow overall gross profit 29.5%, much higher than overall revenue growth of 7.1%.Not only did Sea improve logistics costs per package in the quarter, but Li added there is even more room to improve, saying: \"[T]his will remain an important area of focus going forward. ... While we have already seen early results from these efforts, there is still greater room for improvement.\"Growing revenue in spite of cost cuts is what this market wants to seeAll in all, Sea was able to raise prices while cutting logistics and marketing costs, and still maintained GMV growth on a constant currency basis. Moreover, management paid off some debt at a big discount, further lowering risk.This is awfully impressive, and bodes well for Sea's stock -- even after Tuesday's big jump.","news_type":1},"isVote":1,"tweetType":1,"viewCount":289,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9949017793,"gmtCreate":1678237797313,"gmtModify":1678237801446,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"👍🏻💐","listText":"👍🏻💐","text":"👍🏻💐","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949017793","repostId":"1164379039","repostType":4,"repost":{"id":"1164379039","pubTimestamp":1678234215,"share":"https://ttm.financial/m/news/1164379039?lang=&edition=fundamental","pubTime":"2023-03-08 08:10","market":"sg","language":"en","title":"Sea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce","url":"https://stock-news.laohu8.com/highlight/detail?id=1164379039","media":"Seeking Alpha","summary":"Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourt","content":"<html><head></head><body><p>Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p><p><img src=\"https://static.tigerbbs.com/eb56c7a379a006b590b127de2b147c05\" tg-width=\"840\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>For the period ending December 31, Sea (SE) earned an adjusted 72 cents per share as revenue rose 7.1% year-over-year to $3.45B. Analysts were expecting a loss of 55 cents per share on $3.05B in revenue.</p><p>Included in the figure was $2.1B in revenue from its e-commerce division, a rise of 31.8% year-over-year, as consumer continued to flock to its Shopee platform.</p><p>The company also generated $948.9M in revenue from digital entertainment in the period, up from $892.9M in the year-ago period, while revenue attributed to digital financial services soared 92.5% year-over-year to $380.2M.</p><p>In a statement, Forrest Li, Sea&#39;s (SE) Chairman and CEO said the company is &#34;closely monitoring&#34; the global economic uncertainty, but the company looks well positioned to compete.</p><p>&#34;Given the macro uncertainty and our recent strong pivot, we are closely monitoring the market environment and we will continue to adjust our pace and fine-tune our operations accordingly,&#34; Li said. &#34;While there may be near-term fluctuations in our performance, we remain highly confident in the long-term growth potential of our markets and fully focused on capturing this opportunity.&#34;</p><p>Last month, Duquesne Family Office, the hedge fund owned by billionaire Stanley Druckenmiller, disclosed that it had exited its position in Sea Ltd. (SE) during the fourth-quarter, while making several other changes to its portfolio.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-08 08:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit....</p>\n\n<a href=\"https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1164379039","content_text":"Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.For the period ending December 31, Sea (SE) earned an adjusted 72 cents per share as revenue rose 7.1% year-over-year to $3.45B. Analysts were expecting a loss of 55 cents per share on $3.05B in revenue.Included in the figure was $2.1B in revenue from its e-commerce division, a rise of 31.8% year-over-year, as consumer continued to flock to its Shopee platform.The company also generated $948.9M in revenue from digital entertainment in the period, up from $892.9M in the year-ago period, while revenue attributed to digital financial services soared 92.5% year-over-year to $380.2M.In a statement, Forrest Li, Sea's (SE) Chairman and CEO said the company is \"closely monitoring\" the global economic uncertainty, but the company looks well positioned to compete.\"Given the macro uncertainty and our recent strong pivot, we are closely monitoring the market environment and we will continue to adjust our pace and fine-tune our operations accordingly,\" Li said. \"While there may be near-term fluctuations in our performance, we remain highly confident in the long-term growth potential of our markets and fully focused on capturing this opportunity.\"Last month, Duquesne Family Office, the hedge fund owned by billionaire Stanley Druckenmiller, disclosed that it had exited its position in Sea Ltd. (SE) during the fourth-quarter, while making several other changes to its portfolio.","news_type":1},"isVote":1,"tweetType":1,"viewCount":186,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9957020763,"gmtCreate":1676791168453,"gmtModify":1676791173217,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good.. ageed on this","listText":"Good.. ageed on this","text":"Good.. ageed on this","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9957020763","repostId":"1188995761","repostType":4,"repost":{"id":"1188995761","pubTimestamp":1676771503,"share":"https://ttm.financial/m/news/1188995761?lang=&edition=fundamental","pubTime":"2023-02-19 09:51","market":"us","language":"en","title":"Sea Limited: Best Contrarian Opportunity For The E-Commerce Leader","url":"https://stock-news.laohu8.com/highlight/detail?id=1188995761","media":"Seeking Alpha","summary":"SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea L","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>The contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited&#39;s e-commerce business, Shopee.</li><li>Shopee continues to bring solid market share in its core regions as a result of strong value propositions to customers and sellers.</li><li>Shopee has been gaining market share at the expense of competitors, bringing increasing scale and better unit economics to Shopee.</li><li>The company has been focused on profitability and long-term sustainability of the business, driving improvements in margins and accelerating its path to profitability.</li><li>My 1-year target price for Sea Limited is $94.51 based on a sum of the parts valuation model. This implies 41% upside from current levels.</li></ul><p><b>Investment thesis</b></p><p>With misunderstanding and uncertainty comes opportunity.</p><p>I think that Sea Limited&#39;s (NYSE: SE) valuation reflects uncertainty. Based on the consensus estimates on Bloomberg, Sea Limited is now trading at 45x FY2024 EBITDA. This is for a company with leading positions in gaming, e-commerce and fintech in the markets that it operates in. This is for a company that is lazer focused on cost cutting and turning EBITDA positive on its e-commerce business. This is for a company that is still expected to grow at a double-digit revenue growth in the medium to longer term.</p><p>I don&#39;t think that investors are pricing in the full potential for Sea Limited&#39;s e-commerce business, Shopee. Its e-commerce arm continues to remain the leader in its core markets and has captured top mind share in customers in the region as a result of its strong value proposition to customers. In addition, Shopee&#39;s competitors in the region, as analyzed below, are not as competitive as Shopee continues to gain market share in the region.</p><p>In an earlier deep dive article into Sea Limited, I shared with members of Outperforming the Market about the huge opportunities the three segments of the company (Garena, Shopee and SeaMoney) will bring in the long-term and how the company&#39;s beaten down stock has reached a valuation that makes sense for investors to enter today. While addressing the members questions on Sea Limited, I realized that there were many misconceptions and interest in Sea Limited&#39;s Shopee. As such, in this article, I aim to share with readers more about the fundamentals of Shopee, how it compares with local competitors in the market and what Shopee&#39;s future looks like.</p><p>I have written earlier Sea Limited articles, where I share my deep dive research into Garenahere, and why Sea Limited&#39;s Garena and SeaMoney are valued at zero at current valuations here.</p><p><b>Deep dive into e-commerce (Shopee)Brief introduction and history of Shopee</b></p><p>As shared earlier, Shopee is Sea Limited&#39;s e-commerce platform. The history of Shopee is relatively short given that it was first launched in Southeast Asia and Taiwan in 2015. The e-commerce platform then made its way into Brazil in 2019. Subsequently, the company even expanded its Shopee platform to new markets in Latin America like Mexico, Chile and Colombia and to Poland and Spain as well. However, the core Shopee markets today are Southeast Asia and Taiwan, as well as Brazil, as Shopee exited markets which it deemed unprofitable in 2022 to preserve capital as the market conditions started to change. This will be discussed further in a later section in this article.</p><p><b>Shopee&#39;s business model</b></p><p>Shopee was one of the first few e-commerce players in Southeast Asia in the early days of its operating history in 2015 and gradually emerged as a leading player in the region as a result of a strong value add to both customers and sellers.</p><p><b>Value proposition for customers</b></p><p>The first value proposition, and a relatively simple one, was that Shopee&#39;s approach of gamifying the experience of e-commerce and online shopping brought a social element to the e-commerce platform that others were unable to replicate. By having customers win coupons, play games to win rewards and get rewards for logging in daily, the platform was able to build a strong social element and it became not just a platform to these customers, but also a good experience. As a result of gamifying the experience of shopping online, the company actually managed to bring greater traffic to its platform, increase user engagement and it resulted in more e-commerce sales and larger basket sizes.</p><p>The second value proposition is equally important as customers are ultimately finding the lowest prices for goods they wish to buy and the best discounts available in the market. As a result of promotional and marketing events like the 12.12 sale, customers can get outsized deals and cashbacks through shopping on Shopee.</p><p>The third value proposition is that customers, as buyers on the e-commerce platform are protected and the platform is secure. It was very important in the early days of Shopee to demonstrate that it could provide a secure and safe shopping environment for buyers. Especially in the early days when not everything was bought online or not everyone has had the experience of using an e-commerce platform, there was a need to assure buyers that the sellers are legitimate, their goods are as advertised and that there are no frauds or misrepresentation on Shopee. Features on Shopee like seller verification helped to make sure that the sellers on the Shopee platform have been verified and are subject to certain terms and conditions on signing up to be a seller. In addition, Shopee does an automated screen based on the product categories, names and descriptions to identify inappropriate or illegal items and the listings that are deemed to be inappropriate or high risk are removed from the platform until cleared by the teams in Shopee. There are other features like Shopee Guarantee, which holds payments made by buyers until the ordered products have been deemed received by the buyer. This will certainly help reduce settlement risk as buyers can then be assured that their payment will only go through if they receive the items that they have bought. Lastly, if all else fails, Shopee has a decent dispute resolution team that helps to ensure that buyers or sellers can have a proper way to resolve disputes and seek compensation if necessary.</p><p>The fourth value proposition is a subtle one, but Shopee is centered around mobile devices, and enabled e-commerce shopping to be done on the go. This is pertinent as customers were increasingly moving from the PC to their mobile devices as customers started using their mobile devices for more and more applications.</p><p>Last but not least, the final value proposition that makes customers like Shopee is the strong payment and logistics infrastructure that enables seamless payment and quick and reliable deliveries. For Shopee payments, as highlighted above, they are protected by Shopee Guarantee, which will ensure that buyers get their items before the payment goes through to sellers. In terms of payment types, there are a wide variety of payment options, including credit cards, bank transfers or mobile wallet services. Most of the transactions on Shopee have been integrated with the Shopee Pay, which is SeaMoney&#39;s payment infrastructure, and this is the case for most of its core markets. For Shopee, developing the key logistics infrastructure was key to developing e-commerce in Southeast Asia and Taiwan as these are markets with difficult to access terrain and underdeveloped infrastructure. Shopee works with the largest and most reliable logistics service providers in its respective markets and are usually able to get lower rates and better terms with these logistics service providers as a result of Shopee&#39;s large scale of transactions. The buyers and sellers are also able to track the delivery status of their purchased items, which provides added assurance for e-commerce transactions.</p><p><b>Value proposition for sellers</b></p><p>The first value proposition for sellers has to be the strong support that Shopee provides sellers. An e-commerce platform is only as good as the variety and quality of its seller base. This is likely why Shopee provides strong support to sellers as it has a large team of staff with local knowledge that provides quick and localized assistance to sellers when necessary.</p><p>The second value proposition is that Shopee provides sellers with a one-stop solution for selling needs, including an integrated payment system, logistics and fulfillment services. Although Shopee does not require its sellers to use its logistics service providers, most of its sellers choose to use them due to the good pricing and reliable service quality of these providers.</p><p>Lastly and perhaps most importantly, Shopee has a large and fast-growing user base that sellers can sell to. This is undoubtedly one of the greatest incentives for sellers as they can then have a larger market to sell to and a larger addressable market.</p><p><b>Scalability of the marketplace business model</b></p><p>Shopee has been hugely successful in scaling up as a marketplace platform for reasons highlighted above. It provided buyers with a reliable, social and fun e-commerce experience while sellers are given strong support as Shopee provides one-stop solutions for sellers. That said, the marketplace business model was the key in ensuring that the business is highly scalable.</p><p>Another reason for the rapid scaling of Shopee is the social and gamification elements that enabled Shopee to acquire and retain users better, and increase their time spent on the platform.</p><p>As a result, in 2021, Shopee was the largest e-commerce platform in Southeast Asia and Taiwan, and it is also gaining traction in Brazil.</p><p><b>Success in marketing and promotional activities</b></p><p>Shopee started to increase brand awareness through its campaigns each month, like the 11.11 Big Sale and 12.12 Birthday Sale. As a result of the promotional activities on these special days in the month, buyers are likely to flock to Shopee during these special promotional events to get larger discounts and save money on their e-commerce purchases. As a result, they associate these dates with Shopee and large discounts and savings.</p><p>Success in these marketing and promotional campaigns have led to GMV and market share growth and helped increase the mind share of Shopee in the buyers in its core markets.</p><p><b>Monetization opportunities</b></p><p>As Shopee continues to grow in scale, with the sticky nature of its users due to its social and gamification features, the company can look to monetize this large Shopee user base. While the company is focused on market share growth and GMV at the moment, as the platform continues to scale, I think that we will see Shopee offer sellers paid advertising services, charge transaction-based fees and charge for more value-added services. These are some ways in which Shopee can continue to monetize the large and engaged user base that it has on the platform.</p><p><b>Expansion into new markets</b></p><p>Shopee started its operations in Southeast Asia and Taiwan and later, Brazil. In 2021, Shopee looked to expand its success beyond these markets and move to other markets, which included markets in Europe, India, and other markets in Latin America. It was not meant to be for Shopee&#39;s international expansion strategy, as I have highlighted in my Sea Limited article, as the company started exiting markets which it deems non-core to preserve capital and Shopee dipped its toes into the India market, a large market with tough competitors inMarch 2021, and with the success of Free Fire in India, saw India as a potential market for its e-commerce business. However, given the ban of Free Fire as highlighted in part 1 of my deep dive series, the company eventually realized that there were high regulatory and government risks in entering the India market. As a result, in March of 2022, the company exited India and given the relatively early stage of the operations in India and the cautious expansion in the country, there was a relatively limited impact to current Shopee business. The impact came from the loss of a large and fast-growing addressable market as a result of exiting from India.</p><p>Shopee aggressively expanded in Europe as it entered France, Spain and Poland in 2021. However, in March 2022 and June 2022, Shopee exited France and Spain respectively. As the company was in France and Spain for a relatively short period of time, during the preliminary pilot phase of operations in both countries, Shopee decided to be prudent and disciplined in expanding into new markets and only invest resources into a market which it thinks that it can compete meaningfully in the long-term.</p><p>While Shopee saw strong traction in Brazil based on data fromdata.ai, suggesting that the company is ranked first by average monthly active users in the Shopping category in Brazil, the company tried to replicate its e-commerce strategy in other Latin America markets, which resulted in expanding into Mexico, Chile and Colombia in 2021. In 2022, as a result of increasing global macro uncertainty, Shopee needed to focus its operations on core markets and decided that they will use a cross border model in Mexico, Colombia and Chile, downsizing its operations there to cross border operations.</p><p><img src=\"https://static.tigerbbs.com/7f913da39ffb41b9ffe9b7ef9a47e4af\" tg-width=\"637\" tg-height=\"264\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Shopee rationalization efforts (Author generated)</p><p>In my view, the decision to exit markets in which it has not yet had a deep and strong presence in before the turn of the tides is a good move by management as that enabled the preservation of capital in early 2022 and prevented the company from needing more money to fund expansion into new markets. In particular, the exit from India was a great one in my view as the e-commerce market in India is saturated and highly competitive, with players like Amazon (AMZN), Meesho and Flipkart competing with Shopee. The cash burn needed to make Shopee a success in India would not have been possible given the reduction of liquidity in the later part of 2022 as the capital markets started to feel the jitters of higher interest rates and the potential of a recession. I think that the ability to exit markets to ensure the long-term sustainability of the business and expand into new markets prudently gives me more confidence in the management of Shopee.</p><p><b>Shopee operational metrics</b></p><p>Shopee saw huge growth in 2021 as the pandemic helped to fuel the growth and adoption of e-commerce in Shopee&#39;s key markets. With movement restrictions and lockdowns, consumers needed to get goods and shop online. The strong growth fueled by the pandemic is likely to cause a high base effect in 2022 as consumers go back to work and school and are able to buy from brick-and-mortar stores. That said, the trend that the pandemic accelerated will likely stay in the future and the pandemic brought a net positive effect to increase the penetration of e-commerce in Shopee&#39;s key markets. As a result, in 2023, we are likely to lap that high base effect and I am of the opinion that Shopee can reaccelerate its growth in core markets and continue to increase penetration in these markets.</p><p><img src=\"https://static.tigerbbs.com/b2e62828d666baed6120d4a990fb597f\" tg-width=\"640\" tg-height=\"111\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Shopee operational metrics (Author generated)</p><p><b>Shopee competitive landscape</b></p><p>While Shopee is a leader in the Southeast Asia and Taiwan markets, there are other players vying for market share in these regions. In particular, Alibaba&#39;s (BABA) Lazada has been operating in the region since 2012. Despite its longer operating history and backing from Alibaba, the company continued to trail behind Shopee. In my opinion, this is because of the social and gaming element that Shopee has brought into its platform that brought higher user engagement and thus, it attracts and retains users on the platform better. Also, the marketing and promotional campaigns launched by Shopee seem to have created better mind share in its core markets of Southeast Asia and Taiwan at least, resulting in better performance in sales events and marketing and promotional campaigns. Lastly, the platform that is better able to provide buyers with the best discounts and savings, as well as a better user experience will ultimately have the larger active user base. As a result of efforts by Shopee to protect buyers and large discounts on the platform, Shopee has been able to obtain better mind share from customers and result in better market share in the region. This results in a fly wheel effect as the larger buyer user base attracts more sellers on the Shopee platform, which brings about better deals and more variety on the Shopee platform compared to Lazada.</p><p>In Lazada&#39;s fiscal year of 2021 ending on March 31st, the company reported revenues of $556,000, down more than65%from 2020 when it recorded $1.6 million in revenue. In 1Q21 alone, Shopee recorded revenues of$922 million.</p><p>Lazada recorded $21 billion in GMV in 2021 while Shopee recorded $63 billion GMV in 2021, implying that as of the full year of 2021, Shopee&#39;s e-commerce business seems to be almost three times larger than that of Lazada.</p><p>This goes to show the strong market share gain that Shopee has been experiencing, at the expense of Lazada, and how Shopee is able to compete and gain share in the competitive landscape.</p><p>Tokopedia is another company that competes in the e-commerce space, but with a larger focus on Indonesia. Tokopedia merged with Gojek, which resulted in the combined entity being calledGoTo Group. With the large population and fast growth profile of the Indonesia market, the threat of GoTo Group in Indonesia remains relevant. In 2021, GoTo Group recorded 6,264 billion Indonesian Rupiah in revenues, which translates to approximately $401 million in revenues for the year. This compares to the$5.2 billion in revenues that Shopee generated in 2021. As a result, Shopee is almost 13 times larger than GoTo Group&#39;s e-commerce operations. The larger scale does bring benefits like economies of scale, better unit economics and attracting more buyers and sellers to the platform. At the end of the day, Shopee needs to continue to ensure that it remains relevant and attractive in Indonesia by continuing to improve user experience and bring innovation that adds value to both buyers and sellers.</p><p>In its existing markets, as can be seen below, Shopee has a scale advantage as it is significantly larger than that of Lazada&#39;s or GoTo&#39;s revenues. This implies that Shopee&#39;s market share by revenue is at least nine times more than Lazada and Shopee&#39;s market share by revenue is almost 13 times more than GoTo Group. The competitive landscape in Shopee&#39;s core markets does seem favorable given the large-scale benefits that Shopee can enjoy with its market share in these markets. In addition, Shopee continues to be able to compete meaningfully and gain share in these markets as it looks to break even in the Southeast Asia and Taiwan markets.</p><p><img src=\"https://static.tigerbbs.com/31ed5b7f430ecb3ee0a8b18f3261a92d\" tg-width=\"640\" tg-height=\"102\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Major e-commerce companies revenues relative to Shopee (Author generated)</p><p>The global e-commerce market is becoming very competitive, in my view. The largest e-commerce player, Amazon, continues to look to expand internationally and remains a well-capitalized player with strong branding. Other players in specific markets like MercadoLibre (MELI) in Latin America and Coupang (CPNG) in South Korea are well established players in their own respective markets. As a result, international expansion for Shopee needs to be done prudently in markets in which it can compete and adds strong value to. While I think that Shopee may expand to international markets in the long-term, the near-term goal is still turning profitable, focusing on core markets and ensuring sustainability of the business.</p><p><b>Valuation</b></p><p>As highlighted before, Sea Limited is now trading at 45x FY2024 EBITDA. Considering the significant EBITDA expansion to come as a result of a leaner cost structure as a result of its cost optimization initiatives and improving economies of scale as the business grows, I think that we will likely see a very strong period of EBITDA growth in the near-term.</p><p>To value Sea Limited, I use a sum of the parts model. I assume Garena to be valued at 11x FY2024 P/E, Shopee to be valued at 3x FY 2024 P/S and SeaMoney to be valued at 4x FY2024 P/S.</p><p>My 1-year target price for Sea Limited is thus $94.51. This implies 41% upside from current levels.</p><p><b>Conclusion</b></p><p>As can be seen in the article, Shopee is a leader in e-commerce, a fundamentally growing business and one whose profitability and margin profile is improving as we speak.</p><p>While I think that there could have been some disappointments with the company pulling out of its non-core markets in which it was doing pilot trials in, I think that we are starting to lap the high base effect we saw in 2022 in the coming year in 2023. In addition, the boost in Shopee being EBITDA positive in Southeast Asia and Taiwan is certainly a boost in confidence for the company&#39;s business model. By 2025, management expects that both Shopee and SeaMoney together, will be able to generate sufficient cash to self-fund their own long-term growth.</p><p>My one-year price target for Sea Limited is thus $94.51. This implies a 41% upside from current levels.</p></body></html>","source":"seekingalpha_fund","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Best Contrarian Opportunity For The E-Commerce Leader</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Best Contrarian Opportunity For The E-Commerce Leader\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-19 09:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited's e-commerce business, Shopee.Shopee continues to bring solid market share in its core ...</p>\n\n<a href=\"https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1188995761","content_text":"SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited's e-commerce business, Shopee.Shopee continues to bring solid market share in its core regions as a result of strong value propositions to customers and sellers.Shopee has been gaining market share at the expense of competitors, bringing increasing scale and better unit economics to Shopee.The company has been focused on profitability and long-term sustainability of the business, driving improvements in margins and accelerating its path to profitability.My 1-year target price for Sea Limited is $94.51 based on a sum of the parts valuation model. This implies 41% upside from current levels.Investment thesisWith misunderstanding and uncertainty comes opportunity.I think that Sea Limited's (NYSE: SE) valuation reflects uncertainty. Based on the consensus estimates on Bloomberg, Sea Limited is now trading at 45x FY2024 EBITDA. This is for a company with leading positions in gaming, e-commerce and fintech in the markets that it operates in. This is for a company that is lazer focused on cost cutting and turning EBITDA positive on its e-commerce business. This is for a company that is still expected to grow at a double-digit revenue growth in the medium to longer term.I don't think that investors are pricing in the full potential for Sea Limited's e-commerce business, Shopee. Its e-commerce arm continues to remain the leader in its core markets and has captured top mind share in customers in the region as a result of its strong value proposition to customers. In addition, Shopee's competitors in the region, as analyzed below, are not as competitive as Shopee continues to gain market share in the region.In an earlier deep dive article into Sea Limited, I shared with members of Outperforming the Market about the huge opportunities the three segments of the company (Garena, Shopee and SeaMoney) will bring in the long-term and how the company's beaten down stock has reached a valuation that makes sense for investors to enter today. While addressing the members questions on Sea Limited, I realized that there were many misconceptions and interest in Sea Limited's Shopee. As such, in this article, I aim to share with readers more about the fundamentals of Shopee, how it compares with local competitors in the market and what Shopee's future looks like.I have written earlier Sea Limited articles, where I share my deep dive research into Garenahere, and why Sea Limited's Garena and SeaMoney are valued at zero at current valuations here.Deep dive into e-commerce (Shopee)Brief introduction and history of ShopeeAs shared earlier, Shopee is Sea Limited's e-commerce platform. The history of Shopee is relatively short given that it was first launched in Southeast Asia and Taiwan in 2015. The e-commerce platform then made its way into Brazil in 2019. Subsequently, the company even expanded its Shopee platform to new markets in Latin America like Mexico, Chile and Colombia and to Poland and Spain as well. However, the core Shopee markets today are Southeast Asia and Taiwan, as well as Brazil, as Shopee exited markets which it deemed unprofitable in 2022 to preserve capital as the market conditions started to change. This will be discussed further in a later section in this article.Shopee's business modelShopee was one of the first few e-commerce players in Southeast Asia in the early days of its operating history in 2015 and gradually emerged as a leading player in the region as a result of a strong value add to both customers and sellers.Value proposition for customersThe first value proposition, and a relatively simple one, was that Shopee's approach of gamifying the experience of e-commerce and online shopping brought a social element to the e-commerce platform that others were unable to replicate. By having customers win coupons, play games to win rewards and get rewards for logging in daily, the platform was able to build a strong social element and it became not just a platform to these customers, but also a good experience. As a result of gamifying the experience of shopping online, the company actually managed to bring greater traffic to its platform, increase user engagement and it resulted in more e-commerce sales and larger basket sizes.The second value proposition is equally important as customers are ultimately finding the lowest prices for goods they wish to buy and the best discounts available in the market. As a result of promotional and marketing events like the 12.12 sale, customers can get outsized deals and cashbacks through shopping on Shopee.The third value proposition is that customers, as buyers on the e-commerce platform are protected and the platform is secure. It was very important in the early days of Shopee to demonstrate that it could provide a secure and safe shopping environment for buyers. Especially in the early days when not everything was bought online or not everyone has had the experience of using an e-commerce platform, there was a need to assure buyers that the sellers are legitimate, their goods are as advertised and that there are no frauds or misrepresentation on Shopee. Features on Shopee like seller verification helped to make sure that the sellers on the Shopee platform have been verified and are subject to certain terms and conditions on signing up to be a seller. In addition, Shopee does an automated screen based on the product categories, names and descriptions to identify inappropriate or illegal items and the listings that are deemed to be inappropriate or high risk are removed from the platform until cleared by the teams in Shopee. There are other features like Shopee Guarantee, which holds payments made by buyers until the ordered products have been deemed received by the buyer. This will certainly help reduce settlement risk as buyers can then be assured that their payment will only go through if they receive the items that they have bought. Lastly, if all else fails, Shopee has a decent dispute resolution team that helps to ensure that buyers or sellers can have a proper way to resolve disputes and seek compensation if necessary.The fourth value proposition is a subtle one, but Shopee is centered around mobile devices, and enabled e-commerce shopping to be done on the go. This is pertinent as customers were increasingly moving from the PC to their mobile devices as customers started using their mobile devices for more and more applications.Last but not least, the final value proposition that makes customers like Shopee is the strong payment and logistics infrastructure that enables seamless payment and quick and reliable deliveries. For Shopee payments, as highlighted above, they are protected by Shopee Guarantee, which will ensure that buyers get their items before the payment goes through to sellers. In terms of payment types, there are a wide variety of payment options, including credit cards, bank transfers or mobile wallet services. Most of the transactions on Shopee have been integrated with the Shopee Pay, which is SeaMoney's payment infrastructure, and this is the case for most of its core markets. For Shopee, developing the key logistics infrastructure was key to developing e-commerce in Southeast Asia and Taiwan as these are markets with difficult to access terrain and underdeveloped infrastructure. Shopee works with the largest and most reliable logistics service providers in its respective markets and are usually able to get lower rates and better terms with these logistics service providers as a result of Shopee's large scale of transactions. The buyers and sellers are also able to track the delivery status of their purchased items, which provides added assurance for e-commerce transactions.Value proposition for sellersThe first value proposition for sellers has to be the strong support that Shopee provides sellers. An e-commerce platform is only as good as the variety and quality of its seller base. This is likely why Shopee provides strong support to sellers as it has a large team of staff with local knowledge that provides quick and localized assistance to sellers when necessary.The second value proposition is that Shopee provides sellers with a one-stop solution for selling needs, including an integrated payment system, logistics and fulfillment services. Although Shopee does not require its sellers to use its logistics service providers, most of its sellers choose to use them due to the good pricing and reliable service quality of these providers.Lastly and perhaps most importantly, Shopee has a large and fast-growing user base that sellers can sell to. This is undoubtedly one of the greatest incentives for sellers as they can then have a larger market to sell to and a larger addressable market.Scalability of the marketplace business modelShopee has been hugely successful in scaling up as a marketplace platform for reasons highlighted above. It provided buyers with a reliable, social and fun e-commerce experience while sellers are given strong support as Shopee provides one-stop solutions for sellers. That said, the marketplace business model was the key in ensuring that the business is highly scalable.Another reason for the rapid scaling of Shopee is the social and gamification elements that enabled Shopee to acquire and retain users better, and increase their time spent on the platform.As a result, in 2021, Shopee was the largest e-commerce platform in Southeast Asia and Taiwan, and it is also gaining traction in Brazil.Success in marketing and promotional activitiesShopee started to increase brand awareness through its campaigns each month, like the 11.11 Big Sale and 12.12 Birthday Sale. As a result of the promotional activities on these special days in the month, buyers are likely to flock to Shopee during these special promotional events to get larger discounts and save money on their e-commerce purchases. As a result, they associate these dates with Shopee and large discounts and savings.Success in these marketing and promotional campaigns have led to GMV and market share growth and helped increase the mind share of Shopee in the buyers in its core markets.Monetization opportunitiesAs Shopee continues to grow in scale, with the sticky nature of its users due to its social and gamification features, the company can look to monetize this large Shopee user base. While the company is focused on market share growth and GMV at the moment, as the platform continues to scale, I think that we will see Shopee offer sellers paid advertising services, charge transaction-based fees and charge for more value-added services. These are some ways in which Shopee can continue to monetize the large and engaged user base that it has on the platform.Expansion into new marketsShopee started its operations in Southeast Asia and Taiwan and later, Brazil. In 2021, Shopee looked to expand its success beyond these markets and move to other markets, which included markets in Europe, India, and other markets in Latin America. It was not meant to be for Shopee's international expansion strategy, as I have highlighted in my Sea Limited article, as the company started exiting markets which it deems non-core to preserve capital and Shopee dipped its toes into the India market, a large market with tough competitors inMarch 2021, and with the success of Free Fire in India, saw India as a potential market for its e-commerce business. However, given the ban of Free Fire as highlighted in part 1 of my deep dive series, the company eventually realized that there were high regulatory and government risks in entering the India market. As a result, in March of 2022, the company exited India and given the relatively early stage of the operations in India and the cautious expansion in the country, there was a relatively limited impact to current Shopee business. The impact came from the loss of a large and fast-growing addressable market as a result of exiting from India.Shopee aggressively expanded in Europe as it entered France, Spain and Poland in 2021. However, in March 2022 and June 2022, Shopee exited France and Spain respectively. As the company was in France and Spain for a relatively short period of time, during the preliminary pilot phase of operations in both countries, Shopee decided to be prudent and disciplined in expanding into new markets and only invest resources into a market which it thinks that it can compete meaningfully in the long-term.While Shopee saw strong traction in Brazil based on data fromdata.ai, suggesting that the company is ranked first by average monthly active users in the Shopping category in Brazil, the company tried to replicate its e-commerce strategy in other Latin America markets, which resulted in expanding into Mexico, Chile and Colombia in 2021. In 2022, as a result of increasing global macro uncertainty, Shopee needed to focus its operations on core markets and decided that they will use a cross border model in Mexico, Colombia and Chile, downsizing its operations there to cross border operations.Shopee rationalization efforts (Author generated)In my view, the decision to exit markets in which it has not yet had a deep and strong presence in before the turn of the tides is a good move by management as that enabled the preservation of capital in early 2022 and prevented the company from needing more money to fund expansion into new markets. In particular, the exit from India was a great one in my view as the e-commerce market in India is saturated and highly competitive, with players like Amazon (AMZN), Meesho and Flipkart competing with Shopee. The cash burn needed to make Shopee a success in India would not have been possible given the reduction of liquidity in the later part of 2022 as the capital markets started to feel the jitters of higher interest rates and the potential of a recession. I think that the ability to exit markets to ensure the long-term sustainability of the business and expand into new markets prudently gives me more confidence in the management of Shopee.Shopee operational metricsShopee saw huge growth in 2021 as the pandemic helped to fuel the growth and adoption of e-commerce in Shopee's key markets. With movement restrictions and lockdowns, consumers needed to get goods and shop online. The strong growth fueled by the pandemic is likely to cause a high base effect in 2022 as consumers go back to work and school and are able to buy from brick-and-mortar stores. That said, the trend that the pandemic accelerated will likely stay in the future and the pandemic brought a net positive effect to increase the penetration of e-commerce in Shopee's key markets. As a result, in 2023, we are likely to lap that high base effect and I am of the opinion that Shopee can reaccelerate its growth in core markets and continue to increase penetration in these markets.Shopee operational metrics (Author generated)Shopee competitive landscapeWhile Shopee is a leader in the Southeast Asia and Taiwan markets, there are other players vying for market share in these regions. In particular, Alibaba's (BABA) Lazada has been operating in the region since 2012. Despite its longer operating history and backing from Alibaba, the company continued to trail behind Shopee. In my opinion, this is because of the social and gaming element that Shopee has brought into its platform that brought higher user engagement and thus, it attracts and retains users on the platform better. Also, the marketing and promotional campaigns launched by Shopee seem to have created better mind share in its core markets of Southeast Asia and Taiwan at least, resulting in better performance in sales events and marketing and promotional campaigns. Lastly, the platform that is better able to provide buyers with the best discounts and savings, as well as a better user experience will ultimately have the larger active user base. As a result of efforts by Shopee to protect buyers and large discounts on the platform, Shopee has been able to obtain better mind share from customers and result in better market share in the region. This results in a fly wheel effect as the larger buyer user base attracts more sellers on the Shopee platform, which brings about better deals and more variety on the Shopee platform compared to Lazada.In Lazada's fiscal year of 2021 ending on March 31st, the company reported revenues of $556,000, down more than65%from 2020 when it recorded $1.6 million in revenue. In 1Q21 alone, Shopee recorded revenues of$922 million.Lazada recorded $21 billion in GMV in 2021 while Shopee recorded $63 billion GMV in 2021, implying that as of the full year of 2021, Shopee's e-commerce business seems to be almost three times larger than that of Lazada.This goes to show the strong market share gain that Shopee has been experiencing, at the expense of Lazada, and how Shopee is able to compete and gain share in the competitive landscape.Tokopedia is another company that competes in the e-commerce space, but with a larger focus on Indonesia. Tokopedia merged with Gojek, which resulted in the combined entity being calledGoTo Group. With the large population and fast growth profile of the Indonesia market, the threat of GoTo Group in Indonesia remains relevant. In 2021, GoTo Group recorded 6,264 billion Indonesian Rupiah in revenues, which translates to approximately $401 million in revenues for the year. This compares to the$5.2 billion in revenues that Shopee generated in 2021. As a result, Shopee is almost 13 times larger than GoTo Group's e-commerce operations. The larger scale does bring benefits like economies of scale, better unit economics and attracting more buyers and sellers to the platform. At the end of the day, Shopee needs to continue to ensure that it remains relevant and attractive in Indonesia by continuing to improve user experience and bring innovation that adds value to both buyers and sellers.In its existing markets, as can be seen below, Shopee has a scale advantage as it is significantly larger than that of Lazada's or GoTo's revenues. This implies that Shopee's market share by revenue is at least nine times more than Lazada and Shopee's market share by revenue is almost 13 times more than GoTo Group. The competitive landscape in Shopee's core markets does seem favorable given the large-scale benefits that Shopee can enjoy with its market share in these markets. In addition, Shopee continues to be able to compete meaningfully and gain share in these markets as it looks to break even in the Southeast Asia and Taiwan markets.Major e-commerce companies revenues relative to Shopee (Author generated)The global e-commerce market is becoming very competitive, in my view. The largest e-commerce player, Amazon, continues to look to expand internationally and remains a well-capitalized player with strong branding. Other players in specific markets like MercadoLibre (MELI) in Latin America and Coupang (CPNG) in South Korea are well established players in their own respective markets. As a result, international expansion for Shopee needs to be done prudently in markets in which it can compete and adds strong value to. While I think that Shopee may expand to international markets in the long-term, the near-term goal is still turning profitable, focusing on core markets and ensuring sustainability of the business.ValuationAs highlighted before, Sea Limited is now trading at 45x FY2024 EBITDA. Considering the significant EBITDA expansion to come as a result of a leaner cost structure as a result of its cost optimization initiatives and improving economies of scale as the business grows, I think that we will likely see a very strong period of EBITDA growth in the near-term.To value Sea Limited, I use a sum of the parts model. I assume Garena to be valued at 11x FY2024 P/E, Shopee to be valued at 3x FY 2024 P/S and SeaMoney to be valued at 4x FY2024 P/S.My 1-year target price for Sea Limited is thus $94.51. This implies 41% upside from current levels.ConclusionAs can be seen in the article, Shopee is a leader in e-commerce, a fundamentally growing business and one whose profitability and margin profile is improving as we speak.While I think that there could have been some disappointments with the company pulling out of its non-core markets in which it was doing pilot trials in, I think that we are starting to lap the high base effect we saw in 2022 in the coming year in 2023. In addition, the boost in Shopee being EBITDA positive in Southeast Asia and Taiwan is certainly a boost in confidence for the company's business model. By 2025, management expects that both Shopee and SeaMoney together, will be able to generate sufficient cash to self-fund their own long-term growth.My one-year price target for Sea Limited is thus $94.51. This implies a 41% upside from current levels.","news_type":1},"isVote":1,"tweetType":1,"viewCount":232,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9961196111,"gmtCreate":1668869655633,"gmtModify":1676538123143,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Super","listText":"Super","text":"Super","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9961196111","repostId":"1143890380","repostType":2,"repost":{"id":"1143890380","pubTimestamp":1668822759,"share":"https://ttm.financial/m/news/1143890380?lang=&edition=fundamental","pubTime":"2022-11-19 09:52","market":"us","language":"en","title":"Sea Limited: Profitability May Be Around The Corner","url":"https://stock-news.laohu8.com/highlight/detail?id=1143890380","media":"Seeking Alpha","summary":"SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New ga","content":"<html><head></head><body><h3>Summary</h3><ul><li>Further uncertainty for Sea Limited&#39;s Garena as its QAU did not stabilize as expected. New games were launched in recent months.</li><li>Shopee’s race to profitability has accelerated as shown in the material improvements in unit economics, and they are expected to be profitable by FY23.</li><li>SeaBank&#39;s credit business is growing strongly and its overall credit business is profitable and cash flow positive. Its revenue now makes up 10.4% of its overall revenue.</li><li>Execution has been on point in attaining profitability although that resulted in declining growth in FY22. Management believes growth can reaccelerate once it achieves profitability.</li><li>Sea Limited has sufficient cash reserves to pay off the convertible notes.</li></ul><h3>Investment Thesis</h3><p><a href=\"https://laohu8.com/S/SE\">Sea Limited</a> has come under much scrutiny in the past 2 years as the shift in focus from growth to profitability and macro headwinds have led to a massive growth decline across itsShopee and Garena units. While this is unfortunate, management has executed brilliantly so far to turn the company into an increasingly self-sufficient business in the near term.</p><p>In this article, I attempt to dive deeper into itsQ3 2022 resultand provide an overall analysis of the earnings. Although I’d like to highlight that the management has explicitly stated that growth can reaccelerate after attaining profitability and that they have a sufficient cash reserve to pay off the convertible notes sitting on the balance sheet.</p><h3>Garena<img src=\"https://static.tigerbbs.com/ab8fe0ed7909a98b7fdf0b930bc362df\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></h3><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/8386bb1c95c3d5300e1fe0f371528199\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>Garena’s QAU and QPU continued to decline sequentially, as the management’s anticipation of its user base stabilizing did not materialize. The macro headwinds continue to be a headache, and it seems that there is more uncertainty lying ahead for Garena Free Fire. The key forward is to focus on launching new games, with games such asPrimitive EraandBlack Clover Mobilelaunching recently. While this indicates that management is working hard to reaccelerate Garena’s growth, it is important to recognize that the success of games is not guaranteed, and this is the bigger uncertainty for the business. As a result, this caused its adjusted EBITDA margin to further decline to 32.5% during the quarter.</p><p>Additionally, management states that the expiry of the agreement with Riot Games will have no impact on Garena’s publishing business, and Garena is seeking other top-game developers for their publishing business.</p><p>Shopee<img src=\"https://static.tigerbbs.com/79b7f33be279fa015f52addd35b55d96\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q<img src=\"https://static.tigerbbs.com/6aaff49a0ba8c901eadda2b7cf01a391\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q</p><p>Shopee’s GMV grew 14% Y/Y and the number of orders grew 18% Y/Y, a continuous decline in the past couple of quarters. This is a result of management pulling back on its sales and marketing (“S&amp;M”) expenses, exiting multiple markets, cutting costs aggressively (such as hiring), and lastly, the lower consumer discretionary spending. This is in contrast to Lazada (NYSE: BABA), as the number oforders declined Y/Yand they are also prioritizing profitability through increased monetization.</p><p>While this does show that consumers continue to spend on Shopee in SEA, its GMV and number of orders are partially contributed by Shopee Brazil. In a tough macro environment, Shopee experienced a 36% Y/Y growth in the number of brands on the platform, indicating that Shopee is an increasingly important partner in growing its online revenue.<img src=\"https://static.tigerbbs.com/7e09e1e030c482f41afaf8695896f9ec\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q</p><p>The more important portion is Shopee’s improvement in profitability. Its overall adjusted EBITDA loss per order continues to improve by 23.5% sequentially, and more specifically, Shopee Brazil’s loss per order improved by 27.5% sequentially during the quarter as compared to 6.6% in the last quarter. Moreover, Shopee is expected to attain profitability by FY23 instead of FY25 as previously guided by the management. This goes to show that the management has made great strides in pursuing profitability, which is impressive in my view. Once it attained self-sufficiency, growth can reaccelerate, although, the management is expecting flat or negative growth in certain metrics in the near term.</p><h3>SeaBank</h3><p><i>Note that I will be using “SeaBank” and “SeaMoney” interchangeably.</i></p><p><img src=\"https://static.tigerbbs.com/0f0cb77d6ac22f50a1208eaf075db51c\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>SeaMoney’s loan receivables grew 46% from 4Q21 and 110% from 3Q21 to $2.2 billion. These are loans provided to customers whereby SeaMoney generates revenue by charging interest rates, and it has been growing quickly. In myprevious article, I showed that in Sep 2022, SeaBank Indonesia grew its loans and customer deposits by 111% Y/Y and 147% Y/Y, respectively, and the launch of ShopeePay in Brazil. During the earnings call, management stated that the credit business is profitable and cash flow positive, and it will be focusing on growing this business in Southeast Asia (“SEA”) and Brazil.</p><p>Additionally, they have also said to diversify their source of funding for the credit business, which I believe is to seek third-party financing partners to reduce the capital required for the business and at the same time, reduce credit risk. Similar to Bank Jago (IDX: ARTO), SeaBank may utilize the data of its partners to help improve the non-performing loans and scale its lending. Readers who are unaware of SeaBank’s business model can head to mydeep diveinto the company.</p><p><img src=\"https://static.tigerbbs.com/2de194897c03f180f99a0dd2b75bf2d0\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/5932cc09aca0134084217800afb30399\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/6205c82c79c753720862ed8385dd0e2a\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>As a result of its growing deposits and loan books, its Q3 2022 revenue grew 147% Y/Y, and it has been increasingly making up a bigger portion of its overall revenue at 10.4% this quarter. Management had also been deliberate in cutting down on S&amp;M expenses and combined with its acceleration revenue growth, its adjusted EBITDA margin has improved massively to -20.7% during the quarter. This is compared to -40% in 2Q22 and -120.3% a year ago.</p><h3>Sufficient Cash Reserves To Pay off Convertible Notes<img src=\"https://static.tigerbbs.com/4ff585449530fce4084e7d1447e077b4\" tg-width=\"1280\" tg-height=\"798\" referrerpolicy=\"no-referrer\"/></h3><p>SE 10-Q</p><p>One of the biggest concerns about Sea Limited for investors is the cash burn rate, as they fear that the company does not have enough sufficient cash reserves to pay off convertible notes maturing in 2026. However, not only did the cash outflow slow in Q3 2022, but the management has also hinted that there are sufficient cash reserves to pay off the convertible notes:</p><blockquote>“We aim to continue to maintain a net cash position, after budgeting for the full retirement in cash of outstanding convertible bonds and assuming no external funding.”</blockquote><h3>Conclusion</h3><p>Overall, this was a pretty decent quarter for Sea Limited, as we could see that they had made huge improvements on the road to profitability, particularly for Shopee. While that comes at a growth trade-off, management has indicated that Shopee can reaccelerate its growth after attaining profitability in FY23, which is pulled forward from FY25 as guided previously.</p><p>Garena&#39;s results continue to be a concern as macro seems to have a longer-than-expected impact on its user base and its profitability as a result has been trending downwards over the past couple of quarters. Management has been working hard on its gaming pipelines, although the uncertainty lies in the successes of these new games and whether they could reaccelerate their growth in the future.</p><p>SeaBank has been growing its top line really quickly and huge improvements were made on the bottom line as well. Furthermore, the overall credit business is profitable and is generating positive cash flow, and has been increasingly making up a larger proportion of its total revenue. I continue to believe that this can be a potential growth driver for Sea Limited.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Profitability May Be Around The Corner</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Profitability May Be Around The Corner\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-11-19 09:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New games were launched in recent months.Shopee’s race to profitability has accelerated as shown in the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1143890380","content_text":"SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New games were launched in recent months.Shopee’s race to profitability has accelerated as shown in the material improvements in unit economics, and they are expected to be profitable by FY23.SeaBank's credit business is growing strongly and its overall credit business is profitable and cash flow positive. Its revenue now makes up 10.4% of its overall revenue.Execution has been on point in attaining profitability although that resulted in declining growth in FY22. Management believes growth can reaccelerate once it achieves profitability.Sea Limited has sufficient cash reserves to pay off the convertible notes.Investment ThesisSea Limited has come under much scrutiny in the past 2 years as the shift in focus from growth to profitability and macro headwinds have led to a massive growth decline across itsShopee and Garena units. While this is unfortunate, management has executed brilliantly so far to turn the company into an increasingly self-sufficient business in the near term.In this article, I attempt to dive deeper into itsQ3 2022 resultand provide an overall analysis of the earnings. Although I’d like to highlight that the management has explicitly stated that growth can reaccelerate after attaining profitability and that they have a sufficient cash reserve to pay off the convertible notes sitting on the balance sheet.GarenaSE 10-QSE 10-QGarena’s QAU and QPU continued to decline sequentially, as the management’s anticipation of its user base stabilizing did not materialize. The macro headwinds continue to be a headache, and it seems that there is more uncertainty lying ahead for Garena Free Fire. The key forward is to focus on launching new games, with games such asPrimitive EraandBlack Clover Mobilelaunching recently. While this indicates that management is working hard to reaccelerate Garena’s growth, it is important to recognize that the success of games is not guaranteed, and this is the bigger uncertainty for the business. As a result, this caused its adjusted EBITDA margin to further decline to 32.5% during the quarter.Additionally, management states that the expiry of the agreement with Riot Games will have no impact on Garena’s publishing business, and Garena is seeking other top-game developers for their publishing business.ShopeeSE 10-QSE 10-QShopee’s GMV grew 14% Y/Y and the number of orders grew 18% Y/Y, a continuous decline in the past couple of quarters. This is a result of management pulling back on its sales and marketing (“S&M”) expenses, exiting multiple markets, cutting costs aggressively (such as hiring), and lastly, the lower consumer discretionary spending. This is in contrast to Lazada (NYSE: BABA), as the number oforders declined Y/Yand they are also prioritizing profitability through increased monetization.While this does show that consumers continue to spend on Shopee in SEA, its GMV and number of orders are partially contributed by Shopee Brazil. In a tough macro environment, Shopee experienced a 36% Y/Y growth in the number of brands on the platform, indicating that Shopee is an increasingly important partner in growing its online revenue.SE 10-QThe more important portion is Shopee’s improvement in profitability. Its overall adjusted EBITDA loss per order continues to improve by 23.5% sequentially, and more specifically, Shopee Brazil’s loss per order improved by 27.5% sequentially during the quarter as compared to 6.6% in the last quarter. Moreover, Shopee is expected to attain profitability by FY23 instead of FY25 as previously guided by the management. This goes to show that the management has made great strides in pursuing profitability, which is impressive in my view. Once it attained self-sufficiency, growth can reaccelerate, although, the management is expecting flat or negative growth in certain metrics in the near term.SeaBankNote that I will be using “SeaBank” and “SeaMoney” interchangeably.SE 10-QSeaMoney’s loan receivables grew 46% from 4Q21 and 110% from 3Q21 to $2.2 billion. These are loans provided to customers whereby SeaMoney generates revenue by charging interest rates, and it has been growing quickly. In myprevious article, I showed that in Sep 2022, SeaBank Indonesia grew its loans and customer deposits by 111% Y/Y and 147% Y/Y, respectively, and the launch of ShopeePay in Brazil. During the earnings call, management stated that the credit business is profitable and cash flow positive, and it will be focusing on growing this business in Southeast Asia (“SEA”) and Brazil.Additionally, they have also said to diversify their source of funding for the credit business, which I believe is to seek third-party financing partners to reduce the capital required for the business and at the same time, reduce credit risk. Similar to Bank Jago (IDX: ARTO), SeaBank may utilize the data of its partners to help improve the non-performing loans and scale its lending. Readers who are unaware of SeaBank’s business model can head to mydeep diveinto the company.SE 10-QSE 10-QSE 10-QAs a result of its growing deposits and loan books, its Q3 2022 revenue grew 147% Y/Y, and it has been increasingly making up a bigger portion of its overall revenue at 10.4% this quarter. Management had also been deliberate in cutting down on S&M expenses and combined with its acceleration revenue growth, its adjusted EBITDA margin has improved massively to -20.7% during the quarter. This is compared to -40% in 2Q22 and -120.3% a year ago.Sufficient Cash Reserves To Pay off Convertible NotesSE 10-QOne of the biggest concerns about Sea Limited for investors is the cash burn rate, as they fear that the company does not have enough sufficient cash reserves to pay off convertible notes maturing in 2026. However, not only did the cash outflow slow in Q3 2022, but the management has also hinted that there are sufficient cash reserves to pay off the convertible notes:“We aim to continue to maintain a net cash position, after budgeting for the full retirement in cash of outstanding convertible bonds and assuming no external funding.”ConclusionOverall, this was a pretty decent quarter for Sea Limited, as we could see that they had made huge improvements on the road to profitability, particularly for Shopee. While that comes at a growth trade-off, management has indicated that Shopee can reaccelerate its growth after attaining profitability in FY23, which is pulled forward from FY25 as guided previously.Garena's results continue to be a concern as macro seems to have a longer-than-expected impact on its user base and its profitability as a result has been trending downwards over the past couple of quarters. Management has been working hard on its gaming pipelines, although the uncertainty lies in the successes of these new games and whether they could reaccelerate their growth in the future.SeaBank has been growing its top line really quickly and huge improvements were made on the bottom line as well. Furthermore, the overall credit business is profitable and is generating positive cash flow, and has been increasingly making up a larger proportion of its total revenue. I continue to believe that this can be a potential growth driver for Sea Limited.","news_type":1},"isVote":1,"tweetType":1,"viewCount":192,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9963325105,"gmtCreate":1668601500107,"gmtModify":1676538082864,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/SE\">$Sea Ltd(SE)$&nbsp;</a>","listText":"<a href=\"https://ttm.financial/S/SE\">$Sea Ltd(SE)$&nbsp;</a>","text":"$Sea Ltd(SE)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9963325105","isVote":1,"tweetType":1,"viewCount":408,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9937249171,"gmtCreate":1663461362094,"gmtModify":1676537272580,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9937249171","repostId":"2268672370","repostType":4,"repost":{"id":"2268672370","pubTimestamp":1663460267,"share":"https://ttm.financial/m/news/2268672370?lang=&edition=fundamental","pubTime":"2022-09-18 08:17","market":"us","language":"en","title":"Can the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know","url":"https://stock-news.laohu8.com/highlight/detail?id=2268672370","media":"MarketWatch","summary":"Investors should brace for more volatility with policy makers expected to deliver another jumbo rate","content":"<html><head></head><body><p>Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hike</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5b4166c0ac7b0bdf7caa1837ef618a67\" tg-width=\"700\" tg-height=\"487\" width=\"100%\" height=\"auto\"/><span>Fed Chair Jerome Powell says bringing down inflation will cause pain for households and businesses.</span></p><p>The Federal Reserve isn’t trying to slam the stock market as it rapidly raises interest rates in its bid to slow inflation still running red hot — but investors need to be prepared for more pain and volatility because policy makers aren’t going to be cowed by a deepening selloff, investors and strategists said.</p><p>“I don’t think they’re necessarily trying to drive inflation down by destroying stock prices or bond prices, but it is having that effect.” said Tim Courtney, chief investment officer at Exencial Wealth Advisors, in an interview.</p><p>U.S. stocks fell sharply in the past week after hopes for a pronounced cooling in inflation were dashed by a hotter-than-expected August inflation reading. The data cemented expectations among fed-funds futures traders for a rate hike of at least 75 basis points when the Fed concludes its policy meeting on Sept. 21, with some traders and analysts looking for an increase of 100 basis points, or a full percentage point.</p><p>The Dow Jones Industrial Average logged a 4.1% weekly fall, while the S&amp;P 500 dropped 4.8% and the Nasdaq Composite suffered a 5.5% decline. The S&amp;P 500 ended Friday below the 3,900 level viewed as an important area of technical support, with some chart watchers eyeing the potential for a test of the large-cap benchmark’s 2022 low at 3,666.77 set on June 16.</p><p>A profit warning from global shipping giant and economic bellwether FedEx Corp. further stoked recession fears, contributing to stock-market losses on Friday.</p><p>Treasurys also fell, with yield on the 2-year Treasury note soaring to a nearly 15-year high above 3.85% on expectations the Fed will continue pushing rates higher in coming months. Yields rise as prices fall.</p><p>Investors are operating in an environment where the central bank’s need to rein in stubborn inflation is widely seen having eliminated the notion of a figurative “Fed put” on the stock market.</p><p>The concept of a Fed put has been around since at least the October 1987 stock-market crash prompted the Alan Greenspan-led central bank to lower interest rates. An actual put option is a financial derivative that gives the holder the right but not the obligation to sell the underlying asset at a set level, known as the strike price, serving as an insurance policy against a market decline.</p><p>Some economists and analysts have even suggested the Fed should welcome or even aim for market losses, which could serve to tighten financial conditions as investors scale back spending.</p><p>William Dudley, the former president of the New York Fed, argued earlier this year that the central bank won’t get a handle on inflation that’s running near a 40-year high unless they make investors suffer. “It’s hard to know how much the Federal Reserve will need to do to get inflation under control,” wrote Dudley in a Bloomberg column in April. “But one thing is certain: to be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.”</p><p>Some market participants aren’t convinced. Aoifinn Devitt, chief investment officer at Moneta,said the Fed likely sees stock-market volatility as a byproduct of its efforts to tighten monetary policy, not an objective.</p><p>“They recognize that stocks can be collateral damage in a tightening cycle,” but that doesn’t mean that stocks “have to collapse,” Devitt said.</p><p>The Fed, however, is prepared to tolerate seeing markets decline and the economy slow and even tip into recession as it focuses on taming inflation, she said.</p><p>The Federal Reserve held the fed funds target rate at a range of 0% to 0.25% between 2008 and 2015, as it dealt with the financial crisis and its aftermath. The Fed also cut rates to near zero again in March 2020 in response to the COVID-19 pandemic. With a rock-bottom interest rate, the Dow skyrocketed over 40%, while the large-cap index S&amp;P 500 jumped over 60% between March 2020 and December 2021, according to Dow Jones Market Data.</p><p>Investors got used to “the tailwind for over a decade with falling interest rates” while looking for the Fed to step in with its “put” should the going get rocky, said Courtney at Exencial Wealth Advisors.</p><p>“I think (now) the Fed message is ‘you’re not gonna get this tailwind anymore’,” Courtney told MarketWatch on Thursday. “I think markets can grow, but they’re gonna have to grow on their own because the markets are like a greenhouse where the temperatures have to be kept at a certain level all day and all night, and I think that’s the message that markets can and should grow on their own without the greenhouse effect.”</p><p>Meanwhile, the Fed’s aggressive stance means investors should be prepared for what may be a “few more daily stabs downward” that could eventually prove to be a “final big flush,” said Liz Young, head of investment strategy at SoFi, in a Thursday note.</p><p>“This may sound odd, but if that happens swiftly, meaning within the next couple months, that actually becomes the bull case in my view,” she said. “It could be a quick and painful drop, resulting in a renewed move higher later in the year that’s more durable, as inflation falls more notably.”</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Can the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCan the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-09-18 08:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hikeFed Chair Jerome Powell says bringing down inflation will cause pain for households and ...</p>\n\n<a href=\"https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2268672370","content_text":"Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hikeFed Chair Jerome Powell says bringing down inflation will cause pain for households and businesses.The Federal Reserve isn’t trying to slam the stock market as it rapidly raises interest rates in its bid to slow inflation still running red hot — but investors need to be prepared for more pain and volatility because policy makers aren’t going to be cowed by a deepening selloff, investors and strategists said.“I don’t think they’re necessarily trying to drive inflation down by destroying stock prices or bond prices, but it is having that effect.” said Tim Courtney, chief investment officer at Exencial Wealth Advisors, in an interview.U.S. stocks fell sharply in the past week after hopes for a pronounced cooling in inflation were dashed by a hotter-than-expected August inflation reading. The data cemented expectations among fed-funds futures traders for a rate hike of at least 75 basis points when the Fed concludes its policy meeting on Sept. 21, with some traders and analysts looking for an increase of 100 basis points, or a full percentage point.The Dow Jones Industrial Average logged a 4.1% weekly fall, while the S&P 500 dropped 4.8% and the Nasdaq Composite suffered a 5.5% decline. The S&P 500 ended Friday below the 3,900 level viewed as an important area of technical support, with some chart watchers eyeing the potential for a test of the large-cap benchmark’s 2022 low at 3,666.77 set on June 16.A profit warning from global shipping giant and economic bellwether FedEx Corp. further stoked recession fears, contributing to stock-market losses on Friday.Treasurys also fell, with yield on the 2-year Treasury note soaring to a nearly 15-year high above 3.85% on expectations the Fed will continue pushing rates higher in coming months. Yields rise as prices fall.Investors are operating in an environment where the central bank’s need to rein in stubborn inflation is widely seen having eliminated the notion of a figurative “Fed put” on the stock market.The concept of a Fed put has been around since at least the October 1987 stock-market crash prompted the Alan Greenspan-led central bank to lower interest rates. An actual put option is a financial derivative that gives the holder the right but not the obligation to sell the underlying asset at a set level, known as the strike price, serving as an insurance policy against a market decline.Some economists and analysts have even suggested the Fed should welcome or even aim for market losses, which could serve to tighten financial conditions as investors scale back spending.William Dudley, the former president of the New York Fed, argued earlier this year that the central bank won’t get a handle on inflation that’s running near a 40-year high unless they make investors suffer. “It’s hard to know how much the Federal Reserve will need to do to get inflation under control,” wrote Dudley in a Bloomberg column in April. “But one thing is certain: to be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.”Some market participants aren’t convinced. Aoifinn Devitt, chief investment officer at Moneta,said the Fed likely sees stock-market volatility as a byproduct of its efforts to tighten monetary policy, not an objective.“They recognize that stocks can be collateral damage in a tightening cycle,” but that doesn’t mean that stocks “have to collapse,” Devitt said.The Fed, however, is prepared to tolerate seeing markets decline and the economy slow and even tip into recession as it focuses on taming inflation, she said.The Federal Reserve held the fed funds target rate at a range of 0% to 0.25% between 2008 and 2015, as it dealt with the financial crisis and its aftermath. The Fed also cut rates to near zero again in March 2020 in response to the COVID-19 pandemic. With a rock-bottom interest rate, the Dow skyrocketed over 40%, while the large-cap index S&P 500 jumped over 60% between March 2020 and December 2021, according to Dow Jones Market Data.Investors got used to “the tailwind for over a decade with falling interest rates” while looking for the Fed to step in with its “put” should the going get rocky, said Courtney at Exencial Wealth Advisors.“I think (now) the Fed message is ‘you’re not gonna get this tailwind anymore’,” Courtney told MarketWatch on Thursday. “I think markets can grow, but they’re gonna have to grow on their own because the markets are like a greenhouse where the temperatures have to be kept at a certain level all day and all night, and I think that’s the message that markets can and should grow on their own without the greenhouse effect.”Meanwhile, the Fed’s aggressive stance means investors should be prepared for what may be a “few more daily stabs downward” that could eventually prove to be a “final big flush,” said Liz Young, head of investment strategy at SoFi, in a Thursday note.“This may sound odd, but if that happens swiftly, meaning within the next couple months, that actually becomes the bull case in my view,” she said. “It could be a quick and painful drop, resulting in a renewed move higher later in the year that’s more durable, as inflation falls more notably.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":112,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9931332600,"gmtCreate":1662410525600,"gmtModify":1676537051895,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9931332600","repostId":"2265703480","repostType":4,"repost":{"id":"2265703480","pubTimestamp":1662390641,"share":"https://ttm.financial/m/news/2265703480?lang=&edition=fundamental","pubTime":"2022-09-05 23:10","market":"us","language":"en","title":"6 Reasons to Buy Apple Stock Now and Never Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2265703480","media":"Motley Fool","summary":"There's a reason the iPhone maker is the market-cap king.","content":"<html><head></head><body><p>Even as the bear market lingers, investors might be surprised to learn that <b>Apple</b> <i>still</i> holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 trillion. Perhaps even more impressive is the fact that even in the midst of the ongoing meltdown in technology stocks, the iPhone maker has outperformed the broader indexes and many of its peers.</p><p>From their peaks several months ago, the <b>S&amp;P 500</b> and the <b>Nasdaq Composite</b> indexes have declined 17% and 26%, respectively, while Apple stock has shed just 13%.</p><p>That performance notwithstanding, there are plenty of reasons for investors to buy Apple stock and hold forever.</p><h2>1. It&#39;s Warren Buffett&#39;s largest holding</h2><p>Given his extraordinary track record, investors could do far worse than following in the footsteps of legendary money manager Warren Buffett. Since taking the helm of <b>Berkshire Hathaway</b> in 1965, the &#34;Oracle of Omaha&#34; has delivered mind-boggling returns, generating a compound annual growth rate of more than 20%. In fact, by the end of 2021, the company&#39;s overall returns clocked in at a staggering 3,641,613%.</p><p>Lest there be any doubt, Apple is far and away Berkshire&#39;s largest holding. Buffett ended the second quarter with nearly 895 million shares of Apple stock, worth roughly $122 billion as of June, 30, accounting for about 41% of Berkshire&#39;s portfolio. That&#39;s quite a vote of confidence from one of the world&#39;s most successful investors.</p><h2>2. One billion iPhones strong -- and growing</h2><p>There&#39;s no question that the release of the iconic iPhone in 2007 ushered in the modern smartphone and forever changed the way we communicate. The device&#39;s sleek design and integrated computing power took the world by storm. Now, as we await the release of the upcoming iPhone 14, Apple dominates the market, with more than 1 billion active iPhones in the wild.</p><p>Rumors are swirling that the next-generation device -- which is due to be unveiled next week -- could sport some major upgrades and four new models. Wedbush analyst Dan Ives estimates that roughly 24% of iPhone owners worldwide haven&#39;t upgraded their device over the past 3.5 years. Even in the midst of the prevailing macroeconomic headwinds, this could mark the beginning of the next big product cycle for the iPhone.</p><h2>3. Apple is the new black</h2><p>While the iPhone gets all the press, Apple&#39;s wearables, home products, and accessories segment -- which includes such products as Apple Watch, AirPods, AirTags, and Beats headphones -- continue to steadily attract converts. Earlier this year, noted tech analyst Horace Dediu announced that &#34;Apple Wearables is now [the size of] a Fortune 100 business.&#34; In fact, the segment has generated more revenue so far in fiscal 2022 than either the Mac <i>or</i> the iPad.</p><p>Supply constraints and foreign exchange headwinds have weighed on the segment, which grew just 6% year over year through the first three quarters of fiscal 2022. That said, the resulting pent-up demand will eventually give way to a surge in sales. Furthermore, the company is expected to release the latest versions of its Apple Watch next week. These could include a Pro model, which could serve to supercharge sales of the popular device.</p><h2>4. Services: Apple&#39;s second-biggest breadwinner</h2><p>Long before anyone else, CEO Tim Cook saw the potential for Apple&#39;s services segment, announcing plans in early 2017 to double its revenue over the coming four years. Fast forward to mid-2022, and services has come into its own.</p><p>The segment, which includes Apple Music, the App Store, Apple Pay, and Apple TV+ (among others), just set a June quarter record,  generating 19% of Apple&#39;s total revenue. Services also saw revenue records in each major category, including all-time records for Music, Cloud Services, Apple Care, and Payment Services.</p><p>Apple TV+ began as something of an industry joke, with just eight programs and a documentary. But nobody&#39;s laughing now. Apple has netted more than 250 awards and over 1,100 nominations for its programming, including 52 Emmy Award nominations in 2022.</p><h2>5. Dividends: The gift that keeps on giving</h2><p>Apple began paying a dividend again in 2012 and has amassed quite an impressive track record. The quarterly payout began at a split-adjusted $0.095 and has soared 143% in just ten years.</p><p>This includes Apple&#39;s announcement earlier this year, which boosted the quarterly payout to $0.23 per share, an increase of 5% for 2022. That likely won&#39;t be the last increase as Apple is using less than 15% of its profits to fund the payout, giving the company plenty of opportunity for future increases.</p><h2>6. Fewer shares = a bigger slice of the Apple pie</h2><p>Another highlight of Apple&#39;s shareholder-friendly policies is the company&#39;s strong share-repurchase plan. Apple began buying back shares in earnest in early 2013 and has never taken its foot off the gas. As a result, with each passing quarter, Apple shareholders own a larger share of the company. In fact, over the past 10 years, Apple&#39;s share count has declined by nearly 39%.</p><p><img src=\"https://static.tigerbbs.com/efa1386fae6e413934cdecf682a72a71\" tg-width=\"720\" tg-height=\"387\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Data by YCharts.</p><p>As an example, the company retired roughly 1% of its shares in its fiscal third quarter and has no plans of slowing down. Earlier this year, Apple announced that it added another $90 billion to its existing share-repurchase program.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>6 Reasons to Buy Apple Stock Now and Never Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n6 Reasons to Buy Apple Stock Now and Never Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-09-05 23:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Even as the bear market lingers, investors might be surprised to learn that Apple still holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2265703480","content_text":"Even as the bear market lingers, investors might be surprised to learn that Apple still holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 trillion. Perhaps even more impressive is the fact that even in the midst of the ongoing meltdown in technology stocks, the iPhone maker has outperformed the broader indexes and many of its peers.From their peaks several months ago, the S&P 500 and the Nasdaq Composite indexes have declined 17% and 26%, respectively, while Apple stock has shed just 13%.That performance notwithstanding, there are plenty of reasons for investors to buy Apple stock and hold forever.1. It's Warren Buffett's largest holdingGiven his extraordinary track record, investors could do far worse than following in the footsteps of legendary money manager Warren Buffett. Since taking the helm of Berkshire Hathaway in 1965, the \"Oracle of Omaha\" has delivered mind-boggling returns, generating a compound annual growth rate of more than 20%. In fact, by the end of 2021, the company's overall returns clocked in at a staggering 3,641,613%.Lest there be any doubt, Apple is far and away Berkshire's largest holding. Buffett ended the second quarter with nearly 895 million shares of Apple stock, worth roughly $122 billion as of June, 30, accounting for about 41% of Berkshire's portfolio. That's quite a vote of confidence from one of the world's most successful investors.2. One billion iPhones strong -- and growingThere's no question that the release of the iconic iPhone in 2007 ushered in the modern smartphone and forever changed the way we communicate. The device's sleek design and integrated computing power took the world by storm. Now, as we await the release of the upcoming iPhone 14, Apple dominates the market, with more than 1 billion active iPhones in the wild.Rumors are swirling that the next-generation device -- which is due to be unveiled next week -- could sport some major upgrades and four new models. Wedbush analyst Dan Ives estimates that roughly 24% of iPhone owners worldwide haven't upgraded their device over the past 3.5 years. Even in the midst of the prevailing macroeconomic headwinds, this could mark the beginning of the next big product cycle for the iPhone.3. Apple is the new blackWhile the iPhone gets all the press, Apple's wearables, home products, and accessories segment -- which includes such products as Apple Watch, AirPods, AirTags, and Beats headphones -- continue to steadily attract converts. Earlier this year, noted tech analyst Horace Dediu announced that \"Apple Wearables is now [the size of] a Fortune 100 business.\" In fact, the segment has generated more revenue so far in fiscal 2022 than either the Mac or the iPad.Supply constraints and foreign exchange headwinds have weighed on the segment, which grew just 6% year over year through the first three quarters of fiscal 2022. That said, the resulting pent-up demand will eventually give way to a surge in sales. Furthermore, the company is expected to release the latest versions of its Apple Watch next week. These could include a Pro model, which could serve to supercharge sales of the popular device.4. Services: Apple's second-biggest breadwinnerLong before anyone else, CEO Tim Cook saw the potential for Apple's services segment, announcing plans in early 2017 to double its revenue over the coming four years. Fast forward to mid-2022, and services has come into its own.The segment, which includes Apple Music, the App Store, Apple Pay, and Apple TV+ (among others), just set a June quarter record,  generating 19% of Apple's total revenue. Services also saw revenue records in each major category, including all-time records for Music, Cloud Services, Apple Care, and Payment Services.Apple TV+ began as something of an industry joke, with just eight programs and a documentary. But nobody's laughing now. Apple has netted more than 250 awards and over 1,100 nominations for its programming, including 52 Emmy Award nominations in 2022.5. Dividends: The gift that keeps on givingApple began paying a dividend again in 2012 and has amassed quite an impressive track record. The quarterly payout began at a split-adjusted $0.095 and has soared 143% in just ten years.This includes Apple's announcement earlier this year, which boosted the quarterly payout to $0.23 per share, an increase of 5% for 2022. That likely won't be the last increase as Apple is using less than 15% of its profits to fund the payout, giving the company plenty of opportunity for future increases.6. Fewer shares = a bigger slice of the Apple pieAnother highlight of Apple's shareholder-friendly policies is the company's strong share-repurchase plan. Apple began buying back shares in earnest in early 2013 and has never taken its foot off the gas. As a result, with each passing quarter, Apple shareholders own a larger share of the company. In fact, over the past 10 years, Apple's share count has declined by nearly 39%.Data by YCharts.As an example, the company retired roughly 1% of its shares in its fiscal third quarter and has no plans of slowing down. Earlier this year, Apple announced that it added another $90 billion to its existing share-repurchase program.","news_type":1},"isVote":1,"tweetType":1,"viewCount":122,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9997207864,"gmtCreate":1661814469960,"gmtModify":1676536581716,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997207864","repostId":"1150131944","repostType":2,"repost":{"id":"1150131944","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":1,"media_name":"Dow Jones","id":"1012688067","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1661785321,"share":"https://ttm.financial/m/news/1150131944?lang=&edition=fundamental","pubTime":"2022-08-29 23:02","market":"us","language":"en","title":"Apple, Alphabet, and Other Big Tech Stocks Extend Losses","url":"https://stock-news.laohu8.com/highlight/detail?id=1150131944","media":"Dow Jones","summary":"Major technology stocks such as Apple and Alphabet extended losses Monday after Federal Reserve Chai","content":"<html><head></head><body><p>Major technology stocks such as <a href=\"https://laohu8.com/S/AAPL\">Apple</a> and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.</p><p>Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.</p><p>The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.</p><p><a href=\"https://laohu8.com/S/AAPL\">Apple </a> was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.</p><p>Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.</p><p>Shares of <a href=\"https://laohu8.com/S/GOOGL\">Alphabet </a>, the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.</p><p><img src=\"https://community-static.tradeup.com/news/969c206ad53e5dc436c63aa82513cdc4\" tg-width=\"459\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.</p><p>The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.</p><p>Shares of other tech giants also were trading lower Monday. <a href=\"https://laohu8.com/S/MSFT\">Microsoft </a> was down 1.36% after slumping 3.9% on Friday. <a href=\"https://laohu8.com/S/AMZN\">Amazon.com </a> declined 1.14% after the stock finished Friday down 4.8%.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple, Alphabet, and Other Big Tech Stocks Extend Losses</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple, Alphabet, and Other Big Tech Stocks Extend Losses\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1012688067\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2022-08-29 23:02</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>Major technology stocks such as <a href=\"https://laohu8.com/S/AAPL\">Apple</a> and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.</p><p>Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.</p><p>The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.</p><p><a href=\"https://laohu8.com/S/AAPL\">Apple </a> was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.</p><p>Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.</p><p>Shares of <a href=\"https://laohu8.com/S/GOOGL\">Alphabet </a>, the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.</p><p><img src=\"https://community-static.tradeup.com/news/969c206ad53e5dc436c63aa82513cdc4\" tg-width=\"459\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.</p><p>The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.</p><p>Shares of other tech giants also were trading lower Monday. <a href=\"https://laohu8.com/S/MSFT\">Microsoft </a> was down 1.36% after slumping 3.9% on Friday. <a href=\"https://laohu8.com/S/AMZN\">Amazon.com </a> declined 1.14% after the stock finished Friday down 4.8%.</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"GOOG":"谷歌","MSFT":"微软","AAPL":"苹果"},"source_url":"","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1150131944","content_text":"Major technology stocks such as Apple and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.Apple  was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.Shares of Alphabet , the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.Shares of other tech giants also were trading lower Monday. Microsoft  was down 1.36% after slumping 3.9% on Friday. Amazon.com  declined 1.14% after the stock finished Friday down 4.8%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":194,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9996085395,"gmtCreate":1661080835319,"gmtModify":1676536449990,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9996085395","repostId":"2260785313","repostType":4,"repost":{"id":"2260785313","pubTimestamp":1661045446,"share":"https://ttm.financial/m/news/2260785313?lang=&edition=fundamental","pubTime":"2022-08-21 09:30","market":"us","language":"en","title":"No, There Is No New Short-Selling Champion in Tesla Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2260785313","media":"Barrons","summary":"There was a stir in the Tesla investing community when a regulator filing indicated that asset manag","content":"<html><head></head><body><p>There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just a tempest in a teapot. There is no new short-selling champion for Tesla bears to hoist onto their shoulders.</p><p>A put option is, generally speaking, a bearish bet. It gives the holder the right to sell a stock at a fixed price in the future. Holders of put options do better the lower a stock price falls.</p><p>A quarterly regulatory filing indicated that Deer Park had amassed put-option contracts representing more than 4.8 million shares of Tesla (ticker: TSLA) stock. That much Tesla stock is worth roughly $4.3 billion at current prices. On the surface that looks like a massive bet.</p><p>But that isn&#39;t really the way options work. The price paid for an options contract depends on many factors including the strike price and time to contract expiration.</p><p>Consider Tesla put options that expire Friday Aug. 19, and give the holder the right to sell Tesla stock at about $800 a share are essentially trading for about one cent. Theoretically, amassing options contracts that reflect 4.8 million shares of Tesla could cost someone $48,000. That&#39;s a long way from $4.3 billion.</p><p>It wouldn&#39;t be a good idea, though. There isn&#39;t high probability that Tesla stock will drop about $100 in the final hour of trading Friday.</p><p>(There isn&#39;t much trading volume in those contracts. It&#39;s just an example.)</p><p>Deer Park Chief Investment Officer Scott Burg told Barron&#39;s the Tesla put-options position amounted to 0.1% of his portfolio. That isn&#39;t all that much, and indicates Deer Park probably paid the less than $1 per share represented the puts.</p><p>That isn&#39;t a lot for a stock worth about $900. That also means the put options were either expiring soon, or deeply out of the money, or both. Burg didn&#39;t get into contract specifics, but said the position was closed profitably. The tiny position is already gone.</p><p>Profits aren&#39;t hard to fathom. Tesla stock did fall, along with other technology shares, in the second quarter. Tesla stock dropped almost 38% from the end of March to the end of June while the Nasdaq Composite fell 22% over the same span.</p><p>Burg doesn&#39;t consider himself a big Tesla bear. He&#39;s says he is bearish on the overall economy and the consumer. He expects Tesla stock to struggle, but just like any other consumer discretionary stock this coming year.</p><p>The whole episode does illustrate an important lesson about options trading. There are many ways to use options in a portfolio.</p><p>Investors can buy options contracts far from current prices. They are cheap and only pay off if extreme events happen. They can also be used to bet on volatility. Options get more valuable as stock volatility rises and less valuable when volatility falls. Options can be used to hedge a portfolio, too.</p><p>What&#39;s more, bearish options bets can actually generate income for bullish investors. Take Tesla. It doesn&#39;t pay a dividend. If that irks some shareholders they can sell call options contracts. (Selling a call is similar to a put option. Both work out if the stock falls. It&#39;s a bearish bet.)</p><p>A Tesla holder selling a $900 call option that expires in September gets about $44. That&#39;s almost 5% the value of the Tesla stock. The risk with selling call options against stock held is that the stock could go up. If Tesla hit $1,000, that holder would have essentially sold some of his position for $900, missing out on the additional gain.</p><p>There are many other things pros do with options. People have careers trading options for brokerage firms and asset managers.</p><p>However, options don&#39;t indicate with certainty how someone feels about the stock that underlies the options contract.</p></body></html>","source":"lsy1601382232898","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>No, There Is No New Short-Selling Champion in Tesla Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNo, There Is No New Short-Selling Champion in Tesla Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-21 09:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA><strong>Barrons</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just ...</p>\n\n<a href=\"https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2260785313","content_text":"There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just a tempest in a teapot. There is no new short-selling champion for Tesla bears to hoist onto their shoulders.A put option is, generally speaking, a bearish bet. It gives the holder the right to sell a stock at a fixed price in the future. Holders of put options do better the lower a stock price falls.A quarterly regulatory filing indicated that Deer Park had amassed put-option contracts representing more than 4.8 million shares of Tesla (ticker: TSLA) stock. That much Tesla stock is worth roughly $4.3 billion at current prices. On the surface that looks like a massive bet.But that isn't really the way options work. The price paid for an options contract depends on many factors including the strike price and time to contract expiration.Consider Tesla put options that expire Friday Aug. 19, and give the holder the right to sell Tesla stock at about $800 a share are essentially trading for about one cent. Theoretically, amassing options contracts that reflect 4.8 million shares of Tesla could cost someone $48,000. That's a long way from $4.3 billion.It wouldn't be a good idea, though. There isn't high probability that Tesla stock will drop about $100 in the final hour of trading Friday.(There isn't much trading volume in those contracts. It's just an example.)Deer Park Chief Investment Officer Scott Burg told Barron's the Tesla put-options position amounted to 0.1% of his portfolio. That isn't all that much, and indicates Deer Park probably paid the less than $1 per share represented the puts.That isn't a lot for a stock worth about $900. That also means the put options were either expiring soon, or deeply out of the money, or both. Burg didn't get into contract specifics, but said the position was closed profitably. The tiny position is already gone.Profits aren't hard to fathom. Tesla stock did fall, along with other technology shares, in the second quarter. Tesla stock dropped almost 38% from the end of March to the end of June while the Nasdaq Composite fell 22% over the same span.Burg doesn't consider himself a big Tesla bear. He's says he is bearish on the overall economy and the consumer. He expects Tesla stock to struggle, but just like any other consumer discretionary stock this coming year.The whole episode does illustrate an important lesson about options trading. There are many ways to use options in a portfolio.Investors can buy options contracts far from current prices. They are cheap and only pay off if extreme events happen. They can also be used to bet on volatility. Options get more valuable as stock volatility rises and less valuable when volatility falls. Options can be used to hedge a portfolio, too.What's more, bearish options bets can actually generate income for bullish investors. Take Tesla. It doesn't pay a dividend. If that irks some shareholders they can sell call options contracts. (Selling a call is similar to a put option. Both work out if the stock falls. It's a bearish bet.)A Tesla holder selling a $900 call option that expires in September gets about $44. That's almost 5% the value of the Tesla stock. The risk with selling call options against stock held is that the stock could go up. If Tesla hit $1,000, that holder would have essentially sold some of his position for $900, missing out on the additional gain.There are many other things pros do with options. People have careers trading options for brokerage firms and asset managers.However, options don't indicate with certainty how someone feels about the stock that underlies the options contract.","news_type":1},"isVote":1,"tweetType":1,"viewCount":144,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9991121201,"gmtCreate":1660791892705,"gmtModify":1676536400721,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9991121201","repostId":"1119354607","repostType":2,"repost":{"id":"1119354607","pubTimestamp":1660791078,"share":"https://ttm.financial/m/news/1119354607?lang=&edition=fundamental","pubTime":"2022-08-18 10:51","market":"us","language":"en","title":"Sea Limited: Riding This Wave Through Recent Volatility","url":"https://stock-news.laohu8.com/highlight/detail?id=1119354607","media":"Seeking Alpha","summary":"SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below ","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>Sea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.</li><li>Management also pulled guidance for their E-Commerce segment given the uncertainties.</li><li>With the stock down 65% year to date and sentiment remaining negative, I believe we may be nearing a bottom.</li><li>Valuation is currently ~3.5x forward revenue and if the company can execute on their efficiency and profitability targets, long-term investors could be rewarded.</li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1aba4b262e32def27011fb88083553dc\" tg-width=\"1080\" tg-height=\"900\" referrerpolicy=\"no-referrer\"/><span>SIphotography</span></p><p>Sea Limited (NYSE:SE) recently reported a challenging Q2 with revenue and adjusted EBITDA coming in below expectations given the ongoing macro pressures on their business.</p><p>The biggest disappointment during the quarter was the company suspending guidance for their E-Commercesegment in addition to the company reported ongoing declines in their Digital Entertainment quarterly active users and quarterly paying users.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/947cbefc4a9424c2cf4602555ffcfaf2\" tg-width=\"1280\" tg-height=\"802\" referrerpolicy=\"no-referrer\"/><span>SE data by YCharts</span></p><p>To no surprise, the company&#39;s stock was down over 10% on disappointing earnings and guidance suspension, which brings the year to date pulldown to 65%.</p><p>Yes, the macro environment remain very challenged and there is still a lot of uncertainty that may take several quarters or months to play out. However, I believe much of this is currently priced into the stock.</p><p>Currently, Sea trades at 3.5x forward revenue, which is pretty similar to the recent range of 3-4x forward revenue. The combination of challenging macro, revenue deceleration, and ongoing adjusted EBITDA losses makes it difficult to see multiple expansion in the near-term.</p><p>However, long-term investors should remain confident in the outlook and could view this recent pullback as a buying opportunity. Given the recent stock weakness and ongoing negative sentiment, I do believe we may be near a bottom for the stock. Even though the stock remains a show-me story, I continue to believe the long-term outlook remains healthy and long-term investors will be rewarded over time.</p><p><b>Financial Review and Guidance</b></p><p>During the quarter, revenue grew 29% yoy to $2.94 billion, which actually missed expectations by $90 million. While results were certainly weighed down by the macro environment, the underlying trends seemed to be okay. Heading into earrings, I was a little more cautious given the challenging macro environment and warned that upcoming results could disappoint.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/aa02e1ba77d5ca0242b3375eb7f4397c\" tg-width=\"437\" tg-height=\"423\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>On top of the revenue shortfall, the company reported total adjusted EBITDA loss of $506 million, which is worse than the $24 million last in the year-ago period. Ultimately, this led to the company reporting non-GAAP EPS loss of $1.03, which was worse than expectations.</p><p><b>E-Commerce</b></p><p>E-Commerce revenue during the quarter continued to decelerate, with revenue growing 51% yoy to $1.7 billion. I previously warned of the difficult growth comparisons coming up with revenue growth being 250% yoy in Q1-2021, 161% yoy in Q2-2021, and 134% yoy in Q3-2021. Not surprisingly, the challenging growth comparable caused another quarter of E-Commerce revenue deceleration.</p><p>In addition, consumers were faced with a high inflationary environment with wages not keeping pace, thus the real cost of goods has increased quite significantly, placing pressure on discretionary spending.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3644e6fd6348a46434e94b9052848db6\" tg-width=\"640\" tg-height=\"297\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>Also during the quarter, gross orders grew 42% yoy to 2.0 billion, and while this is up sequentially from 1.9 billion last quarter, the past three quarters have not seen much sequential growth.</p><p>While the company&#39;s Shopee platform continues to receive high marksacross the globe as one of the highest ranked apps, profitability has struggled to gain traction. In fact, adjusted EBITDA loss during the quarter was $648 million, which is almost $70 million worse than the year-ago period. Focus needs to rapidly shift to profitability improvement.</p><p>And management took this first step during the quarter with adjusted EBITDA loss per order improving 21% yoy. While disappointing to see, it was not overly shocking to see management pull guidance for their E-Commerce segment for the remainder of the year given the several macro headwinds the company is currently experiencing.</p><blockquote>Given our strategic shifts, coupled with the various macro factors that are hard to predict as mentioned before, we believe it is prudent to maximize our focus on efficiency across our business rather than over-committing which we believe would be ill-advised at this time of uncertainty. As such, we are suspending the full year guidance for Shopee, which we last provided in May. Even though we have stopped providing guidance, our focus for the rest of the year remains very clear, which is to continue to improve efficiency by both deepening monetization and optimizing our cost structure. We will be more tightly managing our operating expenses, such as marketing costs and logistics costs, while also gradually increasing monetization across various income streams with a focus on the high margin ones.</blockquote><p>Remember, last quarter management downward revised their E-Commerce revenue expectations given the increased uncertainties in the macro environment, especially around the Asia-Pacific regions. And rather than lowering guidance again and remaining uncertain, I think management did the right thing in not providing any guidance.</p><p>While sentiment likely remains negative around this segment for some time until the company can show improving revenue and profitability trends, I do believe the long-term outlook remains healthy in a normalized environment.</p><p><b>Digital Entertainment</b></p><p>Digital Entertainment revenue during the quarter came in at $900 million, which actually declined from the $1.0 billion reported in the year-ago period, largely driven by lower quarterly active users. In addition, bookings during the quarter were $717 million, declining around 40% yoy compared to $1.2 billion in the year-ago period.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/64fb9365f6a4d9588208a22e5e9c8643\" tg-width=\"640\" tg-height=\"293\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>Last quarter, management commented on a slowdown in user engagement with quarterly active users declining 5% yoy and quarterly paying users declining 23% yoy. And in Q2, trends continued to deteriorate.</p><p>During the quarter, quarterly active users declined 15% yoy with quarterly paying users declining 39% yoy. While the company noted that Free Fire continues to be the highest grossing mobile game in Southeast Asia and Latin America for the 12th consecutive quarter, they also talked about some of the macro headwinds they are seeing in the business.</p><blockquote>While short-term gaming industry trends remain relatively uncertain due to reopening trends as well as the potential impact from macro volatility, we are highly confident in the long-term structural tailwinds of the segment. We expect this to be even more apparent across our markets where we are well positioned and the growth runway for digital entertainment is substantial. We also expect this to support the long-term sustained life span of our existing franchises and platforms.</blockquote><p>Yes, user engagement trends can move around from quarter to quarter, but these underlying trends are worrisome and the uncertain macro environment paints a challenging picture. With ongoing pressure in quarterly active users and even worse trends in paying users, I believe this part of the business remains a show-me story.</p><p>In addition, adjusted EBITDA for this segment during the quarter was $334 million, down from $741 million in the year-ago period. This represents 46.5% of bookings during the quarter, which is also down from 62.8% in the year-ago period.</p><p><b>Digital Financial Services</b></p><p>One area of strength during the quarter was within their Digital Financial Services business, which continues to post impressive growth. Revenue during the quarter grew 214% yoy to $279 million and the company actually improved their adjusted EBITDA loss to $112 million, up from the loss of $155 million in the year-ago period.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7d3e5ef5588d010a662d6125d875e056\" tg-width=\"640\" tg-height=\"318\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>What drove this strength during the quarter was the combination of ongoing success with quarterly active users and TPV within their mobile wallet.</p><p>Quarterly active users grew 53% yoy to 52.7 million and TPV for mobile wallet grew 36% yoy to $5.7 billion, which also showed a nice sequential uptick.</p><p>As they continue to roll out more SeaMoney offerings across their markets, I believe the company will continue to report sequential improvements in TPV, much like we saw during Q2. With the company noting that 40% of quarterly active buyers on Shopee in Southeast Asia having used SeaMoney products or services during Q2, I believe there continues to be a long runway of penetration left in the existing customer base. Not to mention the significant growth opportunity with new users and markets.</p><p><b>Valuation</b></p><p>Given that management pulled their E-Commerce for the remainder of the year, it was no surprise to see the stock down over 10% the day of earnings. This means the stock is now down over 65% so far this year, and I believe the ongoing weakness may persist over the coming months until the macro environment clears up a bit.</p><p>Despite the ongoing macro impacts, the strength within the company&#39;s Digital Financial Services was encouraging, though the underlying profitability trends remain questionable for the total business. I believe the company will need to start executing on operational efficiencies to help improve profitability before investors become more comfortable with the company.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5253c2a546c24122ea76c4804fd67a49\" tg-width=\"1280\" tg-height=\"802\" referrerpolicy=\"no-referrer\"/><span>SE EV to Revenues (Forward) data by YCharts</span></p><p>While estimates for 2022 and 2023 revenue likely come down over the next few weeks given the macro uncertainties, valuation has pretty much stalled at 3-4x forward revenue. The stock currently trades around 3.5x forward revenue and it seems possible that valuations remains stuck in this recent trading range until the company executes on their improved efficiency strategy.</p><p>By no means is 3-4x forward revenue an expensive multiple to pay, the combination of decelerating revenue, a challenging and uncertain macro environment, and ongoing adjusted EBITDA losses makes it challenging to justify a higher multiple.</p><p>I do believe that long-term, the company is poised for strong growth trends and improved profitability. However, the stock may remain in the penalty box for now until the company can show progress around these initiatives.</p><p>Longer-term investors are likely to remain rewarded if they hold onto their position throughout this volatility, but indeed there is likely to be ongoing volatility over the coming months and quarters.</p><p>For now, I believe much of the challenging macro factors are priced into the stock and would not be surprised if we saw the bottom approaching. Thus, I believe long-term investors should find this pullback as a good buying opportunity.</p><p><i>This article was written by The Software Side of Life. This article is for reference only.</i></p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Riding This Wave Through Recent Volatility</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Riding This Wave Through Recent Volatility\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-18 10:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.Management also pulled guidance for their E-...</p>\n\n<a href=\"https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1119354607","content_text":"SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.Management also pulled guidance for their E-Commerce segment given the uncertainties.With the stock down 65% year to date and sentiment remaining negative, I believe we may be nearing a bottom.Valuation is currently ~3.5x forward revenue and if the company can execute on their efficiency and profitability targets, long-term investors could be rewarded.SIphotographySea Limited (NYSE:SE) recently reported a challenging Q2 with revenue and adjusted EBITDA coming in below expectations given the ongoing macro pressures on their business.The biggest disappointment during the quarter was the company suspending guidance for their E-Commercesegment in addition to the company reported ongoing declines in their Digital Entertainment quarterly active users and quarterly paying users.SE data by YChartsTo no surprise, the company's stock was down over 10% on disappointing earnings and guidance suspension, which brings the year to date pulldown to 65%.Yes, the macro environment remain very challenged and there is still a lot of uncertainty that may take several quarters or months to play out. However, I believe much of this is currently priced into the stock.Currently, Sea trades at 3.5x forward revenue, which is pretty similar to the recent range of 3-4x forward revenue. The combination of challenging macro, revenue deceleration, and ongoing adjusted EBITDA losses makes it difficult to see multiple expansion in the near-term.However, long-term investors should remain confident in the outlook and could view this recent pullback as a buying opportunity. Given the recent stock weakness and ongoing negative sentiment, I do believe we may be near a bottom for the stock. Even though the stock remains a show-me story, I continue to believe the long-term outlook remains healthy and long-term investors will be rewarded over time.Financial Review and GuidanceDuring the quarter, revenue grew 29% yoy to $2.94 billion, which actually missed expectations by $90 million. While results were certainly weighed down by the macro environment, the underlying trends seemed to be okay. Heading into earrings, I was a little more cautious given the challenging macro environment and warned that upcoming results could disappoint.Sea LimitedOn top of the revenue shortfall, the company reported total adjusted EBITDA loss of $506 million, which is worse than the $24 million last in the year-ago period. Ultimately, this led to the company reporting non-GAAP EPS loss of $1.03, which was worse than expectations.E-CommerceE-Commerce revenue during the quarter continued to decelerate, with revenue growing 51% yoy to $1.7 billion. I previously warned of the difficult growth comparisons coming up with revenue growth being 250% yoy in Q1-2021, 161% yoy in Q2-2021, and 134% yoy in Q3-2021. Not surprisingly, the challenging growth comparable caused another quarter of E-Commerce revenue deceleration.In addition, consumers were faced with a high inflationary environment with wages not keeping pace, thus the real cost of goods has increased quite significantly, placing pressure on discretionary spending.Sea LimitedAlso during the quarter, gross orders grew 42% yoy to 2.0 billion, and while this is up sequentially from 1.9 billion last quarter, the past three quarters have not seen much sequential growth.While the company's Shopee platform continues to receive high marksacross the globe as one of the highest ranked apps, profitability has struggled to gain traction. In fact, adjusted EBITDA loss during the quarter was $648 million, which is almost $70 million worse than the year-ago period. Focus needs to rapidly shift to profitability improvement.And management took this first step during the quarter with adjusted EBITDA loss per order improving 21% yoy. While disappointing to see, it was not overly shocking to see management pull guidance for their E-Commerce segment for the remainder of the year given the several macro headwinds the company is currently experiencing.Given our strategic shifts, coupled with the various macro factors that are hard to predict as mentioned before, we believe it is prudent to maximize our focus on efficiency across our business rather than over-committing which we believe would be ill-advised at this time of uncertainty. As such, we are suspending the full year guidance for Shopee, which we last provided in May. Even though we have stopped providing guidance, our focus for the rest of the year remains very clear, which is to continue to improve efficiency by both deepening monetization and optimizing our cost structure. We will be more tightly managing our operating expenses, such as marketing costs and logistics costs, while also gradually increasing monetization across various income streams with a focus on the high margin ones.Remember, last quarter management downward revised their E-Commerce revenue expectations given the increased uncertainties in the macro environment, especially around the Asia-Pacific regions. And rather than lowering guidance again and remaining uncertain, I think management did the right thing in not providing any guidance.While sentiment likely remains negative around this segment for some time until the company can show improving revenue and profitability trends, I do believe the long-term outlook remains healthy in a normalized environment.Digital EntertainmentDigital Entertainment revenue during the quarter came in at $900 million, which actually declined from the $1.0 billion reported in the year-ago period, largely driven by lower quarterly active users. In addition, bookings during the quarter were $717 million, declining around 40% yoy compared to $1.2 billion in the year-ago period.Sea LimitedLast quarter, management commented on a slowdown in user engagement with quarterly active users declining 5% yoy and quarterly paying users declining 23% yoy. And in Q2, trends continued to deteriorate.During the quarter, quarterly active users declined 15% yoy with quarterly paying users declining 39% yoy. While the company noted that Free Fire continues to be the highest grossing mobile game in Southeast Asia and Latin America for the 12th consecutive quarter, they also talked about some of the macro headwinds they are seeing in the business.While short-term gaming industry trends remain relatively uncertain due to reopening trends as well as the potential impact from macro volatility, we are highly confident in the long-term structural tailwinds of the segment. We expect this to be even more apparent across our markets where we are well positioned and the growth runway for digital entertainment is substantial. We also expect this to support the long-term sustained life span of our existing franchises and platforms.Yes, user engagement trends can move around from quarter to quarter, but these underlying trends are worrisome and the uncertain macro environment paints a challenging picture. With ongoing pressure in quarterly active users and even worse trends in paying users, I believe this part of the business remains a show-me story.In addition, adjusted EBITDA for this segment during the quarter was $334 million, down from $741 million in the year-ago period. This represents 46.5% of bookings during the quarter, which is also down from 62.8% in the year-ago period.Digital Financial ServicesOne area of strength during the quarter was within their Digital Financial Services business, which continues to post impressive growth. Revenue during the quarter grew 214% yoy to $279 million and the company actually improved their adjusted EBITDA loss to $112 million, up from the loss of $155 million in the year-ago period.Sea LimitedWhat drove this strength during the quarter was the combination of ongoing success with quarterly active users and TPV within their mobile wallet.Quarterly active users grew 53% yoy to 52.7 million and TPV for mobile wallet grew 36% yoy to $5.7 billion, which also showed a nice sequential uptick.As they continue to roll out more SeaMoney offerings across their markets, I believe the company will continue to report sequential improvements in TPV, much like we saw during Q2. With the company noting that 40% of quarterly active buyers on Shopee in Southeast Asia having used SeaMoney products or services during Q2, I believe there continues to be a long runway of penetration left in the existing customer base. Not to mention the significant growth opportunity with new users and markets.ValuationGiven that management pulled their E-Commerce for the remainder of the year, it was no surprise to see the stock down over 10% the day of earnings. This means the stock is now down over 65% so far this year, and I believe the ongoing weakness may persist over the coming months until the macro environment clears up a bit.Despite the ongoing macro impacts, the strength within the company's Digital Financial Services was encouraging, though the underlying profitability trends remain questionable for the total business. I believe the company will need to start executing on operational efficiencies to help improve profitability before investors become more comfortable with the company.SE EV to Revenues (Forward) data by YChartsWhile estimates for 2022 and 2023 revenue likely come down over the next few weeks given the macro uncertainties, valuation has pretty much stalled at 3-4x forward revenue. The stock currently trades around 3.5x forward revenue and it seems possible that valuations remains stuck in this recent trading range until the company executes on their improved efficiency strategy.By no means is 3-4x forward revenue an expensive multiple to pay, the combination of decelerating revenue, a challenging and uncertain macro environment, and ongoing adjusted EBITDA losses makes it challenging to justify a higher multiple.I do believe that long-term, the company is poised for strong growth trends and improved profitability. However, the stock may remain in the penalty box for now until the company can show progress around these initiatives.Longer-term investors are likely to remain rewarded if they hold onto their position throughout this volatility, but indeed there is likely to be ongoing volatility over the coming months and quarters.For now, I believe much of the challenging macro factors are priced into the stock and would not be surprised if we saw the bottom approaching. Thus, I believe long-term investors should find this pullback as a good buying opportunity.This article was written by The Software Side of Life. This article is for reference only.","news_type":1},"isVote":1,"tweetType":1,"viewCount":208,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":9943489523,"gmtCreate":1679631388163,"gmtModify":1679631391642,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Great to see&nbsp;","listText":"Great to see&nbsp;","text":"Great to see","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9943489523","repostId":"1151963221","repostType":2,"repost":{"id":"1151963221","weMediaInfo":{"introduction":"Providing stock market headlines, business news, financials and earnings ","home_visible":1,"media_name":"Tiger Newspress","id":"1079075236","head_image":"https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba"},"pubTimestamp":1679580890,"share":"https://ttm.financial/m/news/1151963221?lang=&edition=fundamental","pubTime":"2023-03-23 22:14","market":"us","language":"en","title":"Sea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength","url":"https://stock-news.laohu8.com/highlight/detail?id=1151963221","media":"Tiger Newspress","summary":"Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised","content":"<html><head></head><body><p>Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates &#34;materially&#34; on the Singapore tech giant, due in part to continued e-commerce gains.</p><p><img src=\"https://static.tigerbbs.com/bfdabe7c5768da9a40df7c9f73330bc4\" tg-width=\"824\" tg-height=\"618\" referrerpolicy=\"no-referrer\"/></p><p>Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.</p><p>&#34;E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,&#34; Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.</p><p>&#34;Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,&#34; Garre added.</p><p>Concerning the company&#39;s gaming initiatives, Garre expects that to &#34;scale down&#34; but potentially offer &#34;option value for the future,&#34; while its financial technology segment is starting to improve its profitability.</p><p>Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Stock Jumped As Bernstein Raises Estimates Thanks to E-Commerce Strength\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1079075236\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Tiger Newspress </p>\n<p class=\"h-time\">2023-03-23 22:14</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates &#34;materially&#34; on the Singapore tech giant, due in part to continued e-commerce gains.</p><p><img src=\"https://static.tigerbbs.com/bfdabe7c5768da9a40df7c9f73330bc4\" tg-width=\"824\" tg-height=\"618\" referrerpolicy=\"no-referrer\"/></p><p>Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.</p><p>&#34;E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,&#34; Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.</p><p>&#34;Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,&#34; Garre added.</p><p>Concerning the company&#39;s gaming initiatives, Garre expects that to &#34;scale down&#34; but potentially offer &#34;option value for the future,&#34; while its financial technology segment is starting to improve its profitability.</p><p>Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1151963221","content_text":"Sea Limited (NYSE:SE) shares jumped nearly 6% in morning trading as investment firm Bernstein raised its earnings estimates \"materially\" on the Singapore tech giant, due in part to continued e-commerce gains.Analyst Venugopal Garre nowexpects the company to generate $11.56B in revenue and $9M in net income, up from a previous view of $9.92B and a loss of $1.95B, respectively. He also tweaked estimates for 2024 as well.\"E-commerce is the core engine now, with Sea Ltd demonstrating that a low [average order value] business in an emerging market setting can be profitable,\" Garre wrote in an investor note, pointing to the increase in third-party take rate to 10.3%, which is expected to rise to 11.5% by the end of the year.\"Given the increasing efficiency of take rates which are delivering more profitability as against mere cost offsets earlier, gross profit margins should continue to inch up,\" Garre added.Concerning the company's gaming initiatives, Garre expects that to \"scale down\" but potentially offer \"option value for the future,\" while its financial technology segment is starting to improve its profitability.Earlier this month, Sea Ltd. (SE) shares surged after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.","news_type":1},"isVote":1,"tweetType":1,"viewCount":313,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":215193327407312,"gmtCreate":1693553841972,"gmtModify":1693553847580,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"wrong judgement&nbsp;&nbsp;.. Shopee is bigger than lazada in terms of customer volume or revenue&nbsp;","listText":"wrong judgement&nbsp;&nbsp;.. Shopee is bigger than lazada in terms of customer volume or revenue&nbsp;","text":"wrong judgement .. Shopee is bigger than lazada in terms of customer volume or revenue","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/215193327407312","repostId":"2364219735","repostType":2,"repost":{"id":"2364219735","pubTimestamp":1693553400,"share":"https://ttm.financial/m/news/2364219735?lang=&edition=fundamental","pubTime":"2023-09-01 15:30","market":"us","language":"en","title":"Sea Limited: Decline In Market Share Likely To Hurt The Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2364219735","media":"seekingalpha","summary":"The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in ","content":"<html><head></head><body><ul style=\"\"><li><p>The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.</p></li><li><p>Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in Southeast Asia.</p></li><li><p>Alibaba’s international commerce segment which includes Lazada reported 60% YoY revenue growth and significant improvement in EBITA margin.</p></li><li><p>It would be difficult for Sea Limited to deliver good growth with reasonable profit due to modest investments in first-party logistics.</p></li><li><p>We could see further correction in Sea Limited stock over the next few quarters as the company loses market share in key regions.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3546b4c4790cdb29d0d746aa3616f0b2\" tg-width=\"750\" tg-height=\"500\"/></p><p>Sea Limited (NYSE:SE) stock is down by 30% in the year-to-date despite a massive cost-cutting program which helped the company turn profitable in the last few quarters. Most of the Big Tech companies in the U.S. have also launched major reductions in headcount which helped improve their EPS and also led to a big tech rally in 2023. On the other hand, Sea Limited did not see any gains in the stock price due to a number of new challenges.</p><p>Sea Limited is facing competition from Alibaba&#39;s (BABA) Lazada in Southeast Asia. In the recent quarter, Sea Limited reported YoY revenue growth of 5% while Alibaba&#39;s International Commerce retail segment reported YoY revenue growth of 60%. Alibaba&#39;s International Commerce segment also reduced losses by 70% and is now close to being profitable. CNBC mentioned that Sea Limited&#39;s management is now trying to pivot back to growth while putting profitability as a lower priority.</p><p>This continuous back and forth between growth and profitability shows the dilemma facing Sea Limited. It is unlikely that Sea Limited will be able to deliver sustainable growth with healthy profits in the near term which will continue to put downward pressure on the stock. Despite the recent correction, it is better to use a wait-and-watch strategy with this stock.</p><p>Due to these challenges, the stock should have a Hold rating in my opinion. Sea Limited has been able to surprise Wall Street in the past by launching very popular games and services. If the management is able to another profitable segment in the next few quarters, we could see a strong bullish momentum in the stock.</p><h2 id=\"id_3660485309\">Losing market share</h2><p>The rapid growth of Sea Limited during the pandemic was funded by being a loss leader. The company invested heavily in attracting new customers with higher discounts and giving incentives to sellers. This inevitably led to massive losses in the company. As the tech boom ended in late 2021, Sea Limited&#39;s stock went into a massive bear phase and we have seen the stock decline by a staggering 90% since hitting the peak in 2021.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/16c99a52581ceac24c37dbdd53cd45ae\" tg-width=\"972\" tg-height=\"439\"/></p><p>Ycharts</p><p></p><p>Figure 1: Sea Limited&#39;s YoY revenue growth has fallen behind Alibaba.</p><p>Last year, Sea Limited started pursuing profitability by lowering incentives, hiking commission rates, and cutting headcount. This has helped the company become profitable but has caused a significant decline in market share. The e-commerce segment in Southeast Asia and other regions has been showing promising growth. According to recent earnings results, Alibaba&#39;s International Commerce retail segment has jumped by 60% on a YoY basis. A bulk of Alibaba&#39;s international retail revenue comes from Lazada which is in direct competition with Sea Limited.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/769666f7bde2531cfae7fc56b7814efe\" tg-width=\"640\" tg-height=\"98\"/></p><p>Company Filings</p><p></p><p>Figure 2: Increase in Alibaba&#39;s international retail revenue.</p><p>Alibaba is also injecting additional funds into Lazada. Recently, it has added $845 million which should give Lazada enough firepower to attract more customers and take market share away from Sea Limited.</p><h2 id=\"id_2672636179\">Return to massive losses</h2><p>Sea Limited&#39;s management has mentioned that they will start prioritizing revenue growth in the next few quarters. This will lead the company back to losses. One of the reasons why Wall Street has not turned bullish towards the stock despite recent profitability is the lack of sustainable long-term profitability. The only way Sea Limited can improve its revenue growth is by giving bigger incentives to sellers and customers.</p><p>Alibaba is looking to spinoff the company into six different businesses. One of these would be the international business vertical. It is important for Alibaba to show strong metrics in a key international region before spinning off the international business. We could see Alibaba prioritize growth in Lazada for the next few quarters by making higher investments in logistics and improving the market share. This will reduce the ability of Sea Limited to deliver strong revenue growth and it could eat away the small profitability which the company has recently reported.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/625eebb94c6ca0c274115d9c89fa4669\" tg-width=\"978\" tg-height=\"410\"/></p><p>Ycharts</p><p></p><p>Figure 3: Forward revenue and EPS estimates of Sea Limited.</p><p>The forward revenue estimates of Sea Limited are declining as the YoY revenue growth has reduced. As shown in the above image, the consensus EPS estimate for 2 fiscal years ahead is $3.20. Sea Limited&#39;s stock is trading at 12 times the EPS estimate for 2 fiscal years ahead. This seems a modest valuation multiple. However, we could see a substantial decrease in EPS and possibly a restart of big losses as the company tries to ramp up revenue growth and protect its market share.</p><p>Investors looking to make an entry at the current price should look at the possibility and scale of future losses in Sea Limited. A higher revenue base and intense competition will prevent Sea Limited from showing the YoY revenue growth it reported during the pandemic which helped the stock gain a massive bull run. At the same time, we could see a significant decline in margins in the near term.</p><h2 id=\"id_2653114293\">Upside potential for Sea Limited</h2><p>Despite the above-mentioned challenges, Sea Limited could still surprise with a stronger-than-expected earnings result in the next few quarters. This would require the company to increase the cost-cutting measures. It would also need to be very prudent in future incentives to attract customers and merchants. The management has mentioned that they would be prioritising revenue growth which is one of the reasons why it could be difficult to contain spiralling costs.</p><p>In the past few years, Sea Limited has been able to launch new services and games which were highly popular and profitable for the company. If the company launches another popular game like Free Fire, it could change the growth and EPS trajectory for the company giving the stock a strong bullish sentiment.</p><h2 id=\"id_3080090989\">Impact on Sea Limited stock</h2><p>The e-commerce business is to a large extent a winner-takes-all market. We have seen this in the U.S. as well as in other regions like China, India, and Europe. Sea Limited has spent massive resources on incentives, marketing, and trying to attract customers instead of building a first-party logistics network that can rival bigger players. A lack of a strong moat will hurt the company as most of the tailwind due to the pandemic has disappeared.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c33deb295388278bc82d4a3f6bc40e58\" tg-width=\"976\" tg-height=\"494\"/></p><p>Ycharts</p><p></p><p>Figure 4: High PE ratio of SE despite lower revenue growth.</p><p>Sea Limited&#39;s PE ratio is still quite high while the company is reporting single-digit YoY revenue growth. As mentioned above, it is highly likely that we will see a decline in margins or big losses from Sea Limited in the next few quarters as the company tries to reignite its revenue growth. It would be better for investors to wait and watch for another quarter or two before making an entry into this stock.</p><h2 id=\"id_66661972\">Investor takeaway</h2><p>Sea Limited reported 5% YoY revenue growth which was significantly lower than the 60% YoY revenue growth reported by Alibaba&#39;s International commerce retail business. Alibaba&#39;s Lazada is a major competitor for Sea Limited and Alibaba is injecting massive resources in order to improve the market share of Lazada.</p><p>Sea Limited&#39;s management is trying to restart revenue growth which could lead to a decline in margins and bigger losses. The revenue base of Sea Limited is quite large compared to the pre-pandemic period which will make it more difficult to report high YoY revenue growth. The forward EPS estimate seems quite unrealistic as the company is trying to ramp up revenue growth. I think there are a lot of risks with the current strategy of the management and any future headwind could cause further correction in the stock.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Decline In Market Share Likely To Hurt The Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Decline In Market Share Likely To Hurt The Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-01 15:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in ...</p>\n\n<a href=\"https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0251143029.SGD":"Fidelity ASEAN A-SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","LU0210637038.USD":"HSBC GIF THAI EQUITY \"AD\" INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","LU1688375341.USD":"贝莱德中国灵活股票基金","BK4585":"ETF&股票定投概念","BK4085":"互动家庭娱乐","LU0532188223.SGD":"JPMorgan Funds - ASEAN Equity A (acc) SGD","BK4566":"资本集团","BK4504":"桥水持仓","BK4505":"高瓴资本持仓","BK4551":"寇图资本持仓","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","BK4220":"综合零售","LU0651946864.USD":"贝莱德新兴市场股票收益A2","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","LU1051768304.USD":"贝莱德新兴市场股票收益A6","SG9999002620.SGD":"LionGlobal South East Asia SGD","SG9999002406.SGD":"利安新加坡信托基金","BK4526":"热门中概股","BK4538":"云计算","LU0251143458.SGD":"Fidelity Emerging Markets A-SGD","LU1046422090.SGD":"Fidelity Pacific A-SGD","SE":"Sea Ltd","BK4527":"明星科技股","LU1515016050.SGD":"Blackrock Emerging Markets Equity Income A6 SGD-H","BK4122":"互联网与直销零售","SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","BK4535":"淡马锡持仓","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","SG9999013478.USD":"利安新加坡股息基金","BK4558":"双十一","IE00B0JY6N72.USD":"PINEBRIDGE GLOBAL EMERGING MARKETS FOCUS EQUITY \"A\" (USD) ACC","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","SG9999002604.SGD":"LionGlobal Singapore/Malaysia SGD","BK4534":"瑞士信贷持仓","BK4548":"巴美列捷福持仓","BK4531":"中概回港概念","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4554":"元宇宙及AR概念","BK4565":"NFT概念","SG9999001135.SGD":"United ASEAN Fund SGD","LU0310800965.SGD":"FTIF - Templeton Global Balanced A Acc SGD"},"source_url":"https://seekingalpha.com/article/4632325-sea-limited-decline-market-share-hurt-the-stock","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2364219735","content_text":"The recent earnings result shows that Sea Limited has lost its growth momentum in order to improve profitability.Sea Limited is losing market share due to intense competition from Alibaba’s Lazada in Southeast Asia.Alibaba’s international commerce segment which includes Lazada reported 60% YoY revenue growth and significant improvement in EBITA margin.It would be difficult for Sea Limited to deliver good growth with reasonable profit due to modest investments in first-party logistics.We could see further correction in Sea Limited stock over the next few quarters as the company loses market share in key regions.Sea Limited (NYSE:SE) stock is down by 30% in the year-to-date despite a massive cost-cutting program which helped the company turn profitable in the last few quarters. Most of the Big Tech companies in the U.S. have also launched major reductions in headcount which helped improve their EPS and also led to a big tech rally in 2023. On the other hand, Sea Limited did not see any gains in the stock price due to a number of new challenges.Sea Limited is facing competition from Alibaba's (BABA) Lazada in Southeast Asia. In the recent quarter, Sea Limited reported YoY revenue growth of 5% while Alibaba's International Commerce retail segment reported YoY revenue growth of 60%. Alibaba's International Commerce segment also reduced losses by 70% and is now close to being profitable. CNBC mentioned that Sea Limited's management is now trying to pivot back to growth while putting profitability as a lower priority.This continuous back and forth between growth and profitability shows the dilemma facing Sea Limited. It is unlikely that Sea Limited will be able to deliver sustainable growth with healthy profits in the near term which will continue to put downward pressure on the stock. Despite the recent correction, it is better to use a wait-and-watch strategy with this stock.Due to these challenges, the stock should have a Hold rating in my opinion. Sea Limited has been able to surprise Wall Street in the past by launching very popular games and services. If the management is able to another profitable segment in the next few quarters, we could see a strong bullish momentum in the stock.Losing market shareThe rapid growth of Sea Limited during the pandemic was funded by being a loss leader. The company invested heavily in attracting new customers with higher discounts and giving incentives to sellers. This inevitably led to massive losses in the company. As the tech boom ended in late 2021, Sea Limited's stock went into a massive bear phase and we have seen the stock decline by a staggering 90% since hitting the peak in 2021.YchartsFigure 1: Sea Limited's YoY revenue growth has fallen behind Alibaba.Last year, Sea Limited started pursuing profitability by lowering incentives, hiking commission rates, and cutting headcount. This has helped the company become profitable but has caused a significant decline in market share. The e-commerce segment in Southeast Asia and other regions has been showing promising growth. According to recent earnings results, Alibaba's International Commerce retail segment has jumped by 60% on a YoY basis. A bulk of Alibaba's international retail revenue comes from Lazada which is in direct competition with Sea Limited.Company FilingsFigure 2: Increase in Alibaba's international retail revenue.Alibaba is also injecting additional funds into Lazada. Recently, it has added $845 million which should give Lazada enough firepower to attract more customers and take market share away from Sea Limited.Return to massive lossesSea Limited's management has mentioned that they will start prioritizing revenue growth in the next few quarters. This will lead the company back to losses. One of the reasons why Wall Street has not turned bullish towards the stock despite recent profitability is the lack of sustainable long-term profitability. The only way Sea Limited can improve its revenue growth is by giving bigger incentives to sellers and customers.Alibaba is looking to spinoff the company into six different businesses. One of these would be the international business vertical. It is important for Alibaba to show strong metrics in a key international region before spinning off the international business. We could see Alibaba prioritize growth in Lazada for the next few quarters by making higher investments in logistics and improving the market share. This will reduce the ability of Sea Limited to deliver strong revenue growth and it could eat away the small profitability which the company has recently reported.YchartsFigure 3: Forward revenue and EPS estimates of Sea Limited.The forward revenue estimates of Sea Limited are declining as the YoY revenue growth has reduced. As shown in the above image, the consensus EPS estimate for 2 fiscal years ahead is $3.20. Sea Limited's stock is trading at 12 times the EPS estimate for 2 fiscal years ahead. This seems a modest valuation multiple. However, we could see a substantial decrease in EPS and possibly a restart of big losses as the company tries to ramp up revenue growth and protect its market share.Investors looking to make an entry at the current price should look at the possibility and scale of future losses in Sea Limited. A higher revenue base and intense competition will prevent Sea Limited from showing the YoY revenue growth it reported during the pandemic which helped the stock gain a massive bull run. At the same time, we could see a significant decline in margins in the near term.Upside potential for Sea LimitedDespite the above-mentioned challenges, Sea Limited could still surprise with a stronger-than-expected earnings result in the next few quarters. This would require the company to increase the cost-cutting measures. It would also need to be very prudent in future incentives to attract customers and merchants. The management has mentioned that they would be prioritising revenue growth which is one of the reasons why it could be difficult to contain spiralling costs.In the past few years, Sea Limited has been able to launch new services and games which were highly popular and profitable for the company. If the company launches another popular game like Free Fire, it could change the growth and EPS trajectory for the company giving the stock a strong bullish sentiment.Impact on Sea Limited stockThe e-commerce business is to a large extent a winner-takes-all market. We have seen this in the U.S. as well as in other regions like China, India, and Europe. Sea Limited has spent massive resources on incentives, marketing, and trying to attract customers instead of building a first-party logistics network that can rival bigger players. A lack of a strong moat will hurt the company as most of the tailwind due to the pandemic has disappeared.YchartsFigure 4: High PE ratio of SE despite lower revenue growth.Sea Limited's PE ratio is still quite high while the company is reporting single-digit YoY revenue growth. As mentioned above, it is highly likely that we will see a decline in margins or big losses from Sea Limited in the next few quarters as the company tries to reignite its revenue growth. It would be better for investors to wait and watch for another quarter or two before making an entry into this stock.Investor takeawaySea Limited reported 5% YoY revenue growth which was significantly lower than the 60% YoY revenue growth reported by Alibaba's International commerce retail business. Alibaba's Lazada is a major competitor for Sea Limited and Alibaba is injecting massive resources in order to improve the market share of Lazada.Sea Limited's management is trying to restart revenue growth which could lead to a decline in margins and bigger losses. The revenue base of Sea Limited is quite large compared to the pre-pandemic period which will make it more difficult to report high YoY revenue growth. The forward EPS estimate seems quite unrealistic as the company is trying to ramp up revenue growth. I think there are a lot of risks with the current strategy of the management and any future headwind could cause further correction in the stock.","news_type":1},"isVote":1,"tweetType":1,"viewCount":346,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":211934111969304,"gmtCreate":1692772598232,"gmtModify":1692772604207,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Let's watch it&nbsp;","listText":"Let's watch it&nbsp;","text":"Let's watch it","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/211934111969304","repostId":"2361643366","repostType":2,"repost":{"id":"2361643366","pubTimestamp":1692770565,"share":"https://ttm.financial/m/news/2361643366?lang=&edition=fundamental","pubTime":"2023-08-23 14:02","market":"us","language":"en","title":"Is Sea Limited's Recent Slump Warranted?","url":"https://stock-news.laohu8.com/highlight/detail?id=2361643366","media":"GuruFocus.com","summary":"Singapore-based technology firm, Sea Ltd  faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd 's salient variables.GuruFocus has detected 2 Warning Sign with C. Click here to check it out.Citigroup Inc 's Alicia Yap adjusted Sea Ltd 's target price to $50 per share from a previous $98, citing that Sea's battle to maintain its market share is starting. In my view, Yap's analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore's consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap's take.Further, JPMorgan Chase & Co  analyst, Ranjan Sharma downgraded Sea Ltd 's stock to neu","content":"<html><head></head><body><p>Singapore-based technology firm, <a href=\"https://laohu8.com/S/SE\">Sea Ltd</a> faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.</p><p>Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd (NYSE:SE)&#39;s salient variables.</p><p>Herewith are a few aspects to consider.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/207c690cf3bb335bb5b1b555c09f25f0\" tg-width=\"2764\" tg-height=\"512\"/></p><h3 id=\"id_88448883\">Details of the bearish calls from Wall Street</h3><p>Sea Ltd experienced two noticeable downgrades from Wall Street after its second-quarter earnings release. The first downgrade was from Citigroup Inc (NYSE:C), based on a top-down vantage point.</p><p>Citigroup Inc&#39;s Alicia Yap adjusted Sea Ltd (NYSE:SE)&#39;s target price to $50 per share from a previous $98, citing that Sea&#39;s battle to maintain its market share is starting. In my view, Yap&#39;s analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore&#39;s consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap&#39;s take.</p><h4 id=\"id_1357262475\">Further Analyst Downgrades</h4><p>Further, JPMorgan Chase &amp; Co analyst, Ranjan Sharma downgraded Sea Ltd&#39;s stock to neutral from overweight and assigned a price target of $45.</p><p>According to Sharma: &#34;SE&#39;s decision to accelerate e-commerce investments in growth is likely to materially weigh on its earnings and share price in the near term,&#34; he added that &#34;SE could potentially incur heavy investments in 2H23 resulting in earnings decline in [the second-half].&#34;</p><p>Sharma&#39;s argument is somewhat questionable. I say this because although the stock market tends to price structural earnings slumps, it typically does not consider short-term re-investment-driven cost restructurings disadvantageous. Nevertheless, JPMorgan Chase &amp; Co (NYSE:JPM)&#39;s outlook might have a significant impact on the market, regardless of the ground truth.</p><h3 id=\"id_872318156\">Sea&#39;s second-quarter earnings miss</h3><p>Sea Ltd (NYSE:SE)&#39;s stock shed more than a quarter of its market value on the morning of August 15th after its second-quarter earnings report was publically disseminated. The stock has not recovered since then, remaining at a similar price level ever since, suggesting the market is net bearish on the asset and that post-earnings trading probably wasn&#39;t an overreaction.</p><p>It is unclear why Sea Ltd (NYSE:SE)&#39;s stock dropped. For example, the firm passed its earnings estimate by eight cents per share. Sure, Sea&#39;s second-quarter revenue fell short by $152.14 million; however, the firm still experienced 5.2% year-on-year growth during a trying economic period.</p><h4 id=\"id_3039364011\">Dissecting Sea Ltd&#39;s Second-Quarter Results</h4><p>Let&#39;s dissect Sea Ltd (NYSE:SE)&#39;s second-quarter results.</p><p>Sea reported a second-quarter gross profit of $1.5 billion, a 33.1% increase. Moreover, the firm turned a profit of $331 million, a significant contrast to its 2022 second-quarter loss of $931.2 million.</p><p>Much of the company&#39;s growth stemmed from its &#34;Digital Financial Services&#34; segment, as the unit achieved $427.9 million in quarterly revenue, displaying year-on-year growth worth 53.4%.</p><p>Furthermore, although Sea Ltd&#39;s second-quarter digital entertainment revenue receded by 1.9% year-on-year, its e-commerce sales remained robust, tabling 20.6% in year-over-year growth to achieve $2.1 billion in revenue.</p><p>In essence, earnings results-driven Sea Ltd&#39;s sell-off seems overcooked, especially when considering how the firm&#39;s quarterly results stack up against other firms&#39; in today&#39;s trying economy.</p><h3 id=\"id_2885888596\">Key drivers</h3><p>As mentioned earlier in the article, Sea Ltd is participating in an industry that is set to grow at a compound annual growth rate of 11.70% until 2027. In addition, and as illustrated in the diagram below, Singapore&#39;s economic trend growth is forecasted to stay above 2% per year until 2028, providing an additional tailwind to Sea Ltd (NYSE:SE), especially as much of the economic growth is forecasted to stem from developments within the technology sector.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ee33c273ffa6987c540a32c4bf110af1\" alt=\"Source: Statista\" title=\"Source: Statista\" tg-width=\"1364\" tg-height=\"866\"/><span>Source: Statista</span></p><p>Another factor to consider is Sea Ltd (NYSE:SE)&#39;s potential to achieve synergetic growth. For instance, the company&#39;s e-commerce and digital financial services could coalesce and create cost-cutting paired with cross-sales synergies. Although Alicia Yap of Citigroup Inc (NYSE:C) argues that Sea&#39;s market share will be tested, I believe we should consider that few regional consumer technology firms have established the level of synergies that Sea has.</p><h3 id=\"id_3947784163\">Valuation</h3><p>A collective assessment of Sea Ltd (NYSE:SE)&#39;s valuation metrics paints a worrisome picture. Firstly, the stock&#39;s price-to-sales ratio of 1.72 ranks within the 32nd industry percentile, suggesting a relative value mismatch. On top of that, Sea&#39;s earnings yield of 2.17% is unconvincing for a growth stock.</p><p>Many might wonder why I outlined the stock&#39;s price-to-sales and earnings yield, in particular.</p><p>Well, the rationale behind it is to consider that Sea Ltd (NYSE:SE) is a growth stock, in which case, profitability metrics such as the price-to-earnings and price-to-book provide little input; In fact, a top-line observation or growth metrics such as the earnings yield provide far better insight.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/589547d4411dae651796966fc6eaa0b4\" tg-width=\"886\" tg-height=\"470\"/></p><h3 id=\"id_3881665855\">Final word</h3><p>The negative outlook on Sea Ltd (NYSE:SE) from Wall Street analysts and investors can be contested by observing the finer details of the firm&#39;s results. Despite Sea&#39;s worrisome valuation metrics, its stock&#39;s recent sell-off seems unjustified, especially given the aforementioned coupled with the synergies embedded into its business model.</p></body></html>","source":"lsy1605318755435","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is Sea Limited's Recent Slump Warranted?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs Sea Limited's Recent Slump Warranted?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-08-23 14:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Singapore-based technology firm, Sea Ltd faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates ...</p>\n\n<a href=\"https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.gurufocus.com/news/2069942/is-seas-recent-slump-warranted","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2361643366","content_text":"Singapore-based technology firm, Sea Ltd faces significant headwinds amid various downgrades from Wall Street analysts following its second-quarter earnings results.Market sentiment often dominates reality as the momentum of the masses is difficult to deflect. However, in an attempt to assess the velocity and sustainability of the sentiment, I decided to do a deeper dive into the status of Sea Ltd (NYSE:SE)'s salient variables.Herewith are a few aspects to consider.Details of the bearish calls from Wall StreetSea Ltd experienced two noticeable downgrades from Wall Street after its second-quarter earnings release. The first downgrade was from Citigroup Inc (NYSE:C), based on a top-down vantage point.Citigroup Inc's Alicia Yap adjusted Sea Ltd (NYSE:SE)'s target price to $50 per share from a previous $98, citing that Sea's battle to maintain its market share is starting. In my view, Yap's analysis is objective as industry consolidation will likely occur as the company matures; on the other end, Singapore's consumer internet industry is set for an 11.70% annualized growth rate until 2027, which balances out Yap's take.Further Analyst DowngradesFurther, JPMorgan Chase & Co analyst, Ranjan Sharma downgraded Sea Ltd's stock to neutral from overweight and assigned a price target of $45.According to Sharma: \"SE's decision to accelerate e-commerce investments in growth is likely to materially weigh on its earnings and share price in the near term,\" he added that \"SE could potentially incur heavy investments in 2H23 resulting in earnings decline in [the second-half].\"Sharma's argument is somewhat questionable. I say this because although the stock market tends to price structural earnings slumps, it typically does not consider short-term re-investment-driven cost restructurings disadvantageous. Nevertheless, JPMorgan Chase & Co (NYSE:JPM)'s outlook might have a significant impact on the market, regardless of the ground truth.Sea's second-quarter earnings missSea Ltd (NYSE:SE)'s stock shed more than a quarter of its market value on the morning of August 15th after its second-quarter earnings report was publically disseminated. The stock has not recovered since then, remaining at a similar price level ever since, suggesting the market is net bearish on the asset and that post-earnings trading probably wasn't an overreaction.It is unclear why Sea Ltd (NYSE:SE)'s stock dropped. For example, the firm passed its earnings estimate by eight cents per share. Sure, Sea's second-quarter revenue fell short by $152.14 million; however, the firm still experienced 5.2% year-on-year growth during a trying economic period.Dissecting Sea Ltd's Second-Quarter ResultsLet's dissect Sea Ltd (NYSE:SE)'s second-quarter results.Sea reported a second-quarter gross profit of $1.5 billion, a 33.1% increase. Moreover, the firm turned a profit of $331 million, a significant contrast to its 2022 second-quarter loss of $931.2 million.Much of the company's growth stemmed from its \"Digital Financial Services\" segment, as the unit achieved $427.9 million in quarterly revenue, displaying year-on-year growth worth 53.4%.Furthermore, although Sea Ltd's second-quarter digital entertainment revenue receded by 1.9% year-on-year, its e-commerce sales remained robust, tabling 20.6% in year-over-year growth to achieve $2.1 billion in revenue.In essence, earnings results-driven Sea Ltd's sell-off seems overcooked, especially when considering how the firm's quarterly results stack up against other firms' in today's trying economy.Key driversAs mentioned earlier in the article, Sea Ltd is participating in an industry that is set to grow at a compound annual growth rate of 11.70% until 2027. In addition, and as illustrated in the diagram below, Singapore's economic trend growth is forecasted to stay above 2% per year until 2028, providing an additional tailwind to Sea Ltd (NYSE:SE), especially as much of the economic growth is forecasted to stem from developments within the technology sector.Source: StatistaAnother factor to consider is Sea Ltd (NYSE:SE)'s potential to achieve synergetic growth. For instance, the company's e-commerce and digital financial services could coalesce and create cost-cutting paired with cross-sales synergies. Although Alicia Yap of Citigroup Inc (NYSE:C) argues that Sea's market share will be tested, I believe we should consider that few regional consumer technology firms have established the level of synergies that Sea has.ValuationA collective assessment of Sea Ltd (NYSE:SE)'s valuation metrics paints a worrisome picture. Firstly, the stock's price-to-sales ratio of 1.72 ranks within the 32nd industry percentile, suggesting a relative value mismatch. On top of that, Sea's earnings yield of 2.17% is unconvincing for a growth stock.Many might wonder why I outlined the stock's price-to-sales and earnings yield, in particular.Well, the rationale behind it is to consider that Sea Ltd (NYSE:SE) is a growth stock, in which case, profitability metrics such as the price-to-earnings and price-to-book provide little input; In fact, a top-line observation or growth metrics such as the earnings yield provide far better insight.Final wordThe negative outlook on Sea Ltd (NYSE:SE) from Wall Street analysts and investors can be contested by observing the finer details of the firm's results. Despite Sea's worrisome valuation metrics, its stock's recent sell-off seems unjustified, especially given the aforementioned coupled with the synergies embedded into its business model.","news_type":1},"isVote":1,"tweetType":1,"viewCount":106,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":221969824034944,"gmtCreate":1695219042705,"gmtModify":1695219047242,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/221969824034944","repostId":"2368901380","repostType":2,"repost":{"id":"2368901380","pubTimestamp":1695197400,"share":"https://ttm.financial/m/news/2368901380?lang=&edition=fundamental","pubTime":"2023-09-20 16:10","market":"us","language":"en","title":"Sea Limited: Easy To Sea","url":"https://stock-news.laohu8.com/highlight/detail?id=2368901380","media":"Seeking Alpha","summary":"Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has","content":"<html><head></head><body><ul style=\"\"><li><p>Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.</p></li><li><p>Over roughly the last century of American capitalism, the market has demonstrated an especial penchant for doing so to commerce platforms.</p></li><li><p>It did so to Walmart in 1973-74. It did so to Lowe&#39;s in the 1980s. It did so to Amazon in the 2000s. It did so to <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> in 2008-2009.</p></li><li><p>And, today, once again, the market has curiously traded down one of the best commerce platforms on earth in something akin to a fevered, depressive panic.</p></li><li><p>Today, I will quantitatively demonstrate for you the irrationality behind this price action, and, in short, I believe Sea could prove to be a 10-bagger in the decade ahead.</p></li></ul><h2 id=\"id_2336691259\">It&#39;s Easy: Concisely Articulating The Sea Thesis</h2><ol start=\"1\" style=\"\"><li><p><em>Shopee remains the #1 ecommerce platform in SE Asia. It is the only profitable one. Lazada is the #2, and this is a Rocket Internet Startup that existed before Shopee but has since been surpassed by Shopee by a very long shot. Shopee is indisputably the best ecommerce platform in the region, and, again, it&#39;s the only profitable platform.</em></p></li><li><p><em>In the U.S., Walmart, Amazon, Target, Lowe&#39;s, Home Depot, Dollar General, grocery stores, and department stores have all co-existed and created trillions in equity value over the last 75 years.</em></p></li><li><p><em>In Latin America, MercadoLibre has co-existed with a host of rivals, including Amazon quite formidably in Latin America, and it has still done very well profitably. Notably, MercadoLibre only has 35% market share of total ecommerce GMV in Latin America, while Sea has 50% in SE Asia; yet there&#39;s no fevered panic over MercadoLibre&#39;s market share.</em></p></li><li><p><em>Sea has $7.7B in cash &amp; equivalents; $3.3B in convertible debt. This is a massive amount of resources with which it can further dominate the aforementioned unprofitable and historically stagnant/inferior competition. Sea also generates robust free cash flow quarterly now alongside its giant liquidity position on its balance sheet.</em></p></li><li><p><em>Sea owns Garena, which is now returning to growth. This is like Sea&#39;s AWS (AMZN) in a sense, giving it an advantage over rivals. Garena could also experience sales growth in the future, especially in light of Free Fire being unbanned in India recently. Garena produces about $1B in annualized cash flows for the conglomerate.</em></p></li><li><p><em>Sea has a FinTech business (Sea Money) with about 60M users on the platform. This alone could be worth $20B to $30B, and Sea currently trades at ~$18B in enterprise value (preposterous in my opinion). This is a rapidly growing, free cash flow generative business that provides core financial infrastructure to SE Asia&#39;s digital economy alongside a couple other rivals, including GoPay (GOTO) and OVO (GRAB).</em></p></li><li><p><em>SE Asia has a very, very long runway for growth demographically. The region is still in the very early innings of economic growth and development.</em></p></li><li><p><em>Sea has demonstrated an ability to successfully and organically (meaning without acquiring) build new products and scale them rapidly. While it&#39;s built three incredibly successful franchises over the last decade or so, i.e., Garena (500M+ users and highly profitable), Shopee (#1 ecom platform in SE Asia and only profitable one), and Sea Money (~60M users and profitable), it&#39;s highly likely that it creates new and compelling products in the future as well, adding to the 20-30% annualized growth I believe the conglomerate will achieve in the decade ahead, once we emerge from the current rate hiking cycle and Asian economic woes broadly, both of which have served to, on some level, halt the growth of SE Asia&#39;s tech sector momentarily.</em></p></li><li><p><em>Lastly, SE Asia&#39;s demographics are very favorable for sustained, elevated growth for Sea in the decades ahead (depicted below).</em></p></li><li><p><em>I believe a 10 bagger over the next 10 years will be seen as base case for the business.</em></p></li></ol><h3 id=\"id_1939531541\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>We will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.</p><h3 id=\"id_1441051994\">SE Asia Has A Long Runway For Growth And Development Still Ahead</h3><p>I understand that the data below is from 2017, but it&#39;s worth noting the total digital consumer TAM, as well as the projections for ecommerce growth, validation of which we can see in the ecommerce GMV chart shared just above.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cd94f173610ebc3a5baba659a92725bd\" alt=\"Sea Ltd.&#39;s F-1\" title=\"Sea Ltd.&#39;s F-1\" tg-width=\"640\" tg-height=\"248\"/><span>Sea Ltd.&#39;s F-1</span></p><p>Over the last 5-7 years, Shopee&#39;s market share has grown within a rapidly growing ecommerce GMV TAM.</p><p>In a very worst case scenario, Shopee&#39;s market share may shrink, but, in light of the growth of SE Asia&#39;s ecommerce TAM, Shopee could very well continue to grow at elevated rates for decades to come.</p><h2 id=\"id_1212589788\">Understanding The Share Price Dynamics For Sea Ltd.</h2><p>I would say there&#39;s a number of approaches I could take to illustrate why Sea Ltd. (NYSE:SE) went from trading at $350/share to nearly $35/share as of today.</p><p>The same number of approaches could be taken in understanding why its retail predecessors, e.g., Walmart (WMT), Lowe&#39;s (LOW), or Amazon (AMZN), likewise experienced fairly stunning share price declines early in their lifecycles.</p><p>Today, I will share with you data that, in my estimation, definitively delineates why Sea and many of the former market darlings have experienced such breathtaking declines over the last 18 months or so.</p><p>Let&#39;s start with the underlying market mechanisms that are not idiosyncratic to Sea. These mechanisms that we will review have created the declines we&#39;ve seen from businesses like Tesla (TSLA), Affirm (AFRM), Meta (META) and Airbnb (ABNB) over the last 12 months.</p><p>I&#39;ve shared the following chart often, but it certainly bears re-sharing and repeating:</p><h4 id=\"id_2907407713\">The Prices Of Equities Overshoot To The Upside And Overshoot To The Downside</h4><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ff6ac0b344710b22e1e69f1504babaa9\" alt=\"Truemind Capital\" title=\"Truemind Capital\" tg-width=\"640\" tg-height=\"380\"/><span>Truemind Capital</span></p><p>This chart is so ubiquitously shared and repeated on the internet for a reason:</p><p>It represents genuine reality of what you will experience in owning a given business/stock.</p><p>And we can see these precise dynamics playing out for Sea, as well as Adyen (OTCPK:ADYEY) and many, many other businesses in the market today.</p><h4 id=\"id_4285585971\">Roughly Depicting The True Intrinsic Value Of Sea Based On My Estimation Of The Growth Of Free Cash Flow Per Share</h4><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/57cbad23aa9bcf1dee4a0075f181ef3f\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"1280\" tg-height=\"802\"/><span>YCharts</span></p><h3 id=\"id_2734695393\">Roughly Depicting The True Intrinsic Value Of Adyen Based On My Estimation Of The Growth Of Free Cash Flow Per Share</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ad805058bef113f4d42f987c320000d3\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"1280\" tg-height=\"802\"/><span>YCharts</span></p><p>The charts align almost perfectly identically with the &#34;ubiquitously shared teaching chart,&#34; and this is no coincidence. This is perfectly how the market operates and prices equities.</p><p>&#34;As it was in the beginning, is now, and ever shall be, world without end. Amen.&#34;</p><p>The market&#39;s pricing of equities overshoots to the upside (too much exuberance) and overshoots to the downside (too much despair), and it has done this since the dawn of asset markets. The Great Warren Buffett has the market&#39;s behavior in this respect as the behavior of a &#34;drunken psycho,&#34; and we can certainly see and, for those that own Sea and Adyen, feel why.</p><h2 id=\"id_315136246\">Interest Rates &amp; Growth Rates</h2><p>To delve deeper into the underlying mechanisms driving the, as Mr. Buffett would call them, &#34;drunken, psychotic&#34; pricing dynamics of the market, we should consider how interest rates and individual company growth rates have impacted the valuations of Sea and Adyen.</p><p>When interest rates rise (i.e., the cost of credit in the economy rise), valuations decline, all else being equal (we will consider growth rates and their impact on valuations in a moment).</p><p>When interest rates decline (i.e., the cost of credit in the economy declines), valuations rise, all else being equal.</p><p>Below, we can see how a dramatic decline in interest rates created something akin to a &#34;zero gravity environment&#34; for the valuation of Sea (I will include Adyen as well to provide further context for this exercise).</p><h3 id=\"id_1263768699\">Sea&#39;s Valuation And The 10 Year Treasury Rate</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/edff2244b3aafc5ec72705c59f7127d1\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>As interest rates have risen at the fastest rate in the history of America, the precise inverse has occurred:</p><p>Instead of a zero gravity environment for Sea, it has experienced 2x gravity for its valuation and correspondingly its stock price.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ae087bc5ec40ea0953db0befae07bd7b\" alt=\"Visual Capitalist\" title=\"Visual Capitalist\" tg-width=\"640\" tg-height=\"829\"/><span>Visual Capitalist</span></p><p>If we couple this dynamic with the natural tendency of humans in crowds to panic and flee (sell), thereby creating market crashes, we can better understand why Sea&#39;s share price has been in free fall, despite reporting a fantastic Q2, in which it generated very healthy free cash flow and GAAP net income, grew sales, remained the #1 and only profitable ecommerce platform in SE Asia, grew its profitable FinTech business, and stabilized/grew its gaming business&#39; users.</p><p>We will explore Sea&#39;s quarter in following sections, but it certainly is worth noting in this valuation exercise that Sea reported an objectively fantastic Q2 2023 earnings. It could not have done better in my eyes.</p><p>Turning to Adyen, we can see precisely the same valuation dynamics, precipitated by higher interest rates, playing out.</p><h3 id=\"id_963054273\">Adyen&#39;s Valuation And The 10 Year Treasury Rate</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/79f77b27ef9ec2fd118b7e5d7e52147a\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>In addition to the &#34;next best alternative&#34; math associated with higher rates and valuations, meaning that with a higher risk free rate, I require more yield on my equity investment, which suggests I need a lower valuation to buy, higher interest rates slow economic and individual business growth.</p><p>Because we&#39;ve experienced the fastest rate hiking cycle in American history and because SE Asia reopened recently, after being locked down for years, ecommerce growth in SE Asia has been tepid relative to the last few years.</p><h3 id=\"id_3676535121\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>We will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.</p><h2 id=\"id_3773151236\">Growth Rates &amp; Valuations</h2><p>On my recent podcast, I noted that the market should not have priced Sea at $350/share based on 150%+ growth because that growth was unsustainable.</p><p>That is, in the same way it was improper for the market to price Sea at $350/share based on unsustainably high growth of 150%+, it&#39;s now highly likely that it&#39;s improper for the market to price Sea at nearly $35/share based on unsustainably low growth of 5%.</p><p>I would ask the market, &#34;Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth? Might the fastest interest rate hiking cycle ever have something to do with slowing growth? Might the China recession have something to do with slowing growth?&#34;</p><h3 id=\"id_1177283835\">SE Asia Ecommerce Has Plateaued But Will Resume Growth In The Future</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>I mean this stuff is not rocket science.</p><h3 id=\"id_3584070374\">Sea Experienced Unsustainably High Growth And Now Unsustainably Low Growth</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/56be6b320f3dbb16ecb786f13c5a3af3\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>The reality for Sea is that its long term growth rate will land somewhere in the middle, and, as such, its intrinsic value is somewhere in the middle of these two utterly insane extremes.</p><p>Amazon experienced the identical valuation and growth dynamics in the early 2000s.</p><h3 id=\"id_2031746004\">Amazon Experienced Unsustainably High Growth And Unsustainably Low Growth (Bottoming At 13% in 2001)</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5d6f19fd84c68bae89d66eff83fe5074\" alt=\"YCharts\" title=\"YCharts\" tg-width=\"640\" tg-height=\"413\"/><span>YCharts</span></p><p>To assign data to the claim that growth will find itself somewhere in the middle, below, we can see that the growth of SE Asia&#39;s ecommerce market has plateaued. The growth dynamics presented below align virtually 1 to 1 with Sea&#39;s astronomical growth in 2020/2021 and rather depressed growth in 2022 and 2023.</p><h3 id=\"id_643515669\">SE Asia Ecommerce Sales Annually (Note The Deceleration &amp; Plateau)</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9bcbc6ec05e6a64a5fbf7f5c7307abc0\" alt=\"Statista\" title=\"Statista\" tg-width=\"640\" tg-height=\"343\"/><span>Statista</span></p><p>The above data answers my previously posed question,</p><blockquote><p><em>Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth?</em></p></blockquote><p>More than anything, this is why Sea has experienced such rapidly slowing growth in recent quarters and specifically in Q2 2023.</p><p>Eventually, SE Asia&#39;s ecommerce market and Sea will accelerate revenue growth, and the current panic will look highly misguided, just as pricing the business as if it would grow at 150% annualized for 10 years was highly misguided.</p><h2 id=\"id_2482640280\">Reviewing Sea&#39;s Q2 2023 &amp; The Business Broadly</h2><p>In our review of Monday&#39;s Q2 2023 earnings, I shared the four principle frameworks via which I select businesses to own.</p><p>I would certainly encourage you to read that review of Monday via the link below:</p><ul style=\"\"><li><p>Understanding Monday.com (MNDY)</p></li></ul><p>And, indeed, we&#39;ve employed one of those frameworks in ultimately deciding to own Sea Ltd. Specifically, we used the following framework:</p><ul style=\"\"><li><p><strong><em>Quality cultures that breed innovation within the larger conglomerate: </em></strong><em>We&#39;ve often explored the Spawner framework (I&#39;m working on a different name), which entails a company&#39;s ability to launch, or spawn, new successful business/product after new successful business/product, creating a nucleus of explosive, compounding sales growth. This is the idea that a business creates a culture in which its employees create new products successfully. With multiple products growing rapidly simultaneously, the business overall grows more rapidly and more durably. Some of my favorite examples that fit within this framework are Axon, Monday, Adyen , Sea, Tesla, Amazon, and MercadoLibre. Indeed, many of our businesses possess this incredible cultural structure, and that is why we&#39;ve chosen to own them.</em></p></li></ul><p>Sea began as a gaming studio/platform, i.e., Garena, which has produced the globally popular game Free Fire, from which Sea principally generates its ~$1B in cash flows annually.</p><h3 id=\"id_2202822765\">Sea&#39;s Garena Platform Key Performance Metrics</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/667df5a1ae563e13fe9b380297b5dafa\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"307\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>After successfully building this gaming studio, Sea launched Shopee in 2015.</p><p>Notably, a major ecommerce platform already existed at the time: Lazada, a former Rocket Internet startup, into which Alibaba (BABA) has poured billions of dollars.</p><p>Despite Lazada having a head start, Shopee quickly surpassed Lazada and became the undisputed, most dominant ecommerce platform in SE Asia.</p><h3 id=\"id_3416636853\">SE Asia Ecommerce Market Share Data 2022</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/234387265478d7a3eacaadad43f102d3\" alt=\"Momentum.Asia\" title=\"Momentum.Asia\" tg-width=\"1280\" tg-height=\"720\"/><span>Momentum.Asia</span></p><p>Notably, Sea is the only profitable ecommerce platform in the region, which I believe demonstrates the differentiated nature of the business and the execution thereof.</p><blockquote><p><em>There are many different service points we can touch and also continue to improve. And there are also many cost points that we will continue to improve upon and these are the key competencies, I think that brought us here to the current position of strong market leadership with the lowest cost to serve a platform that allows us to be both market leader, </em><strong><em>but also profitable and one and only in Southeast Asia so far.</em></strong><em> I think we will not give up that competitive moat and we&#39;ll continue to strengthen that.</em></p><p>Yanjun Wang, Chief Corporate Officer, Q2 2023 Sea Earnings Call</p></blockquote><p>Notably, Shopee grew ecommerce orders <em>and </em>grew sales at healthy rates in the quarter.</p><h3 id=\"id_4141599611\">Shopee Grew At 28% Year Over Year, Which Is Exceptional</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b9afc577874ff61d7708c2fbc860f84b\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"317\"/><span>Sea Q2 2023 Investor Presentation</span></p><blockquote><p><em>Gross orders increased by more than 10% quarter-on-quarter as a result of growth in both active buyers and buyer purchase frequency.</em></p><p>[I do think it could be argued that Brazil contributed to this gross order growth, and Shopee&#39;s GMV/gross orders are something to monitor in the years ahead, but the current pricing of the business suggests ecommerce growth will halt in perpetuity, but it is illogical to believe the Shopee would suddenly stop growing when we consider the WMT/HD/COST/WMT analogy and the fact that Shopee has dominated for nearly a decade. It&#39;s the strongest it&#39;s ever been and its domination will likely persist.]</p></blockquote><p>Following the creation of Shopee, in order to enable SE Asian folks to pay via the internet, Sea launched Sea Money (formerly Airpay), which has grown into one of the largest FinTech platforms on earth, with ~60M users.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8867ef7a958c7aed75ae501d59bcbd0b\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"319\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>Notably, all of these business segments are now fundamentally profitable.</p><h3 id=\"id_3666375119\">EC = Ecommerce; DE = Garena; DFS = Sea Money</h3><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7d8b6255b1397c2f661bb8f8c6c0586a\" alt=\"Sea Q2 2023 Investor Presentation\" title=\"Sea Q2 2023 Investor Presentation\" tg-width=\"640\" tg-height=\"460\"/><span>Sea Q2 2023 Investor Presentation</span></p><p>Even accounting for interest, taxes, and depreciation and amortization, Sea generated robust free cash flow in Q2 2023.</p><p>Notably, <strong><em>Sea has done all of this in 10 years.</em></strong></p><p>In only 10 years, Sea has built three exceptionally dominant, platforms that nearly 700M to 1B total people use!</p><p>And these platforms serve these 700M to 1B people <em>profitably!</em></p><p>I mean how much logic and intuition does it require to foresee that Sea is just getting started?</p><p>I do not believe it requires much.</p><p>And I do believe Sea is just getting started, atop robust free cash flow, $7.7B in cash &amp; equivalents; $3.3B in convertible debt, and a very long runway for growth still ahead.</p><h2 id=\"id_1241524940\">Concluding Thoughts: The Skies Will Open Up And The Seas Will Part In Due Course</h2><p>I would invite you to review the &#34;10 Sea Commandments&#34; that I shared at the introduction of this note.</p><p>In my estimation, the investment is extremely easy at these levels.</p><p>I don&#39;t believe the price action is mysterious. We&#39;re experiencing identically what investors experienced in buying each of Sea&#39;s predecessors: Walmart, Amazon, and Lowe&#39;s when these businesses were similarly about 10-15 years old.</p><p>To conclude, Sea currently faces these economic headwinds. Notably, these headwinds will disappear in the years ahead:</p><ol start=\"1\" style=\"\"><li><p><em>The stoppage or cessation of growth for the SE Asian ecommerce market. It grew astronomically in 2020 and 2021 and even into 2022 as SE Asia took longer to remove lockdowns. It&#39;s now basically not growing, and Sea is not growing along with it.</em></p></li><li><p><em>Difficult year over year comps: It&#39;s very hard to grow at 100%+ annualized for multiple consecutive years, just like it&#39;s hard to sprint a 40 yard dash repeatedly. Sea will work through these difficult comps and resume elevated growth eventually.</em></p></li><li><p><em>The fastest rate hiking cycle in American history. The dollar, in many ways, governs growth of the global economic system by way of the dollar &#34;exporting&#34; U.S. monetary policy. The incredible strength of the dollar, created by the fastest interest rate hiking cycle in American history, has served to slow economic growth globally.</em></p></li><li><p><em>China is in a recession and has been. This could make economic conditions in Asia worse than they already are.</em></p></li></ol><p>Eventually, each of these negatives will dissipate, and the skies will open for Sea and the growth of its business.</p><p>I believe it could be an easy, profitable 10 bagger as of today over the next 10 years.</p><p>Thank you for reading, and have a great day.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Easy To Sea</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Easy To Sea\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-09-20 16:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4635848-easy-to-sea><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has...</p>\n\n<a href=\"https://seekingalpha.com/article/4635848-easy-to-sea\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU2430703178.SGD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4H\" (SGDHDG) INC","LU0823411888.USD":"法巴消费创新基金 Cap","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","LU0082616367.USD":"摩根大通美国科技A（dist）","LU2430703251.USD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (USD) INC","BK4083":"家庭装潢零售","BK4502":"阿里概念","LU0061474960.USD":"天利环球焦点基金AU Acc","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","BK4155":"大卖场与超市","BK4505":"高瓴资本持仓","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","BK4085":"互动家庭娱乐","SE":"Sea Ltd","BK4581":"高盛持仓","BK4504":"桥水持仓","LU0234572021.USD":"高盛美国核心股票组合Acc","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","LU0648000940.SGD":"Natixis Harris Associates Global Equity RA SGD","BK4539":"次新股","LU0821914370.USD":"贝莱德亚洲成长领袖A2","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4532":"文艺复兴科技持仓","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0672654240.SGD":"FTIF - Franklin US Opportunities A Acc SGD-H1","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","SG9999002620.SGD":"LionGlobal South East Asia SGD","BK4524":"宅经济概念","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","BK4527":"明星科技股","LU2430703095.HKD":"WELLINGTON MULTI-ASSET HIGH INCOME \"AM4\" (HKD) INC","BK4526":"热门中概股"},"source_url":"https://seekingalpha.com/article/4635848-easy-to-sea","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2368901380","content_text":"Approximately every decade or so, the market trades the best businesses to own long term down the most and in quite violent fashion.Over roughly the last century of American capitalism, the market has demonstrated an especial penchant for doing so to commerce platforms.It did so to Walmart in 1973-74. It did so to Lowe's in the 1980s. It did so to Amazon in the 2000s. It did so to MercadoLibre in 2008-2009.And, today, once again, the market has curiously traded down one of the best commerce platforms on earth in something akin to a fevered, depressive panic.Today, I will quantitatively demonstrate for you the irrationality behind this price action, and, in short, I believe Sea could prove to be a 10-bagger in the decade ahead.It's Easy: Concisely Articulating The Sea ThesisShopee remains the #1 ecommerce platform in SE Asia. It is the only profitable one. Lazada is the #2, and this is a Rocket Internet Startup that existed before Shopee but has since been surpassed by Shopee by a very long shot. Shopee is indisputably the best ecommerce platform in the region, and, again, it's the only profitable platform.In the U.S., Walmart, Amazon, Target, Lowe's, Home Depot, Dollar General, grocery stores, and department stores have all co-existed and created trillions in equity value over the last 75 years.In Latin America, MercadoLibre has co-existed with a host of rivals, including Amazon quite formidably in Latin America, and it has still done very well profitably. Notably, MercadoLibre only has 35% market share of total ecommerce GMV in Latin America, while Sea has 50% in SE Asia; yet there's no fevered panic over MercadoLibre's market share.Sea has $7.7B in cash & equivalents; $3.3B in convertible debt. This is a massive amount of resources with which it can further dominate the aforementioned unprofitable and historically stagnant/inferior competition. Sea also generates robust free cash flow quarterly now alongside its giant liquidity position on its balance sheet.Sea owns Garena, which is now returning to growth. This is like Sea's AWS (AMZN) in a sense, giving it an advantage over rivals. Garena could also experience sales growth in the future, especially in light of Free Fire being unbanned in India recently. Garena produces about $1B in annualized cash flows for the conglomerate.Sea has a FinTech business (Sea Money) with about 60M users on the platform. This alone could be worth $20B to $30B, and Sea currently trades at ~$18B in enterprise value (preposterous in my opinion). This is a rapidly growing, free cash flow generative business that provides core financial infrastructure to SE Asia's digital economy alongside a couple other rivals, including GoPay (GOTO) and OVO (GRAB).SE Asia has a very, very long runway for growth demographically. The region is still in the very early innings of economic growth and development.Sea has demonstrated an ability to successfully and organically (meaning without acquiring) build new products and scale them rapidly. While it's built three incredibly successful franchises over the last decade or so, i.e., Garena (500M+ users and highly profitable), Shopee (#1 ecom platform in SE Asia and only profitable one), and Sea Money (~60M users and profitable), it's highly likely that it creates new and compelling products in the future as well, adding to the 20-30% annualized growth I believe the conglomerate will achieve in the decade ahead, once we emerge from the current rate hiking cycle and Asian economic woes broadly, both of which have served to, on some level, halt the growth of SE Asia's tech sector momentarily.Lastly, SE Asia's demographics are very favorable for sustained, elevated growth for Sea in the decades ahead (depicted below).I believe a 10 bagger over the next 10 years will be seen as base case for the business.SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaWe will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.SE Asia Has A Long Runway For Growth And Development Still AheadI understand that the data below is from 2017, but it's worth noting the total digital consumer TAM, as well as the projections for ecommerce growth, validation of which we can see in the ecommerce GMV chart shared just above.Sea Ltd.'s F-1Over the last 5-7 years, Shopee's market share has grown within a rapidly growing ecommerce GMV TAM.In a very worst case scenario, Shopee's market share may shrink, but, in light of the growth of SE Asia's ecommerce TAM, Shopee could very well continue to grow at elevated rates for decades to come.Understanding The Share Price Dynamics For Sea Ltd.I would say there's a number of approaches I could take to illustrate why Sea Ltd. (NYSE:SE) went from trading at $350/share to nearly $35/share as of today.The same number of approaches could be taken in understanding why its retail predecessors, e.g., Walmart (WMT), Lowe's (LOW), or Amazon (AMZN), likewise experienced fairly stunning share price declines early in their lifecycles.Today, I will share with you data that, in my estimation, definitively delineates why Sea and many of the former market darlings have experienced such breathtaking declines over the last 18 months or so.Let's start with the underlying market mechanisms that are not idiosyncratic to Sea. These mechanisms that we will review have created the declines we've seen from businesses like Tesla (TSLA), Affirm (AFRM), Meta (META) and Airbnb (ABNB) over the last 12 months.I've shared the following chart often, but it certainly bears re-sharing and repeating:The Prices Of Equities Overshoot To The Upside And Overshoot To The DownsideTruemind CapitalThis chart is so ubiquitously shared and repeated on the internet for a reason:It represents genuine reality of what you will experience in owning a given business/stock.And we can see these precise dynamics playing out for Sea, as well as Adyen (OTCPK:ADYEY) and many, many other businesses in the market today.Roughly Depicting The True Intrinsic Value Of Sea Based On My Estimation Of The Growth Of Free Cash Flow Per ShareYChartsRoughly Depicting The True Intrinsic Value Of Adyen Based On My Estimation Of The Growth Of Free Cash Flow Per ShareYChartsThe charts align almost perfectly identically with the \"ubiquitously shared teaching chart,\" and this is no coincidence. This is perfectly how the market operates and prices equities.\"As it was in the beginning, is now, and ever shall be, world without end. Amen.\"The market's pricing of equities overshoots to the upside (too much exuberance) and overshoots to the downside (too much despair), and it has done this since the dawn of asset markets. The Great Warren Buffett has the market's behavior in this respect as the behavior of a \"drunken psycho,\" and we can certainly see and, for those that own Sea and Adyen, feel why.Interest Rates & Growth RatesTo delve deeper into the underlying mechanisms driving the, as Mr. Buffett would call them, \"drunken, psychotic\" pricing dynamics of the market, we should consider how interest rates and individual company growth rates have impacted the valuations of Sea and Adyen.When interest rates rise (i.e., the cost of credit in the economy rise), valuations decline, all else being equal (we will consider growth rates and their impact on valuations in a moment).When interest rates decline (i.e., the cost of credit in the economy declines), valuations rise, all else being equal.Below, we can see how a dramatic decline in interest rates created something akin to a \"zero gravity environment\" for the valuation of Sea (I will include Adyen as well to provide further context for this exercise).Sea's Valuation And The 10 Year Treasury RateYChartsAs interest rates have risen at the fastest rate in the history of America, the precise inverse has occurred:Instead of a zero gravity environment for Sea, it has experienced 2x gravity for its valuation and correspondingly its stock price.Visual CapitalistIf we couple this dynamic with the natural tendency of humans in crowds to panic and flee (sell), thereby creating market crashes, we can better understand why Sea's share price has been in free fall, despite reporting a fantastic Q2, in which it generated very healthy free cash flow and GAAP net income, grew sales, remained the #1 and only profitable ecommerce platform in SE Asia, grew its profitable FinTech business, and stabilized/grew its gaming business' users.We will explore Sea's quarter in following sections, but it certainly is worth noting in this valuation exercise that Sea reported an objectively fantastic Q2 2023 earnings. It could not have done better in my eyes.Turning to Adyen, we can see precisely the same valuation dynamics, precipitated by higher interest rates, playing out.Adyen's Valuation And The 10 Year Treasury RateYChartsIn addition to the \"next best alternative\" math associated with higher rates and valuations, meaning that with a higher risk free rate, I require more yield on my equity investment, which suggests I need a lower valuation to buy, higher interest rates slow economic and individual business growth.Because we've experienced the fastest rate hiking cycle in American history and because SE Asia reopened recently, after being locked down for years, ecommerce growth in SE Asia has been tepid relative to the last few years.SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaWe will discuss this last chart, which I believe to be central to the thesis (i.e., the slowing of SE Asian ecommerce is a near term headwind that will disappear in the future), later in this note.Growth Rates & ValuationsOn my recent podcast, I noted that the market should not have priced Sea at $350/share based on 150%+ growth because that growth was unsustainable.That is, in the same way it was improper for the market to price Sea at $350/share based on unsustainably high growth of 150%+, it's now highly likely that it's improper for the market to price Sea at nearly $35/share based on unsustainably low growth of 5%.I would ask the market, \"Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth? Might the fastest interest rate hiking cycle ever have something to do with slowing growth? Might the China recession have something to do with slowing growth?\"SE Asia Ecommerce Has Plateaued But Will Resume Growth In The FutureStatistaI mean this stuff is not rocket science.Sea Experienced Unsustainably High Growth And Now Unsustainably Low GrowthYChartsThe reality for Sea is that its long term growth rate will land somewhere in the middle, and, as such, its intrinsic value is somewhere in the middle of these two utterly insane extremes.Amazon experienced the identical valuation and growth dynamics in the early 2000s.Amazon Experienced Unsustainably High Growth And Unsustainably Low Growth (Bottoming At 13% in 2001)YChartsTo assign data to the claim that growth will find itself somewhere in the middle, below, we can see that the growth of SE Asia's ecommerce market has plateaued. The growth dynamics presented below align virtually 1 to 1 with Sea's astronomical growth in 2020/2021 and rather depressed growth in 2022 and 2023.SE Asia Ecommerce Sales Annually (Note The Deceleration & Plateau)StatistaThe above data answers my previously posed question,Do you think, perhaps, after hundreds of percent of ecommerce growth in the span of 24 months, there will be a receding of this demand? Might difficult year over year comps have something to do with the slowing growth?More than anything, this is why Sea has experienced such rapidly slowing growth in recent quarters and specifically in Q2 2023.Eventually, SE Asia's ecommerce market and Sea will accelerate revenue growth, and the current panic will look highly misguided, just as pricing the business as if it would grow at 150% annualized for 10 years was highly misguided.Reviewing Sea's Q2 2023 & The Business BroadlyIn our review of Monday's Q2 2023 earnings, I shared the four principle frameworks via which I select businesses to own.I would certainly encourage you to read that review of Monday via the link below:Understanding Monday.com (MNDY)And, indeed, we've employed one of those frameworks in ultimately deciding to own Sea Ltd. Specifically, we used the following framework:Quality cultures that breed innovation within the larger conglomerate: We've often explored the Spawner framework (I'm working on a different name), which entails a company's ability to launch, or spawn, new successful business/product after new successful business/product, creating a nucleus of explosive, compounding sales growth. This is the idea that a business creates a culture in which its employees create new products successfully. With multiple products growing rapidly simultaneously, the business overall grows more rapidly and more durably. Some of my favorite examples that fit within this framework are Axon, Monday, Adyen , Sea, Tesla, Amazon, and MercadoLibre. Indeed, many of our businesses possess this incredible cultural structure, and that is why we've chosen to own them.Sea began as a gaming studio/platform, i.e., Garena, which has produced the globally popular game Free Fire, from which Sea principally generates its ~$1B in cash flows annually.Sea's Garena Platform Key Performance MetricsSea Q2 2023 Investor PresentationAfter successfully building this gaming studio, Sea launched Shopee in 2015.Notably, a major ecommerce platform already existed at the time: Lazada, a former Rocket Internet startup, into which Alibaba (BABA) has poured billions of dollars.Despite Lazada having a head start, Shopee quickly surpassed Lazada and became the undisputed, most dominant ecommerce platform in SE Asia.SE Asia Ecommerce Market Share Data 2022Momentum.AsiaNotably, Sea is the only profitable ecommerce platform in the region, which I believe demonstrates the differentiated nature of the business and the execution thereof.There are many different service points we can touch and also continue to improve. And there are also many cost points that we will continue to improve upon and these are the key competencies, I think that brought us here to the current position of strong market leadership with the lowest cost to serve a platform that allows us to be both market leader, but also profitable and one and only in Southeast Asia so far. I think we will not give up that competitive moat and we'll continue to strengthen that.Yanjun Wang, Chief Corporate Officer, Q2 2023 Sea Earnings CallNotably, Shopee grew ecommerce orders and grew sales at healthy rates in the quarter.Shopee Grew At 28% Year Over Year, Which Is ExceptionalSea Q2 2023 Investor PresentationGross orders increased by more than 10% quarter-on-quarter as a result of growth in both active buyers and buyer purchase frequency.[I do think it could be argued that Brazil contributed to this gross order growth, and Shopee's GMV/gross orders are something to monitor in the years ahead, but the current pricing of the business suggests ecommerce growth will halt in perpetuity, but it is illogical to believe the Shopee would suddenly stop growing when we consider the WMT/HD/COST/WMT analogy and the fact that Shopee has dominated for nearly a decade. It's the strongest it's ever been and its domination will likely persist.]Following the creation of Shopee, in order to enable SE Asian folks to pay via the internet, Sea launched Sea Money (formerly Airpay), which has grown into one of the largest FinTech platforms on earth, with ~60M users.Sea Q2 2023 Investor PresentationNotably, all of these business segments are now fundamentally profitable.EC = Ecommerce; DE = Garena; DFS = Sea MoneySea Q2 2023 Investor PresentationEven accounting for interest, taxes, and depreciation and amortization, Sea generated robust free cash flow in Q2 2023.Notably, Sea has done all of this in 10 years.In only 10 years, Sea has built three exceptionally dominant, platforms that nearly 700M to 1B total people use!And these platforms serve these 700M to 1B people profitably!I mean how much logic and intuition does it require to foresee that Sea is just getting started?I do not believe it requires much.And I do believe Sea is just getting started, atop robust free cash flow, $7.7B in cash & equivalents; $3.3B in convertible debt, and a very long runway for growth still ahead.Concluding Thoughts: The Skies Will Open Up And The Seas Will Part In Due CourseI would invite you to review the \"10 Sea Commandments\" that I shared at the introduction of this note.In my estimation, the investment is extremely easy at these levels.I don't believe the price action is mysterious. We're experiencing identically what investors experienced in buying each of Sea's predecessors: Walmart, Amazon, and Lowe's when these businesses were similarly about 10-15 years old.To conclude, Sea currently faces these economic headwinds. Notably, these headwinds will disappear in the years ahead:The stoppage or cessation of growth for the SE Asian ecommerce market. It grew astronomically in 2020 and 2021 and even into 2022 as SE Asia took longer to remove lockdowns. It's now basically not growing, and Sea is not growing along with it.Difficult year over year comps: It's very hard to grow at 100%+ annualized for multiple consecutive years, just like it's hard to sprint a 40 yard dash repeatedly. Sea will work through these difficult comps and resume elevated growth eventually.The fastest rate hiking cycle in American history. The dollar, in many ways, governs growth of the global economic system by way of the dollar \"exporting\" U.S. monetary policy. The incredible strength of the dollar, created by the fastest interest rate hiking cycle in American history, has served to slow economic growth globally.China is in a recession and has been. This could make economic conditions in Asia worse than they already are.Eventually, each of these negatives will dissipate, and the skies will open for Sea and the growth of its business.I believe it could be an easy, profitable 10 bagger as of today over the next 10 years.Thank you for reading, and have a great day.","news_type":1},"isVote":1,"tweetType":1,"viewCount":291,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9937249171,"gmtCreate":1663461362094,"gmtModify":1676537272580,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9937249171","repostId":"2268672370","repostType":4,"repost":{"id":"2268672370","pubTimestamp":1663460267,"share":"https://ttm.financial/m/news/2268672370?lang=&edition=fundamental","pubTime":"2022-09-18 08:17","market":"us","language":"en","title":"Can the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know","url":"https://stock-news.laohu8.com/highlight/detail?id=2268672370","media":"MarketWatch","summary":"Investors should brace for more volatility with policy makers expected to deliver another jumbo rate","content":"<html><head></head><body><p>Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hike</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5b4166c0ac7b0bdf7caa1837ef618a67\" tg-width=\"700\" tg-height=\"487\" width=\"100%\" height=\"auto\"/><span>Fed Chair Jerome Powell says bringing down inflation will cause pain for households and businesses.</span></p><p>The Federal Reserve isn’t trying to slam the stock market as it rapidly raises interest rates in its bid to slow inflation still running red hot — but investors need to be prepared for more pain and volatility because policy makers aren’t going to be cowed by a deepening selloff, investors and strategists said.</p><p>“I don’t think they’re necessarily trying to drive inflation down by destroying stock prices or bond prices, but it is having that effect.” said Tim Courtney, chief investment officer at Exencial Wealth Advisors, in an interview.</p><p>U.S. stocks fell sharply in the past week after hopes for a pronounced cooling in inflation were dashed by a hotter-than-expected August inflation reading. The data cemented expectations among fed-funds futures traders for a rate hike of at least 75 basis points when the Fed concludes its policy meeting on Sept. 21, with some traders and analysts looking for an increase of 100 basis points, or a full percentage point.</p><p>The Dow Jones Industrial Average logged a 4.1% weekly fall, while the S&amp;P 500 dropped 4.8% and the Nasdaq Composite suffered a 5.5% decline. The S&amp;P 500 ended Friday below the 3,900 level viewed as an important area of technical support, with some chart watchers eyeing the potential for a test of the large-cap benchmark’s 2022 low at 3,666.77 set on June 16.</p><p>A profit warning from global shipping giant and economic bellwether FedEx Corp. further stoked recession fears, contributing to stock-market losses on Friday.</p><p>Treasurys also fell, with yield on the 2-year Treasury note soaring to a nearly 15-year high above 3.85% on expectations the Fed will continue pushing rates higher in coming months. Yields rise as prices fall.</p><p>Investors are operating in an environment where the central bank’s need to rein in stubborn inflation is widely seen having eliminated the notion of a figurative “Fed put” on the stock market.</p><p>The concept of a Fed put has been around since at least the October 1987 stock-market crash prompted the Alan Greenspan-led central bank to lower interest rates. An actual put option is a financial derivative that gives the holder the right but not the obligation to sell the underlying asset at a set level, known as the strike price, serving as an insurance policy against a market decline.</p><p>Some economists and analysts have even suggested the Fed should welcome or even aim for market losses, which could serve to tighten financial conditions as investors scale back spending.</p><p>William Dudley, the former president of the New York Fed, argued earlier this year that the central bank won’t get a handle on inflation that’s running near a 40-year high unless they make investors suffer. “It’s hard to know how much the Federal Reserve will need to do to get inflation under control,” wrote Dudley in a Bloomberg column in April. “But one thing is certain: to be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.”</p><p>Some market participants aren’t convinced. Aoifinn Devitt, chief investment officer at Moneta,said the Fed likely sees stock-market volatility as a byproduct of its efforts to tighten monetary policy, not an objective.</p><p>“They recognize that stocks can be collateral damage in a tightening cycle,” but that doesn’t mean that stocks “have to collapse,” Devitt said.</p><p>The Fed, however, is prepared to tolerate seeing markets decline and the economy slow and even tip into recession as it focuses on taming inflation, she said.</p><p>The Federal Reserve held the fed funds target rate at a range of 0% to 0.25% between 2008 and 2015, as it dealt with the financial crisis and its aftermath. The Fed also cut rates to near zero again in March 2020 in response to the COVID-19 pandemic. With a rock-bottom interest rate, the Dow skyrocketed over 40%, while the large-cap index S&amp;P 500 jumped over 60% between March 2020 and December 2021, according to Dow Jones Market Data.</p><p>Investors got used to “the tailwind for over a decade with falling interest rates” while looking for the Fed to step in with its “put” should the going get rocky, said Courtney at Exencial Wealth Advisors.</p><p>“I think (now) the Fed message is ‘you’re not gonna get this tailwind anymore’,” Courtney told MarketWatch on Thursday. “I think markets can grow, but they’re gonna have to grow on their own because the markets are like a greenhouse where the temperatures have to be kept at a certain level all day and all night, and I think that’s the message that markets can and should grow on their own without the greenhouse effect.”</p><p>Meanwhile, the Fed’s aggressive stance means investors should be prepared for what may be a “few more daily stabs downward” that could eventually prove to be a “final big flush,” said Liz Young, head of investment strategy at SoFi, in a Thursday note.</p><p>“This may sound odd, but if that happens swiftly, meaning within the next couple months, that actually becomes the bull case in my view,” she said. “It could be a quick and painful drop, resulting in a renewed move higher later in the year that’s more durable, as inflation falls more notably.”</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Can the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCan the Fed Tame Inflation Without Further Crushing the Stock Market? What Investors Need to Know\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-09-18 08:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hikeFed Chair Jerome Powell says bringing down inflation will cause pain for households and ...</p>\n\n<a href=\"https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/the-fed-isnt-trying-to-wreck-the-stock-market-as-it-wrestles-with-inflation-but-it-isnt-going-to-ride-to-the-rescue-11663366540?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2268672370","content_text":"Investors should brace for more volatility with policy makers expected to deliver another jumbo rate hikeFed Chair Jerome Powell says bringing down inflation will cause pain for households and businesses.The Federal Reserve isn’t trying to slam the stock market as it rapidly raises interest rates in its bid to slow inflation still running red hot — but investors need to be prepared for more pain and volatility because policy makers aren’t going to be cowed by a deepening selloff, investors and strategists said.“I don’t think they’re necessarily trying to drive inflation down by destroying stock prices or bond prices, but it is having that effect.” said Tim Courtney, chief investment officer at Exencial Wealth Advisors, in an interview.U.S. stocks fell sharply in the past week after hopes for a pronounced cooling in inflation were dashed by a hotter-than-expected August inflation reading. The data cemented expectations among fed-funds futures traders for a rate hike of at least 75 basis points when the Fed concludes its policy meeting on Sept. 21, with some traders and analysts looking for an increase of 100 basis points, or a full percentage point.The Dow Jones Industrial Average logged a 4.1% weekly fall, while the S&P 500 dropped 4.8% and the Nasdaq Composite suffered a 5.5% decline. The S&P 500 ended Friday below the 3,900 level viewed as an important area of technical support, with some chart watchers eyeing the potential for a test of the large-cap benchmark’s 2022 low at 3,666.77 set on June 16.A profit warning from global shipping giant and economic bellwether FedEx Corp. further stoked recession fears, contributing to stock-market losses on Friday.Treasurys also fell, with yield on the 2-year Treasury note soaring to a nearly 15-year high above 3.85% on expectations the Fed will continue pushing rates higher in coming months. Yields rise as prices fall.Investors are operating in an environment where the central bank’s need to rein in stubborn inflation is widely seen having eliminated the notion of a figurative “Fed put” on the stock market.The concept of a Fed put has been around since at least the October 1987 stock-market crash prompted the Alan Greenspan-led central bank to lower interest rates. An actual put option is a financial derivative that gives the holder the right but not the obligation to sell the underlying asset at a set level, known as the strike price, serving as an insurance policy against a market decline.Some economists and analysts have even suggested the Fed should welcome or even aim for market losses, which could serve to tighten financial conditions as investors scale back spending.William Dudley, the former president of the New York Fed, argued earlier this year that the central bank won’t get a handle on inflation that’s running near a 40-year high unless they make investors suffer. “It’s hard to know how much the Federal Reserve will need to do to get inflation under control,” wrote Dudley in a Bloomberg column in April. “But one thing is certain: to be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.”Some market participants aren’t convinced. Aoifinn Devitt, chief investment officer at Moneta,said the Fed likely sees stock-market volatility as a byproduct of its efforts to tighten monetary policy, not an objective.“They recognize that stocks can be collateral damage in a tightening cycle,” but that doesn’t mean that stocks “have to collapse,” Devitt said.The Fed, however, is prepared to tolerate seeing markets decline and the economy slow and even tip into recession as it focuses on taming inflation, she said.The Federal Reserve held the fed funds target rate at a range of 0% to 0.25% between 2008 and 2015, as it dealt with the financial crisis and its aftermath. The Fed also cut rates to near zero again in March 2020 in response to the COVID-19 pandemic. With a rock-bottom interest rate, the Dow skyrocketed over 40%, while the large-cap index S&P 500 jumped over 60% between March 2020 and December 2021, according to Dow Jones Market Data.Investors got used to “the tailwind for over a decade with falling interest rates” while looking for the Fed to step in with its “put” should the going get rocky, said Courtney at Exencial Wealth Advisors.“I think (now) the Fed message is ‘you’re not gonna get this tailwind anymore’,” Courtney told MarketWatch on Thursday. “I think markets can grow, but they’re gonna have to grow on their own because the markets are like a greenhouse where the temperatures have to be kept at a certain level all day and all night, and I think that’s the message that markets can and should grow on their own without the greenhouse effect.”Meanwhile, the Fed’s aggressive stance means investors should be prepared for what may be a “few more daily stabs downward” that could eventually prove to be a “final big flush,” said Liz Young, head of investment strategy at SoFi, in a Thursday note.“This may sound odd, but if that happens swiftly, meaning within the next couple months, that actually becomes the bull case in my view,” she said. “It could be a quick and painful drop, resulting in a renewed move higher later in the year that’s more durable, as inflation falls more notably.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":112,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9991121201,"gmtCreate":1660791892705,"gmtModify":1676536400721,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9991121201","repostId":"1119354607","repostType":2,"repost":{"id":"1119354607","pubTimestamp":1660791078,"share":"https://ttm.financial/m/news/1119354607?lang=&edition=fundamental","pubTime":"2022-08-18 10:51","market":"us","language":"en","title":"Sea Limited: Riding This Wave Through Recent Volatility","url":"https://stock-news.laohu8.com/highlight/detail?id=1119354607","media":"Seeking Alpha","summary":"SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below ","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>Sea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.</li><li>Management also pulled guidance for their E-Commerce segment given the uncertainties.</li><li>With the stock down 65% year to date and sentiment remaining negative, I believe we may be nearing a bottom.</li><li>Valuation is currently ~3.5x forward revenue and if the company can execute on their efficiency and profitability targets, long-term investors could be rewarded.</li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1aba4b262e32def27011fb88083553dc\" tg-width=\"1080\" tg-height=\"900\" referrerpolicy=\"no-referrer\"/><span>SIphotography</span></p><p>Sea Limited (NYSE:SE) recently reported a challenging Q2 with revenue and adjusted EBITDA coming in below expectations given the ongoing macro pressures on their business.</p><p>The biggest disappointment during the quarter was the company suspending guidance for their E-Commercesegment in addition to the company reported ongoing declines in their Digital Entertainment quarterly active users and quarterly paying users.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/947cbefc4a9424c2cf4602555ffcfaf2\" tg-width=\"1280\" tg-height=\"802\" referrerpolicy=\"no-referrer\"/><span>SE data by YCharts</span></p><p>To no surprise, the company&#39;s stock was down over 10% on disappointing earnings and guidance suspension, which brings the year to date pulldown to 65%.</p><p>Yes, the macro environment remain very challenged and there is still a lot of uncertainty that may take several quarters or months to play out. However, I believe much of this is currently priced into the stock.</p><p>Currently, Sea trades at 3.5x forward revenue, which is pretty similar to the recent range of 3-4x forward revenue. The combination of challenging macro, revenue deceleration, and ongoing adjusted EBITDA losses makes it difficult to see multiple expansion in the near-term.</p><p>However, long-term investors should remain confident in the outlook and could view this recent pullback as a buying opportunity. Given the recent stock weakness and ongoing negative sentiment, I do believe we may be near a bottom for the stock. Even though the stock remains a show-me story, I continue to believe the long-term outlook remains healthy and long-term investors will be rewarded over time.</p><p><b>Financial Review and Guidance</b></p><p>During the quarter, revenue grew 29% yoy to $2.94 billion, which actually missed expectations by $90 million. While results were certainly weighed down by the macro environment, the underlying trends seemed to be okay. Heading into earrings, I was a little more cautious given the challenging macro environment and warned that upcoming results could disappoint.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/aa02e1ba77d5ca0242b3375eb7f4397c\" tg-width=\"437\" tg-height=\"423\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>On top of the revenue shortfall, the company reported total adjusted EBITDA loss of $506 million, which is worse than the $24 million last in the year-ago period. Ultimately, this led to the company reporting non-GAAP EPS loss of $1.03, which was worse than expectations.</p><p><b>E-Commerce</b></p><p>E-Commerce revenue during the quarter continued to decelerate, with revenue growing 51% yoy to $1.7 billion. I previously warned of the difficult growth comparisons coming up with revenue growth being 250% yoy in Q1-2021, 161% yoy in Q2-2021, and 134% yoy in Q3-2021. Not surprisingly, the challenging growth comparable caused another quarter of E-Commerce revenue deceleration.</p><p>In addition, consumers were faced with a high inflationary environment with wages not keeping pace, thus the real cost of goods has increased quite significantly, placing pressure on discretionary spending.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3644e6fd6348a46434e94b9052848db6\" tg-width=\"640\" tg-height=\"297\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>Also during the quarter, gross orders grew 42% yoy to 2.0 billion, and while this is up sequentially from 1.9 billion last quarter, the past three quarters have not seen much sequential growth.</p><p>While the company&#39;s Shopee platform continues to receive high marksacross the globe as one of the highest ranked apps, profitability has struggled to gain traction. In fact, adjusted EBITDA loss during the quarter was $648 million, which is almost $70 million worse than the year-ago period. Focus needs to rapidly shift to profitability improvement.</p><p>And management took this first step during the quarter with adjusted EBITDA loss per order improving 21% yoy. While disappointing to see, it was not overly shocking to see management pull guidance for their E-Commerce segment for the remainder of the year given the several macro headwinds the company is currently experiencing.</p><blockquote>Given our strategic shifts, coupled with the various macro factors that are hard to predict as mentioned before, we believe it is prudent to maximize our focus on efficiency across our business rather than over-committing which we believe would be ill-advised at this time of uncertainty. As such, we are suspending the full year guidance for Shopee, which we last provided in May. Even though we have stopped providing guidance, our focus for the rest of the year remains very clear, which is to continue to improve efficiency by both deepening monetization and optimizing our cost structure. We will be more tightly managing our operating expenses, such as marketing costs and logistics costs, while also gradually increasing monetization across various income streams with a focus on the high margin ones.</blockquote><p>Remember, last quarter management downward revised their E-Commerce revenue expectations given the increased uncertainties in the macro environment, especially around the Asia-Pacific regions. And rather than lowering guidance again and remaining uncertain, I think management did the right thing in not providing any guidance.</p><p>While sentiment likely remains negative around this segment for some time until the company can show improving revenue and profitability trends, I do believe the long-term outlook remains healthy in a normalized environment.</p><p><b>Digital Entertainment</b></p><p>Digital Entertainment revenue during the quarter came in at $900 million, which actually declined from the $1.0 billion reported in the year-ago period, largely driven by lower quarterly active users. In addition, bookings during the quarter were $717 million, declining around 40% yoy compared to $1.2 billion in the year-ago period.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/64fb9365f6a4d9588208a22e5e9c8643\" tg-width=\"640\" tg-height=\"293\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>Last quarter, management commented on a slowdown in user engagement with quarterly active users declining 5% yoy and quarterly paying users declining 23% yoy. And in Q2, trends continued to deteriorate.</p><p>During the quarter, quarterly active users declined 15% yoy with quarterly paying users declining 39% yoy. While the company noted that Free Fire continues to be the highest grossing mobile game in Southeast Asia and Latin America for the 12th consecutive quarter, they also talked about some of the macro headwinds they are seeing in the business.</p><blockquote>While short-term gaming industry trends remain relatively uncertain due to reopening trends as well as the potential impact from macro volatility, we are highly confident in the long-term structural tailwinds of the segment. We expect this to be even more apparent across our markets where we are well positioned and the growth runway for digital entertainment is substantial. We also expect this to support the long-term sustained life span of our existing franchises and platforms.</blockquote><p>Yes, user engagement trends can move around from quarter to quarter, but these underlying trends are worrisome and the uncertain macro environment paints a challenging picture. With ongoing pressure in quarterly active users and even worse trends in paying users, I believe this part of the business remains a show-me story.</p><p>In addition, adjusted EBITDA for this segment during the quarter was $334 million, down from $741 million in the year-ago period. This represents 46.5% of bookings during the quarter, which is also down from 62.8% in the year-ago period.</p><p><b>Digital Financial Services</b></p><p>One area of strength during the quarter was within their Digital Financial Services business, which continues to post impressive growth. Revenue during the quarter grew 214% yoy to $279 million and the company actually improved their adjusted EBITDA loss to $112 million, up from the loss of $155 million in the year-ago period.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7d3e5ef5588d010a662d6125d875e056\" tg-width=\"640\" tg-height=\"318\" referrerpolicy=\"no-referrer\"/><span>Sea Limited</span></p><p>What drove this strength during the quarter was the combination of ongoing success with quarterly active users and TPV within their mobile wallet.</p><p>Quarterly active users grew 53% yoy to 52.7 million and TPV for mobile wallet grew 36% yoy to $5.7 billion, which also showed a nice sequential uptick.</p><p>As they continue to roll out more SeaMoney offerings across their markets, I believe the company will continue to report sequential improvements in TPV, much like we saw during Q2. With the company noting that 40% of quarterly active buyers on Shopee in Southeast Asia having used SeaMoney products or services during Q2, I believe there continues to be a long runway of penetration left in the existing customer base. Not to mention the significant growth opportunity with new users and markets.</p><p><b>Valuation</b></p><p>Given that management pulled their E-Commerce for the remainder of the year, it was no surprise to see the stock down over 10% the day of earnings. This means the stock is now down over 65% so far this year, and I believe the ongoing weakness may persist over the coming months until the macro environment clears up a bit.</p><p>Despite the ongoing macro impacts, the strength within the company&#39;s Digital Financial Services was encouraging, though the underlying profitability trends remain questionable for the total business. I believe the company will need to start executing on operational efficiencies to help improve profitability before investors become more comfortable with the company.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5253c2a546c24122ea76c4804fd67a49\" tg-width=\"1280\" tg-height=\"802\" referrerpolicy=\"no-referrer\"/><span>SE EV to Revenues (Forward) data by YCharts</span></p><p>While estimates for 2022 and 2023 revenue likely come down over the next few weeks given the macro uncertainties, valuation has pretty much stalled at 3-4x forward revenue. The stock currently trades around 3.5x forward revenue and it seems possible that valuations remains stuck in this recent trading range until the company executes on their improved efficiency strategy.</p><p>By no means is 3-4x forward revenue an expensive multiple to pay, the combination of decelerating revenue, a challenging and uncertain macro environment, and ongoing adjusted EBITDA losses makes it challenging to justify a higher multiple.</p><p>I do believe that long-term, the company is poised for strong growth trends and improved profitability. However, the stock may remain in the penalty box for now until the company can show progress around these initiatives.</p><p>Longer-term investors are likely to remain rewarded if they hold onto their position throughout this volatility, but indeed there is likely to be ongoing volatility over the coming months and quarters.</p><p>For now, I believe much of the challenging macro factors are priced into the stock and would not be surprised if we saw the bottom approaching. Thus, I believe long-term investors should find this pullback as a good buying opportunity.</p><p><i>This article was written by The Software Side of Life. This article is for reference only.</i></p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Riding This Wave Through Recent Volatility</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Riding This Wave Through Recent Volatility\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-18 10:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.Management also pulled guidance for their E-...</p>\n\n<a href=\"https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4535144-sea-limited-riding-wave-through-recent-volatility","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1119354607","content_text":"SummarySea Limited reported a challenged Q2 report with revenue and adjusted EBITDA coming in below expectations given the difficult macro environment.Management also pulled guidance for their E-Commerce segment given the uncertainties.With the stock down 65% year to date and sentiment remaining negative, I believe we may be nearing a bottom.Valuation is currently ~3.5x forward revenue and if the company can execute on their efficiency and profitability targets, long-term investors could be rewarded.SIphotographySea Limited (NYSE:SE) recently reported a challenging Q2 with revenue and adjusted EBITDA coming in below expectations given the ongoing macro pressures on their business.The biggest disappointment during the quarter was the company suspending guidance for their E-Commercesegment in addition to the company reported ongoing declines in their Digital Entertainment quarterly active users and quarterly paying users.SE data by YChartsTo no surprise, the company's stock was down over 10% on disappointing earnings and guidance suspension, which brings the year to date pulldown to 65%.Yes, the macro environment remain very challenged and there is still a lot of uncertainty that may take several quarters or months to play out. However, I believe much of this is currently priced into the stock.Currently, Sea trades at 3.5x forward revenue, which is pretty similar to the recent range of 3-4x forward revenue. The combination of challenging macro, revenue deceleration, and ongoing adjusted EBITDA losses makes it difficult to see multiple expansion in the near-term.However, long-term investors should remain confident in the outlook and could view this recent pullback as a buying opportunity. Given the recent stock weakness and ongoing negative sentiment, I do believe we may be near a bottom for the stock. Even though the stock remains a show-me story, I continue to believe the long-term outlook remains healthy and long-term investors will be rewarded over time.Financial Review and GuidanceDuring the quarter, revenue grew 29% yoy to $2.94 billion, which actually missed expectations by $90 million. While results were certainly weighed down by the macro environment, the underlying trends seemed to be okay. Heading into earrings, I was a little more cautious given the challenging macro environment and warned that upcoming results could disappoint.Sea LimitedOn top of the revenue shortfall, the company reported total adjusted EBITDA loss of $506 million, which is worse than the $24 million last in the year-ago period. Ultimately, this led to the company reporting non-GAAP EPS loss of $1.03, which was worse than expectations.E-CommerceE-Commerce revenue during the quarter continued to decelerate, with revenue growing 51% yoy to $1.7 billion. I previously warned of the difficult growth comparisons coming up with revenue growth being 250% yoy in Q1-2021, 161% yoy in Q2-2021, and 134% yoy in Q3-2021. Not surprisingly, the challenging growth comparable caused another quarter of E-Commerce revenue deceleration.In addition, consumers were faced with a high inflationary environment with wages not keeping pace, thus the real cost of goods has increased quite significantly, placing pressure on discretionary spending.Sea LimitedAlso during the quarter, gross orders grew 42% yoy to 2.0 billion, and while this is up sequentially from 1.9 billion last quarter, the past three quarters have not seen much sequential growth.While the company's Shopee platform continues to receive high marksacross the globe as one of the highest ranked apps, profitability has struggled to gain traction. In fact, adjusted EBITDA loss during the quarter was $648 million, which is almost $70 million worse than the year-ago period. Focus needs to rapidly shift to profitability improvement.And management took this first step during the quarter with adjusted EBITDA loss per order improving 21% yoy. While disappointing to see, it was not overly shocking to see management pull guidance for their E-Commerce segment for the remainder of the year given the several macro headwinds the company is currently experiencing.Given our strategic shifts, coupled with the various macro factors that are hard to predict as mentioned before, we believe it is prudent to maximize our focus on efficiency across our business rather than over-committing which we believe would be ill-advised at this time of uncertainty. As such, we are suspending the full year guidance for Shopee, which we last provided in May. Even though we have stopped providing guidance, our focus for the rest of the year remains very clear, which is to continue to improve efficiency by both deepening monetization and optimizing our cost structure. We will be more tightly managing our operating expenses, such as marketing costs and logistics costs, while also gradually increasing monetization across various income streams with a focus on the high margin ones.Remember, last quarter management downward revised their E-Commerce revenue expectations given the increased uncertainties in the macro environment, especially around the Asia-Pacific regions. And rather than lowering guidance again and remaining uncertain, I think management did the right thing in not providing any guidance.While sentiment likely remains negative around this segment for some time until the company can show improving revenue and profitability trends, I do believe the long-term outlook remains healthy in a normalized environment.Digital EntertainmentDigital Entertainment revenue during the quarter came in at $900 million, which actually declined from the $1.0 billion reported in the year-ago period, largely driven by lower quarterly active users. In addition, bookings during the quarter were $717 million, declining around 40% yoy compared to $1.2 billion in the year-ago period.Sea LimitedLast quarter, management commented on a slowdown in user engagement with quarterly active users declining 5% yoy and quarterly paying users declining 23% yoy. And in Q2, trends continued to deteriorate.During the quarter, quarterly active users declined 15% yoy with quarterly paying users declining 39% yoy. While the company noted that Free Fire continues to be the highest grossing mobile game in Southeast Asia and Latin America for the 12th consecutive quarter, they also talked about some of the macro headwinds they are seeing in the business.While short-term gaming industry trends remain relatively uncertain due to reopening trends as well as the potential impact from macro volatility, we are highly confident in the long-term structural tailwinds of the segment. We expect this to be even more apparent across our markets where we are well positioned and the growth runway for digital entertainment is substantial. We also expect this to support the long-term sustained life span of our existing franchises and platforms.Yes, user engagement trends can move around from quarter to quarter, but these underlying trends are worrisome and the uncertain macro environment paints a challenging picture. With ongoing pressure in quarterly active users and even worse trends in paying users, I believe this part of the business remains a show-me story.In addition, adjusted EBITDA for this segment during the quarter was $334 million, down from $741 million in the year-ago period. This represents 46.5% of bookings during the quarter, which is also down from 62.8% in the year-ago period.Digital Financial ServicesOne area of strength during the quarter was within their Digital Financial Services business, which continues to post impressive growth. Revenue during the quarter grew 214% yoy to $279 million and the company actually improved their adjusted EBITDA loss to $112 million, up from the loss of $155 million in the year-ago period.Sea LimitedWhat drove this strength during the quarter was the combination of ongoing success with quarterly active users and TPV within their mobile wallet.Quarterly active users grew 53% yoy to 52.7 million and TPV for mobile wallet grew 36% yoy to $5.7 billion, which also showed a nice sequential uptick.As they continue to roll out more SeaMoney offerings across their markets, I believe the company will continue to report sequential improvements in TPV, much like we saw during Q2. With the company noting that 40% of quarterly active buyers on Shopee in Southeast Asia having used SeaMoney products or services during Q2, I believe there continues to be a long runway of penetration left in the existing customer base. Not to mention the significant growth opportunity with new users and markets.ValuationGiven that management pulled their E-Commerce for the remainder of the year, it was no surprise to see the stock down over 10% the day of earnings. This means the stock is now down over 65% so far this year, and I believe the ongoing weakness may persist over the coming months until the macro environment clears up a bit.Despite the ongoing macro impacts, the strength within the company's Digital Financial Services was encouraging, though the underlying profitability trends remain questionable for the total business. I believe the company will need to start executing on operational efficiencies to help improve profitability before investors become more comfortable with the company.SE EV to Revenues (Forward) data by YChartsWhile estimates for 2022 and 2023 revenue likely come down over the next few weeks given the macro uncertainties, valuation has pretty much stalled at 3-4x forward revenue. The stock currently trades around 3.5x forward revenue and it seems possible that valuations remains stuck in this recent trading range until the company executes on their improved efficiency strategy.By no means is 3-4x forward revenue an expensive multiple to pay, the combination of decelerating revenue, a challenging and uncertain macro environment, and ongoing adjusted EBITDA losses makes it challenging to justify a higher multiple.I do believe that long-term, the company is poised for strong growth trends and improved profitability. However, the stock may remain in the penalty box for now until the company can show progress around these initiatives.Longer-term investors are likely to remain rewarded if they hold onto their position throughout this volatility, but indeed there is likely to be ongoing volatility over the coming months and quarters.For now, I believe much of the challenging macro factors are priced into the stock and would not be surprised if we saw the bottom approaching. Thus, I believe long-term investors should find this pullback as a good buying opportunity.This article was written by The Software Side of Life. This article is for reference only.","news_type":1},"isVote":1,"tweetType":1,"viewCount":208,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9949335262,"gmtCreate":1678353751256,"gmtModify":1678353755238,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good 👍🏻&nbsp;","listText":"Good 👍🏻&nbsp;","text":"Good 👍🏻","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949335262","repostId":"1190963246","repostType":2,"repost":{"id":"1190963246","pubTimestamp":1678334339,"share":"https://ttm.financial/m/news/1190963246?lang=&edition=fundamental","pubTime":"2023-03-09 11:58","market":"us","language":"en","title":"Sea Limited Just Pulled Off a Minor Miracle: Time to Buy?","url":"https://stock-news.laohu8.com/highlight/detail?id=1190963246","media":"Motley Fool","summary":"Sea Limited posted a surprise net profit in the fourth quarter, a shocking turnaround from a year ago.","content":"<html><head></head><body><h2>KEY POINTS</h2><ul><li>Sea was surprisingly profitable in the fourth quarter.</li><li>Even more surprising, it was profitable across each of its three segments.</li><li>Sustainably profitable growth could enable Sea&#39;s stock to continue rising, even after this year&#39;s big gains.</li></ul><p>Southeast Asia&#39;s video game, e-commerce, and digital finance platform <b>Sea Limited</b> was perhaps the poster child for the pandemic. With the underpenetration of e-commerce and digitization in the region heading into the pandemic, Sea&#39;s growth absolutely exploded in 2020 and 2021, sending shares as high as $372 in late 2021.</p><p>Yet a violent reversal of pandemic trends and high inflation decimated pandemic winners, and Sea&#39;s stock plummeted almost 90% to a low of $40.66 last year.</p><p>In response to the changing landscape, Sea&#39;s management also reversed strategies, from a focus on top-line growth to an extreme focus on profitability. On the company&#39;s recent fourth-quarter release, that change of strategy yielded remarkable results -- a highly encouraging development for shareholders.</p><h2>Now profitable across all three segments</h2><p>Prior to last year, Sea only had one profitable business: its Garena video game segment. In the pandemic and pre-pandemic years, Sea used those profits to fund the build-out of its Shopee e-commerce platform and its SeaMoney digital financial services platform. Both of those businesses took lots of capital to build, and each of those segments regularly inked eye-popping losses in the hundreds of millions of dollars per quarter.</p><p>However, in the company&#39;s recent fourth-quarter 2022 release, not only did the company report operating profits and free cash flow at the overall company level, but each of those three segments is now profitable in its own right.</p><table><thead><tr><th><p>METRIC</p></th><th><p><b>DIGITAL ENTERTAINMENT</b></p></th><th><p><b>E-COMMERCE</b></p></th><th><p><b>DIGITAL FINANCIAL SERVICES</b></p></th><th><p><b>OTHER SERVICES</b></p></th><th><p><b>UNALLOCATED EXPENSES</b></p></th><th><p><b>TOTAL</b></p></th></tr></thead><tbody><tr><td><p>Q4 2021 revenue (millions)</p></td><td><p>$1,415.0</p></td><td><p>$1,595.1</p></td><td><p>$197.5</p></td><td><p>$14.5</p></td><td><p>N/A</p></td><td><p>$3,222.1</p></td></tr><tr><td><p>Q4 2021 operating profit (millions)</p></td><td><p>$858.8</p></td><td><p>($941.0)</p></td><td><p>($157.6)</p></td><td><p>($59.1)</p></td><td><p>(143.1)</p></td><td><p>(442.1)</p></td></tr><tr><td><p>Q4 2022 revenue (millions)</p></td><td><p>$948.9</p></td><td><p>$2,102.7</p></td><td><p>$380.2</p></td><td><p>$19.8</p></td><td><p>N/A</p></td><td><p>$3,451.6</p></td></tr><tr><td><p>Q4 2022 operating profit (millions)</p></td><td><p>$400.2</p></td><td><p>$109.5</p></td><td><p>$61.8</p></td><td><p>($28.7)</p></td><td><p>($199.9)</p></td><td><p>$342.9</p></td></tr></tbody></table><p>DATA SOURCE: SEA LIMITED Q4 EARNINGS RELEASE.</p><p>As you can see, Sea managed to grow operating profit by $785 million relative to the year-ago quarter, even as it only increased revenue by $229.5 million. And the profit gains are even more shocking when one considers operating profit from the digital entertainment segment<i>dropped</i>by $458 million in that time. That means between Shopee and Sea Money, Sea was able to grow profits by over $1.2 billion -- more than revenue grew across those two segments.</p><p>At the beginning of 2022, Sea had promised Shopee would generate positive adjustedEBITDAbefore headquarters costs by the fourth quarter of this year, but fourth-quarter results far exceeded those goals, generating not just EBITDA, but also operating profit. That&#39;s why the stock surged more than 20% on Tuesday, defying the overall market&#39;s 1.5% drop that day.</p><h2>But the story gets even better</h2><p>Not only did operating profits flip to positive territory across each of Sea&#39;s main segments, but the company also appears to have been free-cash-flow-positive. While Sea hasn&#39;t released its annual report yet and didn&#39;t itemize its cash-flow statement in the release, the company did note it generated about $209.8 million in excess cash during the quarter.</p><p>Sea&#39;s cash and equivalents actually declined $401.6 million in the quarter, but that was due to another positive development: Management repurchased some of Sea&#39;s 0.25% convertible bonds due in 2026, buying back $817.2 million of bond principal for only $611.3 million -- a 25% discount.</p><p>That&#39;s like borrowing $100 and only paying back $75 -- essentially, getting paid to borrow.</p><p>Obviously, Sea had the benefit of some very fortunate timing, as it issued the convertible bonds in September 2021, near the very top of the market. In the fourth quarter, Sea bought some of the bonds back at the bottom -- a near-perfect bit of selling high and buying low.</p><p>While there was certainly some luck behind that, this episode shows that management not only has savvy operational expertise, but also financial markets insight -- an uncommon combination for a tech company.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c432718412f9a053a4fb5cf485b10a36\" tg-width=\"2000\" tg-height=\"1333\" width=\"100%\" height=\"auto\"/><span>IMAGE SOURCE: GETTY IMAGES.</span></p><p>How the company did it</p><p>When asked about the remarkable turn to profitability on the earnings call, CEO Forrest Li said: &#34;There&#39;s a lot of hard work, and we make sacrifices. We exited the markets, we downsized operations, we walked through all these initiatives to decide which is core, which is less core, what we need to prioritize and what we need to deprioritize.&#34;</p><h2>Looking further under the hood, three main tactics stood out:</h2><p>First, Sea raised prices to sellers on its Shopee marketplace, or its &#34;take rate,&#34; and was also helped by increased high-margin advertising revenue. Revenue for Shopee surged 31.8%, with core marketplace revenue outside of first-party sales up an even higher 43.5%. That high revenue growth came even while gross merchandise volume (GMV) actually <i>declined</i> 1%, although GMV rose 7.7% in constant currency.</p><p>While some may scoff that last quarter&#39;s growth came mostly from raising prices, remember, the sign of a good business is that it can raise prices without meaningfully losing customers. Sea seems to fit that description.</p><p>And even that muted GMV growth was impressive in light of sales and marketing expenses declining a stunning 55% for Shopee and 61% at the overall company level. So, the fact that Shopee could still grow GMV on a constant currency basis while cutting marketing expenses by more than half says something about its brand presence across its core markets.</p><p>Finally, management also pointed to meaningful logistics cost savings, without going into too much detail. While the company doesn&#39;t break out gross profit growth specifically for Shopee, the company did grow overall gross profit 29.5%, much higher than overall revenue growth of 7.1%.</p><p>Not only did Sea improve logistics costs per package in the quarter, but Li added there is even more room to improve, saying: &#34;[T]his will remain an important area of focus going forward. ... While we have already seen early results from these efforts, there is still greater room for improvement.&#34;</p><h2>Growing revenue in spite of cost cuts is what this market wants to see</h2><p>All in all, Sea was able to raise prices while cutting logistics and marketing costs, and still maintained GMV growth on a constant currency basis. Moreover, management paid off some debt at a big discount, further lowering risk.</p><p>This is awfully impressive, and bodes well for Sea&#39;s stock -- even after Tuesday&#39;s big jump.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited Just Pulled Off a Minor Miracle: Time to Buy?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited Just Pulled Off a Minor Miracle: Time to Buy?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-09 11:58 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KEY POINTSSea was surprisingly profitable in the fourth quarter.Even more surprising, it was profitable across each of its three segments.Sustainably profitable growth could enable Sea's stock to ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.fool.com/investing/2023/03/08/sea-limited-just-pulled-off-a-minor-miracle-time-t/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190963246","content_text":"KEY POINTSSea was surprisingly profitable in the fourth quarter.Even more surprising, it was profitable across each of its three segments.Sustainably profitable growth could enable Sea's stock to continue rising, even after this year's big gains.Southeast Asia's video game, e-commerce, and digital finance platform Sea Limited was perhaps the poster child for the pandemic. With the underpenetration of e-commerce and digitization in the region heading into the pandemic, Sea's growth absolutely exploded in 2020 and 2021, sending shares as high as $372 in late 2021.Yet a violent reversal of pandemic trends and high inflation decimated pandemic winners, and Sea's stock plummeted almost 90% to a low of $40.66 last year.In response to the changing landscape, Sea's management also reversed strategies, from a focus on top-line growth to an extreme focus on profitability. On the company's recent fourth-quarter release, that change of strategy yielded remarkable results -- a highly encouraging development for shareholders.Now profitable across all three segmentsPrior to last year, Sea only had one profitable business: its Garena video game segment. In the pandemic and pre-pandemic years, Sea used those profits to fund the build-out of its Shopee e-commerce platform and its SeaMoney digital financial services platform. Both of those businesses took lots of capital to build, and each of those segments regularly inked eye-popping losses in the hundreds of millions of dollars per quarter.However, in the company's recent fourth-quarter 2022 release, not only did the company report operating profits and free cash flow at the overall company level, but each of those three segments is now profitable in its own right.METRICDIGITAL ENTERTAINMENTE-COMMERCEDIGITAL FINANCIAL SERVICESOTHER SERVICESUNALLOCATED EXPENSESTOTALQ4 2021 revenue (millions)$1,415.0$1,595.1$197.5$14.5N/A$3,222.1Q4 2021 operating profit (millions)$858.8($941.0)($157.6)($59.1)(143.1)(442.1)Q4 2022 revenue (millions)$948.9$2,102.7$380.2$19.8N/A$3,451.6Q4 2022 operating profit (millions)$400.2$109.5$61.8($28.7)($199.9)$342.9DATA SOURCE: SEA LIMITED Q4 EARNINGS RELEASE.As you can see, Sea managed to grow operating profit by $785 million relative to the year-ago quarter, even as it only increased revenue by $229.5 million. And the profit gains are even more shocking when one considers operating profit from the digital entertainment segmentdroppedby $458 million in that time. That means between Shopee and Sea Money, Sea was able to grow profits by over $1.2 billion -- more than revenue grew across those two segments.At the beginning of 2022, Sea had promised Shopee would generate positive adjustedEBITDAbefore headquarters costs by the fourth quarter of this year, but fourth-quarter results far exceeded those goals, generating not just EBITDA, but also operating profit. That's why the stock surged more than 20% on Tuesday, defying the overall market's 1.5% drop that day.But the story gets even betterNot only did operating profits flip to positive territory across each of Sea's main segments, but the company also appears to have been free-cash-flow-positive. While Sea hasn't released its annual report yet and didn't itemize its cash-flow statement in the release, the company did note it generated about $209.8 million in excess cash during the quarter.Sea's cash and equivalents actually declined $401.6 million in the quarter, but that was due to another positive development: Management repurchased some of Sea's 0.25% convertible bonds due in 2026, buying back $817.2 million of bond principal for only $611.3 million -- a 25% discount.That's like borrowing $100 and only paying back $75 -- essentially, getting paid to borrow.Obviously, Sea had the benefit of some very fortunate timing, as it issued the convertible bonds in September 2021, near the very top of the market. In the fourth quarter, Sea bought some of the bonds back at the bottom -- a near-perfect bit of selling high and buying low.While there was certainly some luck behind that, this episode shows that management not only has savvy operational expertise, but also financial markets insight -- an uncommon combination for a tech company.IMAGE SOURCE: GETTY IMAGES.How the company did itWhen asked about the remarkable turn to profitability on the earnings call, CEO Forrest Li said: \"There's a lot of hard work, and we make sacrifices. We exited the markets, we downsized operations, we walked through all these initiatives to decide which is core, which is less core, what we need to prioritize and what we need to deprioritize.\"Looking further under the hood, three main tactics stood out:First, Sea raised prices to sellers on its Shopee marketplace, or its \"take rate,\" and was also helped by increased high-margin advertising revenue. Revenue for Shopee surged 31.8%, with core marketplace revenue outside of first-party sales up an even higher 43.5%. That high revenue growth came even while gross merchandise volume (GMV) actually declined 1%, although GMV rose 7.7% in constant currency.While some may scoff that last quarter's growth came mostly from raising prices, remember, the sign of a good business is that it can raise prices without meaningfully losing customers. Sea seems to fit that description.And even that muted GMV growth was impressive in light of sales and marketing expenses declining a stunning 55% for Shopee and 61% at the overall company level. So, the fact that Shopee could still grow GMV on a constant currency basis while cutting marketing expenses by more than half says something about its brand presence across its core markets.Finally, management also pointed to meaningful logistics cost savings, without going into too much detail. While the company doesn't break out gross profit growth specifically for Shopee, the company did grow overall gross profit 29.5%, much higher than overall revenue growth of 7.1%.Not only did Sea improve logistics costs per package in the quarter, but Li added there is even more room to improve, saying: \"[T]his will remain an important area of focus going forward. ... While we have already seen early results from these efforts, there is still greater room for improvement.\"Growing revenue in spite of cost cuts is what this market wants to seeAll in all, Sea was able to raise prices while cutting logistics and marketing costs, and still maintained GMV growth on a constant currency basis. Moreover, management paid off some debt at a big discount, further lowering risk.This is awfully impressive, and bodes well for Sea's stock -- even after Tuesday's big jump.","news_type":1},"isVote":1,"tweetType":1,"viewCount":289,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9949017793,"gmtCreate":1678237797313,"gmtModify":1678237801446,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"👍🏻💐","listText":"👍🏻💐","text":"👍🏻💐","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9949017793","repostId":"1164379039","repostType":4,"repost":{"id":"1164379039","pubTimestamp":1678234215,"share":"https://ttm.financial/m/news/1164379039?lang=&edition=fundamental","pubTime":"2023-03-08 08:10","market":"sg","language":"en","title":"Sea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce","url":"https://stock-news.laohu8.com/highlight/detail?id=1164379039","media":"Seeking Alpha","summary":"Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourt","content":"<html><head></head><body><p>Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.</p><p><img src=\"https://static.tigerbbs.com/eb56c7a379a006b590b127de2b147c05\" tg-width=\"840\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>For the period ending December 31, Sea (SE) earned an adjusted 72 cents per share as revenue rose 7.1% year-over-year to $3.45B. Analysts were expecting a loss of 55 cents per share on $3.05B in revenue.</p><p>Included in the figure was $2.1B in revenue from its e-commerce division, a rise of 31.8% year-over-year, as consumer continued to flock to its Shopee platform.</p><p>The company also generated $948.9M in revenue from digital entertainment in the period, up from $892.9M in the year-ago period, while revenue attributed to digital financial services soared 92.5% year-over-year to $380.2M.</p><p>In a statement, Forrest Li, Sea&#39;s (SE) Chairman and CEO said the company is &#34;closely monitoring&#34; the global economic uncertainty, but the company looks well positioned to compete.</p><p>&#34;Given the macro uncertainty and our recent strong pivot, we are closely monitoring the market environment and we will continue to adjust our pace and fine-tune our operations accordingly,&#34; Li said. &#34;While there may be near-term fluctuations in our performance, we remain highly confident in the long-term growth potential of our markets and fully focused on capturing this opportunity.&#34;</p><p>Last month, Duquesne Family Office, the hedge fund owned by billionaire Stanley Druckenmiller, disclosed that it had exited its position in Sea Ltd. (SE) during the fourth-quarter, while making several other changes to its portfolio.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Ltd. Surges Almost 22% As Q4 Results Top Expectations, Aided By E-Commerce\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-08 08:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit....</p>\n\n<a href=\"https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/news/3944814-sea-ltd-surges-q4-results-top-expectations-e-commerce","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1164379039","content_text":"Sea Ltd. (NYSE:SE) shares jumped almost 22% on Tuesday after the Singapore tech giant reported fourth-quarter results that blew past Wall Street expectations, led by strength in its e-commerce unit.For the period ending December 31, Sea (SE) earned an adjusted 72 cents per share as revenue rose 7.1% year-over-year to $3.45B. Analysts were expecting a loss of 55 cents per share on $3.05B in revenue.Included in the figure was $2.1B in revenue from its e-commerce division, a rise of 31.8% year-over-year, as consumer continued to flock to its Shopee platform.The company also generated $948.9M in revenue from digital entertainment in the period, up from $892.9M in the year-ago period, while revenue attributed to digital financial services soared 92.5% year-over-year to $380.2M.In a statement, Forrest Li, Sea's (SE) Chairman and CEO said the company is \"closely monitoring\" the global economic uncertainty, but the company looks well positioned to compete.\"Given the macro uncertainty and our recent strong pivot, we are closely monitoring the market environment and we will continue to adjust our pace and fine-tune our operations accordingly,\" Li said. \"While there may be near-term fluctuations in our performance, we remain highly confident in the long-term growth potential of our markets and fully focused on capturing this opportunity.\"Last month, Duquesne Family Office, the hedge fund owned by billionaire Stanley Druckenmiller, disclosed that it had exited its position in Sea Ltd. (SE) during the fourth-quarter, while making several other changes to its portfolio.","news_type":1},"isVote":1,"tweetType":1,"viewCount":186,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9997207864,"gmtCreate":1661814469960,"gmtModify":1676536581716,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9997207864","repostId":"1150131944","repostType":2,"repost":{"id":"1150131944","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":1,"media_name":"Dow Jones","id":"1012688067","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1661785321,"share":"https://ttm.financial/m/news/1150131944?lang=&edition=fundamental","pubTime":"2022-08-29 23:02","market":"us","language":"en","title":"Apple, Alphabet, and Other Big Tech Stocks Extend Losses","url":"https://stock-news.laohu8.com/highlight/detail?id=1150131944","media":"Dow Jones","summary":"Major technology stocks such as Apple and Alphabet extended losses Monday after Federal Reserve Chai","content":"<html><head></head><body><p>Major technology stocks such as <a href=\"https://laohu8.com/S/AAPL\">Apple</a> and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.</p><p>Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.</p><p>The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.</p><p><a href=\"https://laohu8.com/S/AAPL\">Apple </a> was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.</p><p>Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.</p><p>Shares of <a href=\"https://laohu8.com/S/GOOGL\">Alphabet </a>, the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.</p><p><img src=\"https://community-static.tradeup.com/news/969c206ad53e5dc436c63aa82513cdc4\" tg-width=\"459\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.</p><p>The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.</p><p>Shares of other tech giants also were trading lower Monday. <a href=\"https://laohu8.com/S/MSFT\">Microsoft </a> was down 1.36% after slumping 3.9% on Friday. <a href=\"https://laohu8.com/S/AMZN\">Amazon.com </a> declined 1.14% after the stock finished Friday down 4.8%.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple, Alphabet, and Other Big Tech Stocks Extend Losses</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple, Alphabet, and Other Big Tech Stocks Extend Losses\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1012688067\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2022-08-29 23:02</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p>Major technology stocks such as <a href=\"https://laohu8.com/S/AAPL\">Apple</a> and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.</p><p>Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.</p><p>The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.</p><p><a href=\"https://laohu8.com/S/AAPL\">Apple </a> was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.</p><p>Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.</p><p>Shares of <a href=\"https://laohu8.com/S/GOOGL\">Alphabet </a>, the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.</p><p><img src=\"https://community-static.tradeup.com/news/969c206ad53e5dc436c63aa82513cdc4\" tg-width=\"459\" tg-height=\"470\" width=\"100%\" height=\"auto\"/></p><p>Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.</p><p>The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.</p><p>Shares of other tech giants also were trading lower Monday. <a href=\"https://laohu8.com/S/MSFT\">Microsoft </a> was down 1.36% after slumping 3.9% on Friday. <a href=\"https://laohu8.com/S/AMZN\">Amazon.com </a> declined 1.14% after the stock finished Friday down 4.8%.</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"GOOG":"谷歌","MSFT":"微软","AAPL":"苹果"},"source_url":"","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1150131944","content_text":"Major technology stocks such as Apple and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.Apple  was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.Shares of Alphabet , the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.Shares of other tech giants also were trading lower Monday. Microsoft  was down 1.36% after slumping 3.9% on Friday. Amazon.com  declined 1.14% after the stock finished Friday down 4.8%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":194,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9957020763,"gmtCreate":1676791168453,"gmtModify":1676791173217,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good.. ageed on this","listText":"Good.. ageed on this","text":"Good.. ageed on this","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9957020763","repostId":"1188995761","repostType":4,"repost":{"id":"1188995761","pubTimestamp":1676771503,"share":"https://ttm.financial/m/news/1188995761?lang=&edition=fundamental","pubTime":"2023-02-19 09:51","market":"us","language":"en","title":"Sea Limited: Best Contrarian Opportunity For The E-Commerce Leader","url":"https://stock-news.laohu8.com/highlight/detail?id=1188995761","media":"Seeking Alpha","summary":"SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea L","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>The contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited&#39;s e-commerce business, Shopee.</li><li>Shopee continues to bring solid market share in its core regions as a result of strong value propositions to customers and sellers.</li><li>Shopee has been gaining market share at the expense of competitors, bringing increasing scale and better unit economics to Shopee.</li><li>The company has been focused on profitability and long-term sustainability of the business, driving improvements in margins and accelerating its path to profitability.</li><li>My 1-year target price for Sea Limited is $94.51 based on a sum of the parts valuation model. This implies 41% upside from current levels.</li></ul><p><b>Investment thesis</b></p><p>With misunderstanding and uncertainty comes opportunity.</p><p>I think that Sea Limited&#39;s (NYSE: SE) valuation reflects uncertainty. Based on the consensus estimates on Bloomberg, Sea Limited is now trading at 45x FY2024 EBITDA. This is for a company with leading positions in gaming, e-commerce and fintech in the markets that it operates in. This is for a company that is lazer focused on cost cutting and turning EBITDA positive on its e-commerce business. This is for a company that is still expected to grow at a double-digit revenue growth in the medium to longer term.</p><p>I don&#39;t think that investors are pricing in the full potential for Sea Limited&#39;s e-commerce business, Shopee. Its e-commerce arm continues to remain the leader in its core markets and has captured top mind share in customers in the region as a result of its strong value proposition to customers. In addition, Shopee&#39;s competitors in the region, as analyzed below, are not as competitive as Shopee continues to gain market share in the region.</p><p>In an earlier deep dive article into Sea Limited, I shared with members of Outperforming the Market about the huge opportunities the three segments of the company (Garena, Shopee and SeaMoney) will bring in the long-term and how the company&#39;s beaten down stock has reached a valuation that makes sense for investors to enter today. While addressing the members questions on Sea Limited, I realized that there were many misconceptions and interest in Sea Limited&#39;s Shopee. As such, in this article, I aim to share with readers more about the fundamentals of Shopee, how it compares with local competitors in the market and what Shopee&#39;s future looks like.</p><p>I have written earlier Sea Limited articles, where I share my deep dive research into Garenahere, and why Sea Limited&#39;s Garena and SeaMoney are valued at zero at current valuations here.</p><p><b>Deep dive into e-commerce (Shopee)Brief introduction and history of Shopee</b></p><p>As shared earlier, Shopee is Sea Limited&#39;s e-commerce platform. The history of Shopee is relatively short given that it was first launched in Southeast Asia and Taiwan in 2015. The e-commerce platform then made its way into Brazil in 2019. Subsequently, the company even expanded its Shopee platform to new markets in Latin America like Mexico, Chile and Colombia and to Poland and Spain as well. However, the core Shopee markets today are Southeast Asia and Taiwan, as well as Brazil, as Shopee exited markets which it deemed unprofitable in 2022 to preserve capital as the market conditions started to change. This will be discussed further in a later section in this article.</p><p><b>Shopee&#39;s business model</b></p><p>Shopee was one of the first few e-commerce players in Southeast Asia in the early days of its operating history in 2015 and gradually emerged as a leading player in the region as a result of a strong value add to both customers and sellers.</p><p><b>Value proposition for customers</b></p><p>The first value proposition, and a relatively simple one, was that Shopee&#39;s approach of gamifying the experience of e-commerce and online shopping brought a social element to the e-commerce platform that others were unable to replicate. By having customers win coupons, play games to win rewards and get rewards for logging in daily, the platform was able to build a strong social element and it became not just a platform to these customers, but also a good experience. As a result of gamifying the experience of shopping online, the company actually managed to bring greater traffic to its platform, increase user engagement and it resulted in more e-commerce sales and larger basket sizes.</p><p>The second value proposition is equally important as customers are ultimately finding the lowest prices for goods they wish to buy and the best discounts available in the market. As a result of promotional and marketing events like the 12.12 sale, customers can get outsized deals and cashbacks through shopping on Shopee.</p><p>The third value proposition is that customers, as buyers on the e-commerce platform are protected and the platform is secure. It was very important in the early days of Shopee to demonstrate that it could provide a secure and safe shopping environment for buyers. Especially in the early days when not everything was bought online or not everyone has had the experience of using an e-commerce platform, there was a need to assure buyers that the sellers are legitimate, their goods are as advertised and that there are no frauds or misrepresentation on Shopee. Features on Shopee like seller verification helped to make sure that the sellers on the Shopee platform have been verified and are subject to certain terms and conditions on signing up to be a seller. In addition, Shopee does an automated screen based on the product categories, names and descriptions to identify inappropriate or illegal items and the listings that are deemed to be inappropriate or high risk are removed from the platform until cleared by the teams in Shopee. There are other features like Shopee Guarantee, which holds payments made by buyers until the ordered products have been deemed received by the buyer. This will certainly help reduce settlement risk as buyers can then be assured that their payment will only go through if they receive the items that they have bought. Lastly, if all else fails, Shopee has a decent dispute resolution team that helps to ensure that buyers or sellers can have a proper way to resolve disputes and seek compensation if necessary.</p><p>The fourth value proposition is a subtle one, but Shopee is centered around mobile devices, and enabled e-commerce shopping to be done on the go. This is pertinent as customers were increasingly moving from the PC to their mobile devices as customers started using their mobile devices for more and more applications.</p><p>Last but not least, the final value proposition that makes customers like Shopee is the strong payment and logistics infrastructure that enables seamless payment and quick and reliable deliveries. For Shopee payments, as highlighted above, they are protected by Shopee Guarantee, which will ensure that buyers get their items before the payment goes through to sellers. In terms of payment types, there are a wide variety of payment options, including credit cards, bank transfers or mobile wallet services. Most of the transactions on Shopee have been integrated with the Shopee Pay, which is SeaMoney&#39;s payment infrastructure, and this is the case for most of its core markets. For Shopee, developing the key logistics infrastructure was key to developing e-commerce in Southeast Asia and Taiwan as these are markets with difficult to access terrain and underdeveloped infrastructure. Shopee works with the largest and most reliable logistics service providers in its respective markets and are usually able to get lower rates and better terms with these logistics service providers as a result of Shopee&#39;s large scale of transactions. The buyers and sellers are also able to track the delivery status of their purchased items, which provides added assurance for e-commerce transactions.</p><p><b>Value proposition for sellers</b></p><p>The first value proposition for sellers has to be the strong support that Shopee provides sellers. An e-commerce platform is only as good as the variety and quality of its seller base. This is likely why Shopee provides strong support to sellers as it has a large team of staff with local knowledge that provides quick and localized assistance to sellers when necessary.</p><p>The second value proposition is that Shopee provides sellers with a one-stop solution for selling needs, including an integrated payment system, logistics and fulfillment services. Although Shopee does not require its sellers to use its logistics service providers, most of its sellers choose to use them due to the good pricing and reliable service quality of these providers.</p><p>Lastly and perhaps most importantly, Shopee has a large and fast-growing user base that sellers can sell to. This is undoubtedly one of the greatest incentives for sellers as they can then have a larger market to sell to and a larger addressable market.</p><p><b>Scalability of the marketplace business model</b></p><p>Shopee has been hugely successful in scaling up as a marketplace platform for reasons highlighted above. It provided buyers with a reliable, social and fun e-commerce experience while sellers are given strong support as Shopee provides one-stop solutions for sellers. That said, the marketplace business model was the key in ensuring that the business is highly scalable.</p><p>Another reason for the rapid scaling of Shopee is the social and gamification elements that enabled Shopee to acquire and retain users better, and increase their time spent on the platform.</p><p>As a result, in 2021, Shopee was the largest e-commerce platform in Southeast Asia and Taiwan, and it is also gaining traction in Brazil.</p><p><b>Success in marketing and promotional activities</b></p><p>Shopee started to increase brand awareness through its campaigns each month, like the 11.11 Big Sale and 12.12 Birthday Sale. As a result of the promotional activities on these special days in the month, buyers are likely to flock to Shopee during these special promotional events to get larger discounts and save money on their e-commerce purchases. As a result, they associate these dates with Shopee and large discounts and savings.</p><p>Success in these marketing and promotional campaigns have led to GMV and market share growth and helped increase the mind share of Shopee in the buyers in its core markets.</p><p><b>Monetization opportunities</b></p><p>As Shopee continues to grow in scale, with the sticky nature of its users due to its social and gamification features, the company can look to monetize this large Shopee user base. While the company is focused on market share growth and GMV at the moment, as the platform continues to scale, I think that we will see Shopee offer sellers paid advertising services, charge transaction-based fees and charge for more value-added services. These are some ways in which Shopee can continue to monetize the large and engaged user base that it has on the platform.</p><p><b>Expansion into new markets</b></p><p>Shopee started its operations in Southeast Asia and Taiwan and later, Brazil. In 2021, Shopee looked to expand its success beyond these markets and move to other markets, which included markets in Europe, India, and other markets in Latin America. It was not meant to be for Shopee&#39;s international expansion strategy, as I have highlighted in my Sea Limited article, as the company started exiting markets which it deems non-core to preserve capital and Shopee dipped its toes into the India market, a large market with tough competitors inMarch 2021, and with the success of Free Fire in India, saw India as a potential market for its e-commerce business. However, given the ban of Free Fire as highlighted in part 1 of my deep dive series, the company eventually realized that there were high regulatory and government risks in entering the India market. As a result, in March of 2022, the company exited India and given the relatively early stage of the operations in India and the cautious expansion in the country, there was a relatively limited impact to current Shopee business. The impact came from the loss of a large and fast-growing addressable market as a result of exiting from India.</p><p>Shopee aggressively expanded in Europe as it entered France, Spain and Poland in 2021. However, in March 2022 and June 2022, Shopee exited France and Spain respectively. As the company was in France and Spain for a relatively short period of time, during the preliminary pilot phase of operations in both countries, Shopee decided to be prudent and disciplined in expanding into new markets and only invest resources into a market which it thinks that it can compete meaningfully in the long-term.</p><p>While Shopee saw strong traction in Brazil based on data fromdata.ai, suggesting that the company is ranked first by average monthly active users in the Shopping category in Brazil, the company tried to replicate its e-commerce strategy in other Latin America markets, which resulted in expanding into Mexico, Chile and Colombia in 2021. In 2022, as a result of increasing global macro uncertainty, Shopee needed to focus its operations on core markets and decided that they will use a cross border model in Mexico, Colombia and Chile, downsizing its operations there to cross border operations.</p><p><img src=\"https://static.tigerbbs.com/7f913da39ffb41b9ffe9b7ef9a47e4af\" tg-width=\"637\" tg-height=\"264\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Shopee rationalization efforts (Author generated)</p><p>In my view, the decision to exit markets in which it has not yet had a deep and strong presence in before the turn of the tides is a good move by management as that enabled the preservation of capital in early 2022 and prevented the company from needing more money to fund expansion into new markets. In particular, the exit from India was a great one in my view as the e-commerce market in India is saturated and highly competitive, with players like Amazon (AMZN), Meesho and Flipkart competing with Shopee. The cash burn needed to make Shopee a success in India would not have been possible given the reduction of liquidity in the later part of 2022 as the capital markets started to feel the jitters of higher interest rates and the potential of a recession. I think that the ability to exit markets to ensure the long-term sustainability of the business and expand into new markets prudently gives me more confidence in the management of Shopee.</p><p><b>Shopee operational metrics</b></p><p>Shopee saw huge growth in 2021 as the pandemic helped to fuel the growth and adoption of e-commerce in Shopee&#39;s key markets. With movement restrictions and lockdowns, consumers needed to get goods and shop online. The strong growth fueled by the pandemic is likely to cause a high base effect in 2022 as consumers go back to work and school and are able to buy from brick-and-mortar stores. That said, the trend that the pandemic accelerated will likely stay in the future and the pandemic brought a net positive effect to increase the penetration of e-commerce in Shopee&#39;s key markets. As a result, in 2023, we are likely to lap that high base effect and I am of the opinion that Shopee can reaccelerate its growth in core markets and continue to increase penetration in these markets.</p><p><img src=\"https://static.tigerbbs.com/b2e62828d666baed6120d4a990fb597f\" tg-width=\"640\" tg-height=\"111\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Shopee operational metrics (Author generated)</p><p><b>Shopee competitive landscape</b></p><p>While Shopee is a leader in the Southeast Asia and Taiwan markets, there are other players vying for market share in these regions. In particular, Alibaba&#39;s (BABA) Lazada has been operating in the region since 2012. Despite its longer operating history and backing from Alibaba, the company continued to trail behind Shopee. In my opinion, this is because of the social and gaming element that Shopee has brought into its platform that brought higher user engagement and thus, it attracts and retains users on the platform better. Also, the marketing and promotional campaigns launched by Shopee seem to have created better mind share in its core markets of Southeast Asia and Taiwan at least, resulting in better performance in sales events and marketing and promotional campaigns. Lastly, the platform that is better able to provide buyers with the best discounts and savings, as well as a better user experience will ultimately have the larger active user base. As a result of efforts by Shopee to protect buyers and large discounts on the platform, Shopee has been able to obtain better mind share from customers and result in better market share in the region. This results in a fly wheel effect as the larger buyer user base attracts more sellers on the Shopee platform, which brings about better deals and more variety on the Shopee platform compared to Lazada.</p><p>In Lazada&#39;s fiscal year of 2021 ending on March 31st, the company reported revenues of $556,000, down more than65%from 2020 when it recorded $1.6 million in revenue. In 1Q21 alone, Shopee recorded revenues of$922 million.</p><p>Lazada recorded $21 billion in GMV in 2021 while Shopee recorded $63 billion GMV in 2021, implying that as of the full year of 2021, Shopee&#39;s e-commerce business seems to be almost three times larger than that of Lazada.</p><p>This goes to show the strong market share gain that Shopee has been experiencing, at the expense of Lazada, and how Shopee is able to compete and gain share in the competitive landscape.</p><p>Tokopedia is another company that competes in the e-commerce space, but with a larger focus on Indonesia. Tokopedia merged with Gojek, which resulted in the combined entity being calledGoTo Group. With the large population and fast growth profile of the Indonesia market, the threat of GoTo Group in Indonesia remains relevant. In 2021, GoTo Group recorded 6,264 billion Indonesian Rupiah in revenues, which translates to approximately $401 million in revenues for the year. This compares to the$5.2 billion in revenues that Shopee generated in 2021. As a result, Shopee is almost 13 times larger than GoTo Group&#39;s e-commerce operations. The larger scale does bring benefits like economies of scale, better unit economics and attracting more buyers and sellers to the platform. At the end of the day, Shopee needs to continue to ensure that it remains relevant and attractive in Indonesia by continuing to improve user experience and bring innovation that adds value to both buyers and sellers.</p><p>In its existing markets, as can be seen below, Shopee has a scale advantage as it is significantly larger than that of Lazada&#39;s or GoTo&#39;s revenues. This implies that Shopee&#39;s market share by revenue is at least nine times more than Lazada and Shopee&#39;s market share by revenue is almost 13 times more than GoTo Group. The competitive landscape in Shopee&#39;s core markets does seem favorable given the large-scale benefits that Shopee can enjoy with its market share in these markets. In addition, Shopee continues to be able to compete meaningfully and gain share in these markets as it looks to break even in the Southeast Asia and Taiwan markets.</p><p><img src=\"https://static.tigerbbs.com/31ed5b7f430ecb3ee0a8b18f3261a92d\" tg-width=\"640\" tg-height=\"102\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Major e-commerce companies revenues relative to Shopee (Author generated)</p><p>The global e-commerce market is becoming very competitive, in my view. The largest e-commerce player, Amazon, continues to look to expand internationally and remains a well-capitalized player with strong branding. Other players in specific markets like MercadoLibre (MELI) in Latin America and Coupang (CPNG) in South Korea are well established players in their own respective markets. As a result, international expansion for Shopee needs to be done prudently in markets in which it can compete and adds strong value to. While I think that Shopee may expand to international markets in the long-term, the near-term goal is still turning profitable, focusing on core markets and ensuring sustainability of the business.</p><p><b>Valuation</b></p><p>As highlighted before, Sea Limited is now trading at 45x FY2024 EBITDA. Considering the significant EBITDA expansion to come as a result of a leaner cost structure as a result of its cost optimization initiatives and improving economies of scale as the business grows, I think that we will likely see a very strong period of EBITDA growth in the near-term.</p><p>To value Sea Limited, I use a sum of the parts model. I assume Garena to be valued at 11x FY2024 P/E, Shopee to be valued at 3x FY 2024 P/S and SeaMoney to be valued at 4x FY2024 P/S.</p><p>My 1-year target price for Sea Limited is thus $94.51. This implies 41% upside from current levels.</p><p><b>Conclusion</b></p><p>As can be seen in the article, Shopee is a leader in e-commerce, a fundamentally growing business and one whose profitability and margin profile is improving as we speak.</p><p>While I think that there could have been some disappointments with the company pulling out of its non-core markets in which it was doing pilot trials in, I think that we are starting to lap the high base effect we saw in 2022 in the coming year in 2023. In addition, the boost in Shopee being EBITDA positive in Southeast Asia and Taiwan is certainly a boost in confidence for the company&#39;s business model. By 2025, management expects that both Shopee and SeaMoney together, will be able to generate sufficient cash to self-fund their own long-term growth.</p><p>My one-year price target for Sea Limited is thus $94.51. This implies a 41% upside from current levels.</p></body></html>","source":"seekingalpha_fund","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Best Contrarian Opportunity For The E-Commerce Leader</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Best Contrarian Opportunity For The E-Commerce Leader\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-19 09:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited's e-commerce business, Shopee.Shopee continues to bring solid market share in its core ...</p>\n\n<a href=\"https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4579506-sea-limited-best-contrarian-opportunity-for-the-e-commerce-leader","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1188995761","content_text":"SummaryThe contrarian opportunity comes as investors are not pricing in the full potential for Sea Limited's e-commerce business, Shopee.Shopee continues to bring solid market share in its core regions as a result of strong value propositions to customers and sellers.Shopee has been gaining market share at the expense of competitors, bringing increasing scale and better unit economics to Shopee.The company has been focused on profitability and long-term sustainability of the business, driving improvements in margins and accelerating its path to profitability.My 1-year target price for Sea Limited is $94.51 based on a sum of the parts valuation model. This implies 41% upside from current levels.Investment thesisWith misunderstanding and uncertainty comes opportunity.I think that Sea Limited's (NYSE: SE) valuation reflects uncertainty. Based on the consensus estimates on Bloomberg, Sea Limited is now trading at 45x FY2024 EBITDA. This is for a company with leading positions in gaming, e-commerce and fintech in the markets that it operates in. This is for a company that is lazer focused on cost cutting and turning EBITDA positive on its e-commerce business. This is for a company that is still expected to grow at a double-digit revenue growth in the medium to longer term.I don't think that investors are pricing in the full potential for Sea Limited's e-commerce business, Shopee. Its e-commerce arm continues to remain the leader in its core markets and has captured top mind share in customers in the region as a result of its strong value proposition to customers. In addition, Shopee's competitors in the region, as analyzed below, are not as competitive as Shopee continues to gain market share in the region.In an earlier deep dive article into Sea Limited, I shared with members of Outperforming the Market about the huge opportunities the three segments of the company (Garena, Shopee and SeaMoney) will bring in the long-term and how the company's beaten down stock has reached a valuation that makes sense for investors to enter today. While addressing the members questions on Sea Limited, I realized that there were many misconceptions and interest in Sea Limited's Shopee. As such, in this article, I aim to share with readers more about the fundamentals of Shopee, how it compares with local competitors in the market and what Shopee's future looks like.I have written earlier Sea Limited articles, where I share my deep dive research into Garenahere, and why Sea Limited's Garena and SeaMoney are valued at zero at current valuations here.Deep dive into e-commerce (Shopee)Brief introduction and history of ShopeeAs shared earlier, Shopee is Sea Limited's e-commerce platform. The history of Shopee is relatively short given that it was first launched in Southeast Asia and Taiwan in 2015. The e-commerce platform then made its way into Brazil in 2019. Subsequently, the company even expanded its Shopee platform to new markets in Latin America like Mexico, Chile and Colombia and to Poland and Spain as well. However, the core Shopee markets today are Southeast Asia and Taiwan, as well as Brazil, as Shopee exited markets which it deemed unprofitable in 2022 to preserve capital as the market conditions started to change. This will be discussed further in a later section in this article.Shopee's business modelShopee was one of the first few e-commerce players in Southeast Asia in the early days of its operating history in 2015 and gradually emerged as a leading player in the region as a result of a strong value add to both customers and sellers.Value proposition for customersThe first value proposition, and a relatively simple one, was that Shopee's approach of gamifying the experience of e-commerce and online shopping brought a social element to the e-commerce platform that others were unable to replicate. By having customers win coupons, play games to win rewards and get rewards for logging in daily, the platform was able to build a strong social element and it became not just a platform to these customers, but also a good experience. As a result of gamifying the experience of shopping online, the company actually managed to bring greater traffic to its platform, increase user engagement and it resulted in more e-commerce sales and larger basket sizes.The second value proposition is equally important as customers are ultimately finding the lowest prices for goods they wish to buy and the best discounts available in the market. As a result of promotional and marketing events like the 12.12 sale, customers can get outsized deals and cashbacks through shopping on Shopee.The third value proposition is that customers, as buyers on the e-commerce platform are protected and the platform is secure. It was very important in the early days of Shopee to demonstrate that it could provide a secure and safe shopping environment for buyers. Especially in the early days when not everything was bought online or not everyone has had the experience of using an e-commerce platform, there was a need to assure buyers that the sellers are legitimate, their goods are as advertised and that there are no frauds or misrepresentation on Shopee. Features on Shopee like seller verification helped to make sure that the sellers on the Shopee platform have been verified and are subject to certain terms and conditions on signing up to be a seller. In addition, Shopee does an automated screen based on the product categories, names and descriptions to identify inappropriate or illegal items and the listings that are deemed to be inappropriate or high risk are removed from the platform until cleared by the teams in Shopee. There are other features like Shopee Guarantee, which holds payments made by buyers until the ordered products have been deemed received by the buyer. This will certainly help reduce settlement risk as buyers can then be assured that their payment will only go through if they receive the items that they have bought. Lastly, if all else fails, Shopee has a decent dispute resolution team that helps to ensure that buyers or sellers can have a proper way to resolve disputes and seek compensation if necessary.The fourth value proposition is a subtle one, but Shopee is centered around mobile devices, and enabled e-commerce shopping to be done on the go. This is pertinent as customers were increasingly moving from the PC to their mobile devices as customers started using their mobile devices for more and more applications.Last but not least, the final value proposition that makes customers like Shopee is the strong payment and logistics infrastructure that enables seamless payment and quick and reliable deliveries. For Shopee payments, as highlighted above, they are protected by Shopee Guarantee, which will ensure that buyers get their items before the payment goes through to sellers. In terms of payment types, there are a wide variety of payment options, including credit cards, bank transfers or mobile wallet services. Most of the transactions on Shopee have been integrated with the Shopee Pay, which is SeaMoney's payment infrastructure, and this is the case for most of its core markets. For Shopee, developing the key logistics infrastructure was key to developing e-commerce in Southeast Asia and Taiwan as these are markets with difficult to access terrain and underdeveloped infrastructure. Shopee works with the largest and most reliable logistics service providers in its respective markets and are usually able to get lower rates and better terms with these logistics service providers as a result of Shopee's large scale of transactions. The buyers and sellers are also able to track the delivery status of their purchased items, which provides added assurance for e-commerce transactions.Value proposition for sellersThe first value proposition for sellers has to be the strong support that Shopee provides sellers. An e-commerce platform is only as good as the variety and quality of its seller base. This is likely why Shopee provides strong support to sellers as it has a large team of staff with local knowledge that provides quick and localized assistance to sellers when necessary.The second value proposition is that Shopee provides sellers with a one-stop solution for selling needs, including an integrated payment system, logistics and fulfillment services. Although Shopee does not require its sellers to use its logistics service providers, most of its sellers choose to use them due to the good pricing and reliable service quality of these providers.Lastly and perhaps most importantly, Shopee has a large and fast-growing user base that sellers can sell to. This is undoubtedly one of the greatest incentives for sellers as they can then have a larger market to sell to and a larger addressable market.Scalability of the marketplace business modelShopee has been hugely successful in scaling up as a marketplace platform for reasons highlighted above. It provided buyers with a reliable, social and fun e-commerce experience while sellers are given strong support as Shopee provides one-stop solutions for sellers. That said, the marketplace business model was the key in ensuring that the business is highly scalable.Another reason for the rapid scaling of Shopee is the social and gamification elements that enabled Shopee to acquire and retain users better, and increase their time spent on the platform.As a result, in 2021, Shopee was the largest e-commerce platform in Southeast Asia and Taiwan, and it is also gaining traction in Brazil.Success in marketing and promotional activitiesShopee started to increase brand awareness through its campaigns each month, like the 11.11 Big Sale and 12.12 Birthday Sale. As a result of the promotional activities on these special days in the month, buyers are likely to flock to Shopee during these special promotional events to get larger discounts and save money on their e-commerce purchases. As a result, they associate these dates with Shopee and large discounts and savings.Success in these marketing and promotional campaigns have led to GMV and market share growth and helped increase the mind share of Shopee in the buyers in its core markets.Monetization opportunitiesAs Shopee continues to grow in scale, with the sticky nature of its users due to its social and gamification features, the company can look to monetize this large Shopee user base. While the company is focused on market share growth and GMV at the moment, as the platform continues to scale, I think that we will see Shopee offer sellers paid advertising services, charge transaction-based fees and charge for more value-added services. These are some ways in which Shopee can continue to monetize the large and engaged user base that it has on the platform.Expansion into new marketsShopee started its operations in Southeast Asia and Taiwan and later, Brazil. In 2021, Shopee looked to expand its success beyond these markets and move to other markets, which included markets in Europe, India, and other markets in Latin America. It was not meant to be for Shopee's international expansion strategy, as I have highlighted in my Sea Limited article, as the company started exiting markets which it deems non-core to preserve capital and Shopee dipped its toes into the India market, a large market with tough competitors inMarch 2021, and with the success of Free Fire in India, saw India as a potential market for its e-commerce business. However, given the ban of Free Fire as highlighted in part 1 of my deep dive series, the company eventually realized that there were high regulatory and government risks in entering the India market. As a result, in March of 2022, the company exited India and given the relatively early stage of the operations in India and the cautious expansion in the country, there was a relatively limited impact to current Shopee business. The impact came from the loss of a large and fast-growing addressable market as a result of exiting from India.Shopee aggressively expanded in Europe as it entered France, Spain and Poland in 2021. However, in March 2022 and June 2022, Shopee exited France and Spain respectively. As the company was in France and Spain for a relatively short period of time, during the preliminary pilot phase of operations in both countries, Shopee decided to be prudent and disciplined in expanding into new markets and only invest resources into a market which it thinks that it can compete meaningfully in the long-term.While Shopee saw strong traction in Brazil based on data fromdata.ai, suggesting that the company is ranked first by average monthly active users in the Shopping category in Brazil, the company tried to replicate its e-commerce strategy in other Latin America markets, which resulted in expanding into Mexico, Chile and Colombia in 2021. In 2022, as a result of increasing global macro uncertainty, Shopee needed to focus its operations on core markets and decided that they will use a cross border model in Mexico, Colombia and Chile, downsizing its operations there to cross border operations.Shopee rationalization efforts (Author generated)In my view, the decision to exit markets in which it has not yet had a deep and strong presence in before the turn of the tides is a good move by management as that enabled the preservation of capital in early 2022 and prevented the company from needing more money to fund expansion into new markets. In particular, the exit from India was a great one in my view as the e-commerce market in India is saturated and highly competitive, with players like Amazon (AMZN), Meesho and Flipkart competing with Shopee. The cash burn needed to make Shopee a success in India would not have been possible given the reduction of liquidity in the later part of 2022 as the capital markets started to feel the jitters of higher interest rates and the potential of a recession. I think that the ability to exit markets to ensure the long-term sustainability of the business and expand into new markets prudently gives me more confidence in the management of Shopee.Shopee operational metricsShopee saw huge growth in 2021 as the pandemic helped to fuel the growth and adoption of e-commerce in Shopee's key markets. With movement restrictions and lockdowns, consumers needed to get goods and shop online. The strong growth fueled by the pandemic is likely to cause a high base effect in 2022 as consumers go back to work and school and are able to buy from brick-and-mortar stores. That said, the trend that the pandemic accelerated will likely stay in the future and the pandemic brought a net positive effect to increase the penetration of e-commerce in Shopee's key markets. As a result, in 2023, we are likely to lap that high base effect and I am of the opinion that Shopee can reaccelerate its growth in core markets and continue to increase penetration in these markets.Shopee operational metrics (Author generated)Shopee competitive landscapeWhile Shopee is a leader in the Southeast Asia and Taiwan markets, there are other players vying for market share in these regions. In particular, Alibaba's (BABA) Lazada has been operating in the region since 2012. Despite its longer operating history and backing from Alibaba, the company continued to trail behind Shopee. In my opinion, this is because of the social and gaming element that Shopee has brought into its platform that brought higher user engagement and thus, it attracts and retains users on the platform better. Also, the marketing and promotional campaigns launched by Shopee seem to have created better mind share in its core markets of Southeast Asia and Taiwan at least, resulting in better performance in sales events and marketing and promotional campaigns. Lastly, the platform that is better able to provide buyers with the best discounts and savings, as well as a better user experience will ultimately have the larger active user base. As a result of efforts by Shopee to protect buyers and large discounts on the platform, Shopee has been able to obtain better mind share from customers and result in better market share in the region. This results in a fly wheel effect as the larger buyer user base attracts more sellers on the Shopee platform, which brings about better deals and more variety on the Shopee platform compared to Lazada.In Lazada's fiscal year of 2021 ending on March 31st, the company reported revenues of $556,000, down more than65%from 2020 when it recorded $1.6 million in revenue. In 1Q21 alone, Shopee recorded revenues of$922 million.Lazada recorded $21 billion in GMV in 2021 while Shopee recorded $63 billion GMV in 2021, implying that as of the full year of 2021, Shopee's e-commerce business seems to be almost three times larger than that of Lazada.This goes to show the strong market share gain that Shopee has been experiencing, at the expense of Lazada, and how Shopee is able to compete and gain share in the competitive landscape.Tokopedia is another company that competes in the e-commerce space, but with a larger focus on Indonesia. Tokopedia merged with Gojek, which resulted in the combined entity being calledGoTo Group. With the large population and fast growth profile of the Indonesia market, the threat of GoTo Group in Indonesia remains relevant. In 2021, GoTo Group recorded 6,264 billion Indonesian Rupiah in revenues, which translates to approximately $401 million in revenues for the year. This compares to the$5.2 billion in revenues that Shopee generated in 2021. As a result, Shopee is almost 13 times larger than GoTo Group's e-commerce operations. The larger scale does bring benefits like economies of scale, better unit economics and attracting more buyers and sellers to the platform. At the end of the day, Shopee needs to continue to ensure that it remains relevant and attractive in Indonesia by continuing to improve user experience and bring innovation that adds value to both buyers and sellers.In its existing markets, as can be seen below, Shopee has a scale advantage as it is significantly larger than that of Lazada's or GoTo's revenues. This implies that Shopee's market share by revenue is at least nine times more than Lazada and Shopee's market share by revenue is almost 13 times more than GoTo Group. The competitive landscape in Shopee's core markets does seem favorable given the large-scale benefits that Shopee can enjoy with its market share in these markets. In addition, Shopee continues to be able to compete meaningfully and gain share in these markets as it looks to break even in the Southeast Asia and Taiwan markets.Major e-commerce companies revenues relative to Shopee (Author generated)The global e-commerce market is becoming very competitive, in my view. The largest e-commerce player, Amazon, continues to look to expand internationally and remains a well-capitalized player with strong branding. Other players in specific markets like MercadoLibre (MELI) in Latin America and Coupang (CPNG) in South Korea are well established players in their own respective markets. As a result, international expansion for Shopee needs to be done prudently in markets in which it can compete and adds strong value to. While I think that Shopee may expand to international markets in the long-term, the near-term goal is still turning profitable, focusing on core markets and ensuring sustainability of the business.ValuationAs highlighted before, Sea Limited is now trading at 45x FY2024 EBITDA. Considering the significant EBITDA expansion to come as a result of a leaner cost structure as a result of its cost optimization initiatives and improving economies of scale as the business grows, I think that we will likely see a very strong period of EBITDA growth in the near-term.To value Sea Limited, I use a sum of the parts model. I assume Garena to be valued at 11x FY2024 P/E, Shopee to be valued at 3x FY 2024 P/S and SeaMoney to be valued at 4x FY2024 P/S.My 1-year target price for Sea Limited is thus $94.51. This implies 41% upside from current levels.ConclusionAs can be seen in the article, Shopee is a leader in e-commerce, a fundamentally growing business and one whose profitability and margin profile is improving as we speak.While I think that there could have been some disappointments with the company pulling out of its non-core markets in which it was doing pilot trials in, I think that we are starting to lap the high base effect we saw in 2022 in the coming year in 2023. In addition, the boost in Shopee being EBITDA positive in Southeast Asia and Taiwan is certainly a boost in confidence for the company's business model. By 2025, management expects that both Shopee and SeaMoney together, will be able to generate sufficient cash to self-fund their own long-term growth.My one-year price target for Sea Limited is thus $94.51. This implies a 41% upside from current levels.","news_type":1},"isVote":1,"tweetType":1,"viewCount":232,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9961196111,"gmtCreate":1668869655633,"gmtModify":1676538123143,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Super","listText":"Super","text":"Super","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9961196111","repostId":"1143890380","repostType":2,"repost":{"id":"1143890380","pubTimestamp":1668822759,"share":"https://ttm.financial/m/news/1143890380?lang=&edition=fundamental","pubTime":"2022-11-19 09:52","market":"us","language":"en","title":"Sea Limited: Profitability May Be Around The Corner","url":"https://stock-news.laohu8.com/highlight/detail?id=1143890380","media":"Seeking Alpha","summary":"SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New ga","content":"<html><head></head><body><h3>Summary</h3><ul><li>Further uncertainty for Sea Limited&#39;s Garena as its QAU did not stabilize as expected. New games were launched in recent months.</li><li>Shopee’s race to profitability has accelerated as shown in the material improvements in unit economics, and they are expected to be profitable by FY23.</li><li>SeaBank&#39;s credit business is growing strongly and its overall credit business is profitable and cash flow positive. Its revenue now makes up 10.4% of its overall revenue.</li><li>Execution has been on point in attaining profitability although that resulted in declining growth in FY22. Management believes growth can reaccelerate once it achieves profitability.</li><li>Sea Limited has sufficient cash reserves to pay off the convertible notes.</li></ul><h3>Investment Thesis</h3><p><a href=\"https://laohu8.com/S/SE\">Sea Limited</a> has come under much scrutiny in the past 2 years as the shift in focus from growth to profitability and macro headwinds have led to a massive growth decline across itsShopee and Garena units. While this is unfortunate, management has executed brilliantly so far to turn the company into an increasingly self-sufficient business in the near term.</p><p>In this article, I attempt to dive deeper into itsQ3 2022 resultand provide an overall analysis of the earnings. Although I’d like to highlight that the management has explicitly stated that growth can reaccelerate after attaining profitability and that they have a sufficient cash reserve to pay off the convertible notes sitting on the balance sheet.</p><h3>Garena<img src=\"https://static.tigerbbs.com/ab8fe0ed7909a98b7fdf0b930bc362df\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></h3><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/8386bb1c95c3d5300e1fe0f371528199\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>Garena’s QAU and QPU continued to decline sequentially, as the management’s anticipation of its user base stabilizing did not materialize. The macro headwinds continue to be a headache, and it seems that there is more uncertainty lying ahead for Garena Free Fire. The key forward is to focus on launching new games, with games such asPrimitive EraandBlack Clover Mobilelaunching recently. While this indicates that management is working hard to reaccelerate Garena’s growth, it is important to recognize that the success of games is not guaranteed, and this is the bigger uncertainty for the business. As a result, this caused its adjusted EBITDA margin to further decline to 32.5% during the quarter.</p><p>Additionally, management states that the expiry of the agreement with Riot Games will have no impact on Garena’s publishing business, and Garena is seeking other top-game developers for their publishing business.</p><p>Shopee<img src=\"https://static.tigerbbs.com/79b7f33be279fa015f52addd35b55d96\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q<img src=\"https://static.tigerbbs.com/6aaff49a0ba8c901eadda2b7cf01a391\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q</p><p>Shopee’s GMV grew 14% Y/Y and the number of orders grew 18% Y/Y, a continuous decline in the past couple of quarters. This is a result of management pulling back on its sales and marketing (“S&amp;M”) expenses, exiting multiple markets, cutting costs aggressively (such as hiring), and lastly, the lower consumer discretionary spending. This is in contrast to Lazada (NYSE: BABA), as the number oforders declined Y/Yand they are also prioritizing profitability through increased monetization.</p><p>While this does show that consumers continue to spend on Shopee in SEA, its GMV and number of orders are partially contributed by Shopee Brazil. In a tough macro environment, Shopee experienced a 36% Y/Y growth in the number of brands on the platform, indicating that Shopee is an increasingly important partner in growing its online revenue.<img src=\"https://static.tigerbbs.com/7e09e1e030c482f41afaf8695896f9ec\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/>SE 10-Q</p><p>The more important portion is Shopee’s improvement in profitability. Its overall adjusted EBITDA loss per order continues to improve by 23.5% sequentially, and more specifically, Shopee Brazil’s loss per order improved by 27.5% sequentially during the quarter as compared to 6.6% in the last quarter. Moreover, Shopee is expected to attain profitability by FY23 instead of FY25 as previously guided by the management. This goes to show that the management has made great strides in pursuing profitability, which is impressive in my view. Once it attained self-sufficiency, growth can reaccelerate, although, the management is expecting flat or negative growth in certain metrics in the near term.</p><h3>SeaBank</h3><p><i>Note that I will be using “SeaBank” and “SeaMoney” interchangeably.</i></p><p><img src=\"https://static.tigerbbs.com/0f0cb77d6ac22f50a1208eaf075db51c\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>SeaMoney’s loan receivables grew 46% from 4Q21 and 110% from 3Q21 to $2.2 billion. These are loans provided to customers whereby SeaMoney generates revenue by charging interest rates, and it has been growing quickly. In myprevious article, I showed that in Sep 2022, SeaBank Indonesia grew its loans and customer deposits by 111% Y/Y and 147% Y/Y, respectively, and the launch of ShopeePay in Brazil. During the earnings call, management stated that the credit business is profitable and cash flow positive, and it will be focusing on growing this business in Southeast Asia (“SEA”) and Brazil.</p><p>Additionally, they have also said to diversify their source of funding for the credit business, which I believe is to seek third-party financing partners to reduce the capital required for the business and at the same time, reduce credit risk. Similar to Bank Jago (IDX: ARTO), SeaBank may utilize the data of its partners to help improve the non-performing loans and scale its lending. Readers who are unaware of SeaBank’s business model can head to mydeep diveinto the company.</p><p><img src=\"https://static.tigerbbs.com/2de194897c03f180f99a0dd2b75bf2d0\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/5932cc09aca0134084217800afb30399\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p><img src=\"https://static.tigerbbs.com/6205c82c79c753720862ed8385dd0e2a\" tg-width=\"1200\" tg-height=\"742\" referrerpolicy=\"no-referrer\"/></p><p>SE 10-Q</p><p>As a result of its growing deposits and loan books, its Q3 2022 revenue grew 147% Y/Y, and it has been increasingly making up a bigger portion of its overall revenue at 10.4% this quarter. Management had also been deliberate in cutting down on S&amp;M expenses and combined with its acceleration revenue growth, its adjusted EBITDA margin has improved massively to -20.7% during the quarter. This is compared to -40% in 2Q22 and -120.3% a year ago.</p><h3>Sufficient Cash Reserves To Pay off Convertible Notes<img src=\"https://static.tigerbbs.com/4ff585449530fce4084e7d1447e077b4\" tg-width=\"1280\" tg-height=\"798\" referrerpolicy=\"no-referrer\"/></h3><p>SE 10-Q</p><p>One of the biggest concerns about Sea Limited for investors is the cash burn rate, as they fear that the company does not have enough sufficient cash reserves to pay off convertible notes maturing in 2026. However, not only did the cash outflow slow in Q3 2022, but the management has also hinted that there are sufficient cash reserves to pay off the convertible notes:</p><blockquote>“We aim to continue to maintain a net cash position, after budgeting for the full retirement in cash of outstanding convertible bonds and assuming no external funding.”</blockquote><h3>Conclusion</h3><p>Overall, this was a pretty decent quarter for Sea Limited, as we could see that they had made huge improvements on the road to profitability, particularly for Shopee. While that comes at a growth trade-off, management has indicated that Shopee can reaccelerate its growth after attaining profitability in FY23, which is pulled forward from FY25 as guided previously.</p><p>Garena&#39;s results continue to be a concern as macro seems to have a longer-than-expected impact on its user base and its profitability as a result has been trending downwards over the past couple of quarters. Management has been working hard on its gaming pipelines, although the uncertainty lies in the successes of these new games and whether they could reaccelerate their growth in the future.</p><p>SeaBank has been growing its top line really quickly and huge improvements were made on the bottom line as well. Furthermore, the overall credit business is profitable and is generating positive cash flow, and has been increasingly making up a larger proportion of its total revenue. I continue to believe that this can be a potential growth driver for Sea Limited.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Profitability May Be Around The Corner</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Profitability May Be Around The Corner\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-11-19 09:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New games were launched in recent months.Shopee’s race to profitability has accelerated as shown in the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4559176-sea-limited-profitability-may-be-around-the-corner","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1143890380","content_text":"SummaryFurther uncertainty for Sea Limited's Garena as its QAU did not stabilize as expected. New games were launched in recent months.Shopee’s race to profitability has accelerated as shown in the material improvements in unit economics, and they are expected to be profitable by FY23.SeaBank's credit business is growing strongly and its overall credit business is profitable and cash flow positive. Its revenue now makes up 10.4% of its overall revenue.Execution has been on point in attaining profitability although that resulted in declining growth in FY22. Management believes growth can reaccelerate once it achieves profitability.Sea Limited has sufficient cash reserves to pay off the convertible notes.Investment ThesisSea Limited has come under much scrutiny in the past 2 years as the shift in focus from growth to profitability and macro headwinds have led to a massive growth decline across itsShopee and Garena units. While this is unfortunate, management has executed brilliantly so far to turn the company into an increasingly self-sufficient business in the near term.In this article, I attempt to dive deeper into itsQ3 2022 resultand provide an overall analysis of the earnings. Although I’d like to highlight that the management has explicitly stated that growth can reaccelerate after attaining profitability and that they have a sufficient cash reserve to pay off the convertible notes sitting on the balance sheet.GarenaSE 10-QSE 10-QGarena’s QAU and QPU continued to decline sequentially, as the management’s anticipation of its user base stabilizing did not materialize. The macro headwinds continue to be a headache, and it seems that there is more uncertainty lying ahead for Garena Free Fire. The key forward is to focus on launching new games, with games such asPrimitive EraandBlack Clover Mobilelaunching recently. While this indicates that management is working hard to reaccelerate Garena’s growth, it is important to recognize that the success of games is not guaranteed, and this is the bigger uncertainty for the business. As a result, this caused its adjusted EBITDA margin to further decline to 32.5% during the quarter.Additionally, management states that the expiry of the agreement with Riot Games will have no impact on Garena’s publishing business, and Garena is seeking other top-game developers for their publishing business.ShopeeSE 10-QSE 10-QShopee’s GMV grew 14% Y/Y and the number of orders grew 18% Y/Y, a continuous decline in the past couple of quarters. This is a result of management pulling back on its sales and marketing (“S&M”) expenses, exiting multiple markets, cutting costs aggressively (such as hiring), and lastly, the lower consumer discretionary spending. This is in contrast to Lazada (NYSE: BABA), as the number oforders declined Y/Yand they are also prioritizing profitability through increased monetization.While this does show that consumers continue to spend on Shopee in SEA, its GMV and number of orders are partially contributed by Shopee Brazil. In a tough macro environment, Shopee experienced a 36% Y/Y growth in the number of brands on the platform, indicating that Shopee is an increasingly important partner in growing its online revenue.SE 10-QThe more important portion is Shopee’s improvement in profitability. Its overall adjusted EBITDA loss per order continues to improve by 23.5% sequentially, and more specifically, Shopee Brazil’s loss per order improved by 27.5% sequentially during the quarter as compared to 6.6% in the last quarter. Moreover, Shopee is expected to attain profitability by FY23 instead of FY25 as previously guided by the management. This goes to show that the management has made great strides in pursuing profitability, which is impressive in my view. Once it attained self-sufficiency, growth can reaccelerate, although, the management is expecting flat or negative growth in certain metrics in the near term.SeaBankNote that I will be using “SeaBank” and “SeaMoney” interchangeably.SE 10-QSeaMoney’s loan receivables grew 46% from 4Q21 and 110% from 3Q21 to $2.2 billion. These are loans provided to customers whereby SeaMoney generates revenue by charging interest rates, and it has been growing quickly. In myprevious article, I showed that in Sep 2022, SeaBank Indonesia grew its loans and customer deposits by 111% Y/Y and 147% Y/Y, respectively, and the launch of ShopeePay in Brazil. During the earnings call, management stated that the credit business is profitable and cash flow positive, and it will be focusing on growing this business in Southeast Asia (“SEA”) and Brazil.Additionally, they have also said to diversify their source of funding for the credit business, which I believe is to seek third-party financing partners to reduce the capital required for the business and at the same time, reduce credit risk. Similar to Bank Jago (IDX: ARTO), SeaBank may utilize the data of its partners to help improve the non-performing loans and scale its lending. Readers who are unaware of SeaBank’s business model can head to mydeep diveinto the company.SE 10-QSE 10-QSE 10-QAs a result of its growing deposits and loan books, its Q3 2022 revenue grew 147% Y/Y, and it has been increasingly making up a bigger portion of its overall revenue at 10.4% this quarter. Management had also been deliberate in cutting down on S&M expenses and combined with its acceleration revenue growth, its adjusted EBITDA margin has improved massively to -20.7% during the quarter. This is compared to -40% in 2Q22 and -120.3% a year ago.Sufficient Cash Reserves To Pay off Convertible NotesSE 10-QOne of the biggest concerns about Sea Limited for investors is the cash burn rate, as they fear that the company does not have enough sufficient cash reserves to pay off convertible notes maturing in 2026. However, not only did the cash outflow slow in Q3 2022, but the management has also hinted that there are sufficient cash reserves to pay off the convertible notes:“We aim to continue to maintain a net cash position, after budgeting for the full retirement in cash of outstanding convertible bonds and assuming no external funding.”ConclusionOverall, this was a pretty decent quarter for Sea Limited, as we could see that they had made huge improvements on the road to profitability, particularly for Shopee. While that comes at a growth trade-off, management has indicated that Shopee can reaccelerate its growth after attaining profitability in FY23, which is pulled forward from FY25 as guided previously.Garena's results continue to be a concern as macro seems to have a longer-than-expected impact on its user base and its profitability as a result has been trending downwards over the past couple of quarters. Management has been working hard on its gaming pipelines, although the uncertainty lies in the successes of these new games and whether they could reaccelerate their growth in the future.SeaBank has been growing its top line really quickly and huge improvements were made on the bottom line as well. Furthermore, the overall credit business is profitable and is generating positive cash flow, and has been increasingly making up a larger proportion of its total revenue. I continue to believe that this can be a potential growth driver for Sea Limited.","news_type":1},"isVote":1,"tweetType":1,"viewCount":192,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9963325105,"gmtCreate":1668601500107,"gmtModify":1676538082864,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/SE\">$Sea Ltd(SE)$&nbsp;</a>","listText":"<a href=\"https://ttm.financial/S/SE\">$Sea Ltd(SE)$&nbsp;</a>","text":"$Sea Ltd(SE)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9963325105","isVote":1,"tweetType":1,"viewCount":408,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9931332600,"gmtCreate":1662410525600,"gmtModify":1676537051895,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9931332600","repostId":"2265703480","repostType":4,"repost":{"id":"2265703480","pubTimestamp":1662390641,"share":"https://ttm.financial/m/news/2265703480?lang=&edition=fundamental","pubTime":"2022-09-05 23:10","market":"us","language":"en","title":"6 Reasons to Buy Apple Stock Now and Never Sell","url":"https://stock-news.laohu8.com/highlight/detail?id=2265703480","media":"Motley Fool","summary":"There's a reason the iPhone maker is the market-cap king.","content":"<html><head></head><body><p>Even as the bear market lingers, investors might be surprised to learn that <b>Apple</b> <i>still</i> holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 trillion. Perhaps even more impressive is the fact that even in the midst of the ongoing meltdown in technology stocks, the iPhone maker has outperformed the broader indexes and many of its peers.</p><p>From their peaks several months ago, the <b>S&amp;P 500</b> and the <b>Nasdaq Composite</b> indexes have declined 17% and 26%, respectively, while Apple stock has shed just 13%.</p><p>That performance notwithstanding, there are plenty of reasons for investors to buy Apple stock and hold forever.</p><h2>1. It&#39;s Warren Buffett&#39;s largest holding</h2><p>Given his extraordinary track record, investors could do far worse than following in the footsteps of legendary money manager Warren Buffett. Since taking the helm of <b>Berkshire Hathaway</b> in 1965, the &#34;Oracle of Omaha&#34; has delivered mind-boggling returns, generating a compound annual growth rate of more than 20%. In fact, by the end of 2021, the company&#39;s overall returns clocked in at a staggering 3,641,613%.</p><p>Lest there be any doubt, Apple is far and away Berkshire&#39;s largest holding. Buffett ended the second quarter with nearly 895 million shares of Apple stock, worth roughly $122 billion as of June, 30, accounting for about 41% of Berkshire&#39;s portfolio. That&#39;s quite a vote of confidence from one of the world&#39;s most successful investors.</p><h2>2. One billion iPhones strong -- and growing</h2><p>There&#39;s no question that the release of the iconic iPhone in 2007 ushered in the modern smartphone and forever changed the way we communicate. The device&#39;s sleek design and integrated computing power took the world by storm. Now, as we await the release of the upcoming iPhone 14, Apple dominates the market, with more than 1 billion active iPhones in the wild.</p><p>Rumors are swirling that the next-generation device -- which is due to be unveiled next week -- could sport some major upgrades and four new models. Wedbush analyst Dan Ives estimates that roughly 24% of iPhone owners worldwide haven&#39;t upgraded their device over the past 3.5 years. Even in the midst of the prevailing macroeconomic headwinds, this could mark the beginning of the next big product cycle for the iPhone.</p><h2>3. Apple is the new black</h2><p>While the iPhone gets all the press, Apple&#39;s wearables, home products, and accessories segment -- which includes such products as Apple Watch, AirPods, AirTags, and Beats headphones -- continue to steadily attract converts. Earlier this year, noted tech analyst Horace Dediu announced that &#34;Apple Wearables is now [the size of] a Fortune 100 business.&#34; In fact, the segment has generated more revenue so far in fiscal 2022 than either the Mac <i>or</i> the iPad.</p><p>Supply constraints and foreign exchange headwinds have weighed on the segment, which grew just 6% year over year through the first three quarters of fiscal 2022. That said, the resulting pent-up demand will eventually give way to a surge in sales. Furthermore, the company is expected to release the latest versions of its Apple Watch next week. These could include a Pro model, which could serve to supercharge sales of the popular device.</p><h2>4. Services: Apple&#39;s second-biggest breadwinner</h2><p>Long before anyone else, CEO Tim Cook saw the potential for Apple&#39;s services segment, announcing plans in early 2017 to double its revenue over the coming four years. Fast forward to mid-2022, and services has come into its own.</p><p>The segment, which includes Apple Music, the App Store, Apple Pay, and Apple TV+ (among others), just set a June quarter record,  generating 19% of Apple&#39;s total revenue. Services also saw revenue records in each major category, including all-time records for Music, Cloud Services, Apple Care, and Payment Services.</p><p>Apple TV+ began as something of an industry joke, with just eight programs and a documentary. But nobody&#39;s laughing now. Apple has netted more than 250 awards and over 1,100 nominations for its programming, including 52 Emmy Award nominations in 2022.</p><h2>5. Dividends: The gift that keeps on giving</h2><p>Apple began paying a dividend again in 2012 and has amassed quite an impressive track record. The quarterly payout began at a split-adjusted $0.095 and has soared 143% in just ten years.</p><p>This includes Apple&#39;s announcement earlier this year, which boosted the quarterly payout to $0.23 per share, an increase of 5% for 2022. That likely won&#39;t be the last increase as Apple is using less than 15% of its profits to fund the payout, giving the company plenty of opportunity for future increases.</p><h2>6. Fewer shares = a bigger slice of the Apple pie</h2><p>Another highlight of Apple&#39;s shareholder-friendly policies is the company&#39;s strong share-repurchase plan. Apple began buying back shares in earnest in early 2013 and has never taken its foot off the gas. As a result, with each passing quarter, Apple shareholders own a larger share of the company. In fact, over the past 10 years, Apple&#39;s share count has declined by nearly 39%.</p><p><img src=\"https://static.tigerbbs.com/efa1386fae6e413934cdecf682a72a71\" tg-width=\"720\" tg-height=\"387\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Data by YCharts.</p><p>As an example, the company retired roughly 1% of its shares in its fiscal third quarter and has no plans of slowing down. Earlier this year, Apple announced that it added another $90 billion to its existing share-repurchase program.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>6 Reasons to Buy Apple Stock Now and Never Sell</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n6 Reasons to Buy Apple Stock Now and Never Sell\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-09-05 23:10 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Even as the bear market lingers, investors might be surprised to learn that Apple still holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://www.fool.com/investing/2022/09/05/6-reasons-to-buy-apple-stock-now-and-never-sell/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2265703480","content_text":"Even as the bear market lingers, investors might be surprised to learn that Apple still holds the title of most valuable publicly traded company, with its market cap recently clocking in at $2.55 trillion. Perhaps even more impressive is the fact that even in the midst of the ongoing meltdown in technology stocks, the iPhone maker has outperformed the broader indexes and many of its peers.From their peaks several months ago, the S&P 500 and the Nasdaq Composite indexes have declined 17% and 26%, respectively, while Apple stock has shed just 13%.That performance notwithstanding, there are plenty of reasons for investors to buy Apple stock and hold forever.1. It's Warren Buffett's largest holdingGiven his extraordinary track record, investors could do far worse than following in the footsteps of legendary money manager Warren Buffett. Since taking the helm of Berkshire Hathaway in 1965, the \"Oracle of Omaha\" has delivered mind-boggling returns, generating a compound annual growth rate of more than 20%. In fact, by the end of 2021, the company's overall returns clocked in at a staggering 3,641,613%.Lest there be any doubt, Apple is far and away Berkshire's largest holding. Buffett ended the second quarter with nearly 895 million shares of Apple stock, worth roughly $122 billion as of June, 30, accounting for about 41% of Berkshire's portfolio. That's quite a vote of confidence from one of the world's most successful investors.2. One billion iPhones strong -- and growingThere's no question that the release of the iconic iPhone in 2007 ushered in the modern smartphone and forever changed the way we communicate. The device's sleek design and integrated computing power took the world by storm. Now, as we await the release of the upcoming iPhone 14, Apple dominates the market, with more than 1 billion active iPhones in the wild.Rumors are swirling that the next-generation device -- which is due to be unveiled next week -- could sport some major upgrades and four new models. Wedbush analyst Dan Ives estimates that roughly 24% of iPhone owners worldwide haven't upgraded their device over the past 3.5 years. Even in the midst of the prevailing macroeconomic headwinds, this could mark the beginning of the next big product cycle for the iPhone.3. Apple is the new blackWhile the iPhone gets all the press, Apple's wearables, home products, and accessories segment -- which includes such products as Apple Watch, AirPods, AirTags, and Beats headphones -- continue to steadily attract converts. Earlier this year, noted tech analyst Horace Dediu announced that \"Apple Wearables is now [the size of] a Fortune 100 business.\" In fact, the segment has generated more revenue so far in fiscal 2022 than either the Mac or the iPad.Supply constraints and foreign exchange headwinds have weighed on the segment, which grew just 6% year over year through the first three quarters of fiscal 2022. That said, the resulting pent-up demand will eventually give way to a surge in sales. Furthermore, the company is expected to release the latest versions of its Apple Watch next week. These could include a Pro model, which could serve to supercharge sales of the popular device.4. Services: Apple's second-biggest breadwinnerLong before anyone else, CEO Tim Cook saw the potential for Apple's services segment, announcing plans in early 2017 to double its revenue over the coming four years. Fast forward to mid-2022, and services has come into its own.The segment, which includes Apple Music, the App Store, Apple Pay, and Apple TV+ (among others), just set a June quarter record,  generating 19% of Apple's total revenue. Services also saw revenue records in each major category, including all-time records for Music, Cloud Services, Apple Care, and Payment Services.Apple TV+ began as something of an industry joke, with just eight programs and a documentary. But nobody's laughing now. Apple has netted more than 250 awards and over 1,100 nominations for its programming, including 52 Emmy Award nominations in 2022.5. Dividends: The gift that keeps on givingApple began paying a dividend again in 2012 and has amassed quite an impressive track record. The quarterly payout began at a split-adjusted $0.095 and has soared 143% in just ten years.This includes Apple's announcement earlier this year, which boosted the quarterly payout to $0.23 per share, an increase of 5% for 2022. That likely won't be the last increase as Apple is using less than 15% of its profits to fund the payout, giving the company plenty of opportunity for future increases.6. Fewer shares = a bigger slice of the Apple pieAnother highlight of Apple's shareholder-friendly policies is the company's strong share-repurchase plan. Apple began buying back shares in earnest in early 2013 and has never taken its foot off the gas. As a result, with each passing quarter, Apple shareholders own a larger share of the company. In fact, over the past 10 years, Apple's share count has declined by nearly 39%.Data by YCharts.As an example, the company retired roughly 1% of its shares in its fiscal third quarter and has no plans of slowing down. Earlier this year, Apple announced that it added another $90 billion to its existing share-repurchase program.","news_type":1},"isVote":1,"tweetType":1,"viewCount":122,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9996085395,"gmtCreate":1661080835319,"gmtModify":1676536449990,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9996085395","repostId":"2260785313","repostType":4,"repost":{"id":"2260785313","pubTimestamp":1661045446,"share":"https://ttm.financial/m/news/2260785313?lang=&edition=fundamental","pubTime":"2022-08-21 09:30","market":"us","language":"en","title":"No, There Is No New Short-Selling Champion in Tesla Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2260785313","media":"Barrons","summary":"There was a stir in the Tesla investing community when a regulator filing indicated that asset manag","content":"<html><head></head><body><p>There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just a tempest in a teapot. There is no new short-selling champion for Tesla bears to hoist onto their shoulders.</p><p>A put option is, generally speaking, a bearish bet. It gives the holder the right to sell a stock at a fixed price in the future. Holders of put options do better the lower a stock price falls.</p><p>A quarterly regulatory filing indicated that Deer Park had amassed put-option contracts representing more than 4.8 million shares of Tesla (ticker: TSLA) stock. That much Tesla stock is worth roughly $4.3 billion at current prices. On the surface that looks like a massive bet.</p><p>But that isn&#39;t really the way options work. The price paid for an options contract depends on many factors including the strike price and time to contract expiration.</p><p>Consider Tesla put options that expire Friday Aug. 19, and give the holder the right to sell Tesla stock at about $800 a share are essentially trading for about one cent. Theoretically, amassing options contracts that reflect 4.8 million shares of Tesla could cost someone $48,000. That&#39;s a long way from $4.3 billion.</p><p>It wouldn&#39;t be a good idea, though. There isn&#39;t high probability that Tesla stock will drop about $100 in the final hour of trading Friday.</p><p>(There isn&#39;t much trading volume in those contracts. It&#39;s just an example.)</p><p>Deer Park Chief Investment Officer Scott Burg told Barron&#39;s the Tesla put-options position amounted to 0.1% of his portfolio. That isn&#39;t all that much, and indicates Deer Park probably paid the less than $1 per share represented the puts.</p><p>That isn&#39;t a lot for a stock worth about $900. That also means the put options were either expiring soon, or deeply out of the money, or both. Burg didn&#39;t get into contract specifics, but said the position was closed profitably. The tiny position is already gone.</p><p>Profits aren&#39;t hard to fathom. Tesla stock did fall, along with other technology shares, in the second quarter. Tesla stock dropped almost 38% from the end of March to the end of June while the Nasdaq Composite fell 22% over the same span.</p><p>Burg doesn&#39;t consider himself a big Tesla bear. He&#39;s says he is bearish on the overall economy and the consumer. He expects Tesla stock to struggle, but just like any other consumer discretionary stock this coming year.</p><p>The whole episode does illustrate an important lesson about options trading. There are many ways to use options in a portfolio.</p><p>Investors can buy options contracts far from current prices. They are cheap and only pay off if extreme events happen. They can also be used to bet on volatility. Options get more valuable as stock volatility rises and less valuable when volatility falls. Options can be used to hedge a portfolio, too.</p><p>What&#39;s more, bearish options bets can actually generate income for bullish investors. Take Tesla. It doesn&#39;t pay a dividend. If that irks some shareholders they can sell call options contracts. (Selling a call is similar to a put option. Both work out if the stock falls. It&#39;s a bearish bet.)</p><p>A Tesla holder selling a $900 call option that expires in September gets about $44. That&#39;s almost 5% the value of the Tesla stock. The risk with selling call options against stock held is that the stock could go up. If Tesla hit $1,000, that holder would have essentially sold some of his position for $900, missing out on the additional gain.</p><p>There are many other things pros do with options. People have careers trading options for brokerage firms and asset managers.</p><p>However, options don&#39;t indicate with certainty how someone feels about the stock that underlies the options contract.</p></body></html>","source":"lsy1601382232898","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>No, There Is No New Short-Selling Champion in Tesla Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNo, There Is No New Short-Selling Champion in Tesla Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-21 09:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA><strong>Barrons</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just ...</p>\n\n<a href=\"https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://www.barrons.com/articles/tesla-stock-short-selling-51660942310?mod=RTA","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2260785313","content_text":"There was a stir in the Tesla investing community when a regulator filing indicated that asset manager Deer Park Road made a seemingly huge bet against Tesla stock using put options. The stir is just a tempest in a teapot. There is no new short-selling champion for Tesla bears to hoist onto their shoulders.A put option is, generally speaking, a bearish bet. It gives the holder the right to sell a stock at a fixed price in the future. Holders of put options do better the lower a stock price falls.A quarterly regulatory filing indicated that Deer Park had amassed put-option contracts representing more than 4.8 million shares of Tesla (ticker: TSLA) stock. That much Tesla stock is worth roughly $4.3 billion at current prices. On the surface that looks like a massive bet.But that isn't really the way options work. The price paid for an options contract depends on many factors including the strike price and time to contract expiration.Consider Tesla put options that expire Friday Aug. 19, and give the holder the right to sell Tesla stock at about $800 a share are essentially trading for about one cent. Theoretically, amassing options contracts that reflect 4.8 million shares of Tesla could cost someone $48,000. That's a long way from $4.3 billion.It wouldn't be a good idea, though. There isn't high probability that Tesla stock will drop about $100 in the final hour of trading Friday.(There isn't much trading volume in those contracts. It's just an example.)Deer Park Chief Investment Officer Scott Burg told Barron's the Tesla put-options position amounted to 0.1% of his portfolio. That isn't all that much, and indicates Deer Park probably paid the less than $1 per share represented the puts.That isn't a lot for a stock worth about $900. That also means the put options were either expiring soon, or deeply out of the money, or both. Burg didn't get into contract specifics, but said the position was closed profitably. The tiny position is already gone.Profits aren't hard to fathom. Tesla stock did fall, along with other technology shares, in the second quarter. Tesla stock dropped almost 38% from the end of March to the end of June while the Nasdaq Composite fell 22% over the same span.Burg doesn't consider himself a big Tesla bear. He's says he is bearish on the overall economy and the consumer. He expects Tesla stock to struggle, but just like any other consumer discretionary stock this coming year.The whole episode does illustrate an important lesson about options trading. There are many ways to use options in a portfolio.Investors can buy options contracts far from current prices. They are cheap and only pay off if extreme events happen. They can also be used to bet on volatility. Options get more valuable as stock volatility rises and less valuable when volatility falls. Options can be used to hedge a portfolio, too.What's more, bearish options bets can actually generate income for bullish investors. Take Tesla. It doesn't pay a dividend. If that irks some shareholders they can sell call options contracts. (Selling a call is similar to a put option. Both work out if the stock falls. It's a bearish bet.)A Tesla holder selling a $900 call option that expires in September gets about $44. That's almost 5% the value of the Tesla stock. The risk with selling call options against stock held is that the stock could go up. If Tesla hit $1,000, that holder would have essentially sold some of his position for $900, missing out on the additional gain.There are many other things pros do with options. People have careers trading options for brokerage firms and asset managers.However, options don't indicate with certainty how someone feels about the stock that underlies the options contract.","news_type":1},"isVote":1,"tweetType":1,"viewCount":144,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":256830444933192,"gmtCreate":1703736640748,"gmtModify":1703736645416,"author":{"id":"4121169336733782","authorId":"4121169336733782","name":"SaravananR","avatar":"https://community-static.tradeup.com/news/3b6ed52793616cb409f928f330d18f9c","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4121169336733782","authorIdStr":"4121169336733782"},"themes":[],"htmlText":"Good article to knew fact abt sea.&nbsp;","listText":"Good article to knew fact abt sea.&nbsp;","text":"Good article to knew fact abt sea.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/256830444933192","repostId":"2394756303","repostType":2,"repost":{"id":"2394756303","pubTimestamp":1703730676,"share":"https://ttm.financial/m/news/2394756303?lang=&edition=fundamental","pubTime":"2023-12-28 10:31","market":"us","language":"en","title":"Sea Limited: No Love","url":"https://stock-news.laohu8.com/highlight/detail?id=2394756303","media":"Seekingalpha","summary":"Saranya Yuenyong Introduction Sea Limited  is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:   Garena - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.   Shopee - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.  SeaMoney - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.  The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe. The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations. Investors loved it at $300. Shouldn't they love it even more at $40?","content":"<html><head></head><body><ul style=\"\"><li><p>Sea&#39;s growth story is far from over.</p></li><li><p>Profitability turned negative in Q3 - this was intentional.</p></li><li><p>Analyst estimates are too low.</p></li><li><p>Sea is trading at its cheapest valuation multiple ever.</p></li><li><p>Investors loved it at $300. Shouldn&#39;t they love it even more at $40?</p></li></ul><h2 id=\"id_1939370528\">Introduction</h2><p>Sea Limited (NYSE: SE) is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:</p><ul style=\"\"><li><p><strong>Garena</strong> - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.</p></li><li><p><strong>Shopee</strong> - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.</p></li><li><p><strong>SeaMoney</strong> - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.</p></li></ul><p>The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe.</p><p>The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations.</p><p>Investors loved it at $300. Shouldn&#39;t they love it even more at $40?</p><p>Well, that&#39;s not the case as the stock continues to struggle while the broader markets rally off to new highs.</p><p>That said, following its spectacular decline of about 90%, I make the investment case that it pays to be a contrarian today - I believe the risk to reward for Sea stock is heavily skewed to the upside.</p><h2 id=\"id_1808184048\">Growth</h2><p>Looking at its topline, Q3 Total Revenue was $3.3B, up by a mere 5% YoY. While this beat analyst estimates by $90M, or 3%, Sea&#39;s growth has gone through a significant slowdown over the last few quarters, from its glory days of triple-digit growth in 2020 and 2021, to just mid-single-digit growth as of recently.</p><p>Years of growth have been pulled forward due to the pandemic, which consequently led to the company facing very tough YoY comps in the last couple of years, thus the steep deceleration in growth.</p><p>Now you see why shares of Sea are down so much.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cfc929851b99b47a929aa65fc26b9699\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p></p><p>Let&#39;s take a look at the performance of each of Sea&#39;s business units.</p><p>Looking at the gaming division first, Q3 Digital Entertainment Revenue was $592M. While this is up 12% QoQ, it is down 34% YoY and still far from its highs of $1.4B in Q4 of 2021. Nevertheless, it is still encouraging to see some signs of recovery in the business.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b1288059e0de5b58109f034be1518db6\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>The drop in Revenue was due to the moderation in user engagement, lower monetization, as well as the Free Fire ban in India starting in early 2022.</p><ul style=\"\"><li><p>Q3 <strong>Bookings</strong> were down 33% YoY to $448M.</p></li><li><p>As you can see below, Q3 <strong>Quarterly Active Users</strong> were down 4% YoY and flat QoQ at 544M, due to global economies reopening.</p></li><li><p>More importantly, Q3 <strong>Quarterly Paying Users</strong> were down even more, decreasing by 21% YoY to 41M.</p></li><li><p>As a result, the <strong>Paying User Ratio</strong> dropped to new lows of just 7.4%, reflecting lower monetization rates within Garena.</p></li></ul><p>As it relates to the Digital Entertainment business, QPUs is the most important metric to track. We saw a decent recovery in the metric in Q2 but it dipped again in Q3. On a positive note, QPUs remains higher than Q1&#39;s low of 38M - hopefully, that is indeed the low and that Garena continues to add more QPUs in the following quarters. That way, Garena can return to growth mode, after nearly two years of decline.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/09f1c182706366ef611d329c32831ec4\" title=\"\" tg-width=\"557\" tg-height=\"373\"/></p><p>Author&#39;s Analysis</p><p>Turning to Shopee, Q3 E-Commerce Revenue grew 16% YoY to $2.2B, an all-time high for the company. This includes:</p><ul style=\"\"><li><p><strong>Core Marketplace Revenue</strong> of $1.3B, up 32% YoY.</p></li><li><p><strong>Value-added Services Revenue</strong> of $0.6B, down 4% YoY.</p></li></ul><p>Similar to Garena, Shopee&#39;s growth has also slowed down materially, although it stayed positive, unlike the gaming division.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/634c1fc9a4521ef2155897ccbc198d3e\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>Growth was bolstered by a 5% YoY increase in GMV to $20.1B and a 13% YoY increase in Gross Orders to 2.2B.</p><p>As you may have noticed, E-Commerce Revenue grew faster than GMV, primarily due to Shopee&#39;s improved Take Rate - or Revenue divided GMV - which reflects Shopee&#39;s increasing ability to monetize its platform.</p><p>As you can see, Q3 Take Rate was about 11.1%, which is about 100 basis points higher YoY. However, that figure is not as high as Q4&#39;s 11.7%, which could possibly mean lower fees for sellers and/or higher discounts for buyers, in an attempt to stimulate stronger growth.</p><p>(Note: Take Rates in Q1 and Q2 are left blank as Sea did not disclose GMV figures in both periods).</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/78a498f36f8fad2cd014278083ec2472\" title=\"\" tg-width=\"640\" tg-height=\"266\"/></p><p>Author&#39;s Analysis</p><p>Regardless, management is seeing strong engagement within the Shopee platform, particularly with Shopee Live as the company pushes into e-commerce live streaming. For instance:</p><ul style=\"\"><li><p>In Indonesia, 20% of daily active users watched live streaming in October. At the same time, the number of average daily streamers, hours streamed, and daily stream sessions all grew by more than three times in October, as compared to June.</p></li><li><p>In Southeast Asia, orders on live streaming already accounted for more than 10% of total order volume in October.</p></li></ul><p>With that in mind, Shopee Live should continue to be a key growth driver for Shopee as the company invests in more collaborations with content creators and live-streaming sellers.</p><p>Moving on, SeaMoney continues to grow faster than the overall company. In Q3, Digital Financial Services Revenue grew by 37% YoY to $446M, a record high for the company. This was mainly due to its growing credit business, with its total credit portfolio expanding by 5% QoQ to $2.9B.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4e05834ebb0e75255e2d4729fc067873\" title=\"\" tg-width=\"640\" tg-height=\"263\"/></p><p>Author&#39;s Analysis</p><p>All in all, Shopee and SeaMoney continue to grow rapidly, although not as fast as they did a couple of years ago, and this is reasonable given the larger size of each of these businesses.</p><p>On the other hand, Garena is the clear laggard, dragging the entire business down to subpar growth. Because of Garena, the growth profile of Sea does not look impressive at all.</p><p>As the saying goes, <em>one bad apple spoils the bunch</em>.</p><p>Consequently, the growth slowdown gave investors a major shock. And disappointingly, they are quick to conclude that Sea&#39;s growth story is over.</p><p>Rest assured, I believe Sea could return to strong growth mode in the next few quarters due to relatively easier YoY comps in 2024, the relaunch of Free Fire in India, as well as continued momentum with SeaMoney.</p><h2 id=\"id_3016355670\">Profitability</h2><p>While growth has been lackluster, profitability is on the right trajectory.</p><p>In Q3, Gross Profit was $1.4B, up by 17% YoY, despite Revenue growing by only 5% YoY. As a result, Gross Margin expanded from 39% last year to 44% in Q3, primarily due to increased monetization and greater cost efficiencies in Shopee and SeaMoney.</p><p>Although Gross Margin has trended down over the last few quarters, the long-term trend is still up, and that demonstrates economies of scale within the business.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a5c0dec321168ceb31ac30400a615d77\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>Moving down the income statement, Q3 Operating Profit was $(128)M, which is a (4)% Margin. As you can see, Operating Margin flipped to negative again after three consecutive quarters of operating profitability.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d8bac52c39ba3ab3eb0afcf45608f767\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>Sea has been focusing on optimizing operating expenses and achieving higher cost efficiencies throughout most of 2022 and the first half of 2023. However, it seems that Sea is finally ramping up spending once again.</p><p>It looks like all the cost savings from other areas of the business were used for Sales and Marketing Expenses, which increased 12% YoY, or 86% QoQ, to $918M. Not surprisingly, over 90% of it was allocated to Shopee, which saw Sales and Marketing Expenses rising by 50% YoY to $862M.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dd9ad0557939b67866c7c0c0a43f5b80\" title=\"\" tg-width=\"640\" tg-height=\"358\"/></p><p>Sea Limited FY2023 Q3 Earnings Presentation</p><p>If we look at Operating Profit by segment, we can see that the E-Commerce segment turned unprofitable once again, burning $(428)M in Q3, representing an Operating Margin of (19)%. Despite the huge swing to the downside, the losses from the E-Commerce segment are covered by the other two higher-margin segments, which saw Operating Margins improving YoY and QoQ.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/1e6ab8a3cad931c5fa129a7cdc846e54\" title=\"\" tg-width=\"640\" tg-height=\"367\"/></p><p>Author&#39;s Analysis</p><p>It&#39;s safe to assume that with improved profitability in Garena and SeaMoney, management is turning more aggressive in terms of capturing market share and growing GMV for Shopee.</p><p>A few years ago, this strategy would not have been sustainable. But today, Sea is self-sufficient enough to exploit Shopee&#39;s growth potential.</p><p>What&#39;s more, Shopee in Brazil is inching closer to profitability, with Contribution Margin Loss Per Order improving 91% YoY to $0.10 in Q3. Eventually, this should put less burden on Shopee&#39;s operating profitability.</p><p>In addition, SeaMoney should also enjoy better unit economics over time as the segment scales - 40%+ Operating Margin looks possible given the momentum.</p><p>In Q3, Net Income was $(144)M, which is a (4)% Margin. Net Margin turned negative in Q3, again, due to elevated marketing spend. I expect this to continue as Q4 marks the holiday season, so don&#39;t be surprised if Net Margins remain negative.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/74ee34e2a22d4978897e9cee77c98a7c\" title=\"\" tg-width=\"640\" tg-height=\"264\"/></p><p>Author&#39;s Analysis</p><p>That said, Sea should return to GAAP Net Income profitability as the company scales further - I expect this to happen sooner rather than later.</p><p>Previously, Sea operated a growth-at-all-costs strategy, stacking loss after loss in pursuit of upsized growth. However, Sea has pivoted to one that balances growth and profitability, which led to margin expansion.</p><p>Be that as it may, the profitability narrative turned negative in Q3.</p><p>Fortunately, this was intentional - after some time of disciplined cost controls, management is now focusing on increasing market share and strengthening market leadership.</p><p>Sea, being in a fundamentally stronger position, is now ready to ramp up spending to stimulate growth.</p><p>The question remains as to whether Sea can sustain growth and improve profitability in the long run - not just for a few quarters. That is the ultimate test of a truly scalable business model.</p><h2 id=\"id_621106681\">Health</h2><p>Turning to the balance sheet, Sea has $6.0B of Cash and Short-term Investments with $4.6B of Total Debt, placing its Net Cash position at $1.4B.</p><p>As you can see, Net Cash has fallen substantially over the past two years as Sea has pretty much stopped raising capital in the equity and debt markets -as mentioned earlier, the company aims to be self-sufficient and not rely on external funding.</p><p>That said, we should see Net Cash build up over time as management focuses on profitable growth.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b24d6a235d3a320e6fa8a5404667d144\" title=\"\" tg-width=\"640\" tg-height=\"269\"/></p><p>Author&#39;s Analysis</p><p>In terms of cash generation, Sea had an Operating Cash Flow of about $600M in Q3, which represents an OCF Margin of 18%. In the first nine months, OCF improved from $(1.4)B to $1.8B, which is remarkable given that the cost-cutting initiatives started only a year ago. This goes to show that Sea is capable of managing its capital efficiently.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/12dc4cef484fde4a924f1df503a598c8\" title=\"\" tg-width=\"640\" tg-height=\"258\"/></p><p>Author&#39;s Analysis</p><p>With positive cash flow generation in place, Sea is in a good financial position to reinvest and reaccelerate growth, which is what the company aims to do moving forward.</p><blockquote><p>In this current period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership. We now have scale, a deep understanding of our markets, and strong localized execution across diverse geographies. This gives us a wide competitive moat, and we intend to grow it further. 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.</p><p>(Sea Limited FY2023 Q3 Results)</p></blockquote><h2 id=\"id_2318822457\">Outlook</h2><p>Management did not give any guidance. I think part of the reason why the stock sold off so much is that management failed to give guidance, which is just another way of saying: 1) &#34;We don&#39;t have good visibility in our current operating environment&#34; or 2) &#34;Our forecast is so bad that we&#39;re better off not giving guidance&#34;.</p><p>Whatever it is, I would love to see better communication from management moving forward, and hopefully, they&#39;ll do that in their Q4 earnings release. This should boost investor confidence.</p><p>That said, analysts expect Q4 Revenue of $3.5B, which is only a 2% growth YoY. This also means that they expect Revenue to decelerate from Q3&#39;s growth of 5%.</p><p>During the earnings call, management made it clear that they &#34;will continue to invest in the holiday shopping season, which we believe is a good time to acquire users, gain market share, and strengthen our content ecosystem&#34;.</p><p>In other words, we should continue to see elevated marketing spend and this should lead to higher-than-expected Revenue growth in Q4.</p><p>Regardless, Sea should enter 2024 with relatively easier comps, which is why analysts expect growth to reaccelerate to 12%, on top of 2023&#39;s growth of just 5%.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/82661198a4da56a9a8294864885230a4\" title=\"\" tg-width=\"640\" tg-height=\"164\"/></p><p>Seeking Alpha</p><p>In other news, Shopee remains the third most downloaded shopping app worldwide, which should support growth in future quarters.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4dafdb9ed185505ded1cef13e474b5e1\" title=\"\" tg-width=\"509\" tg-height=\"318\"/></p><p>Data.ai</p><p>More excitingly, two of Garena&#39;s mobile games - Black Clover M and Free Fire - are the top three most downloaded games worldwide in the last 30 days. Including the relaunch of Free Fire in India, these should drive sequential growth for Sea&#39;s Digital Entertainment segment.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b54f87bfd7e11f6628a90b7589103cfe\" title=\"\" tg-width=\"509\" tg-height=\"318\"/></p><p>Data.ai</p><p>With this in mind, I believe Q4 analyst estimates are too low. I believe Sea&#39;s market leadership, Shopee&#39;s return to growth spending, and Garena&#39;s rebound, should all drive better-than-expected growth numbers in Q4, which should set the stock up for a strong 2024.</p><h2 id=\"id_2369160259\">Valuation</h2><p>From a historical standpoint, Sea is trading at its cheapest valuation ever.</p><p>As you can see, Sea is trading at just 1.5x EV to Revenue, far below its peak of 31.8x. A return to its 5-year average multiple of 11.1x would result in a 700%+ appreciation in share price.</p><p>Sure, the lower multiple is justified given the company&#39;s slowing growth rate. However, Sea is now a much larger, more profitable, and competitively stronger company than it was two years ago.</p><p>It&#39;s funny how the same investors who were happy to buy the stock back when it traded at $300+ with a Revenue multiple of more than 30x, are now quick to dismiss the stock despite trading at a 90% discount to its all-time highs.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e0cc4bbc346c149e67b9766bfc6c169d\" title=\"\" tg-width=\"635\" tg-height=\"435\"/></p><p>Data by YCharts</p><p>My DCF model also shows how undervalued the stock is. Below, you can see my key assumptions:</p><p>Author&#39;s Analysis</p><p>For Revenue growth, I followed analyst estimates for the first three years and slowly dropped growth rates over time. By 2032, I expect $30.8B in revenue for Sea.</p><p>I also expect Sea to achieve economies of scale through the years, thus leading to margin expansion. By 2032, I expect a stable Free Cash Flow Margin profile of just 17.5%. As a reference, <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> (MELI), which has a very similar business model to Sea, has an FCF Margin of 23.6% in 2022, so my long-term FCF Margin for Sea is actually very conservative.</p><p>Author&#39;s Analysis</p><p>Using a discount rate of 10% and a perpetual growth rate of 2.5%, I arrive at an intrinsic value per share of ~$83 for Sea stock, which is more than double the current price of $39. It is also much higher than the average analyst price target of $56.</p><p>Below, I&#39;ve also included my bear and bull cases.</p><p>As you can see, even assuming a lower FCF Margin and perpetual growth rate, Sea still trades at a considerable discount.</p><p>Author&#39;s Analysis</p><p>In short, I believe Sea stock is significantly undervalued.</p><p>But I guess a lot of investors think otherwise, as we&#39;ve seen with the continual decline in the share price.</p><p>Let me remind you. Sea has:</p><ol start=\"1\" style=\"\"><li><p>Some of the most valuable and successful mobile game assets in the world.</p></li><li><p>The most dominant e-commerce platform in Southeast Asia (and possibly Brazil soon).</p></li><li><p>A fast-growing fintech giant in the making.</p></li></ol><p>Now, at $40 a share, Sea stock seems to be left dead in the water with sentiment at an all-time low - it pays to be a contrarian today.</p><p>In my eyes, Sea is trading at deep value territory and any slight positive catalyst could launch the stock price higher with relative ease.</p><h2 id=\"id_2539944736\">Risks</h2><p>Competition is the biggest bear argument against Sea. Many investors fear the company is losing market share to competition, thus slowing Sea&#39;s growth. This includes names such as Lazada (BABA), Tokopedia, and Mercado Libre.</p><p>Most recently, TikTok joined forces with Indonesia&#39;s GoTo, which owns Gojek and Tokopedia. The social media company invested over $1.5B in GoTo, including $840M to acquire a 75% stake in Tokopedia.</p><p>The deal enabled TikTok to resume its shopping app service in Indonesia, following Indonesia&#39;s ban on e-commerce transactions directly on social media platforms.</p><p>Under the agreement, TikTok Shop will be combined with Tokopedia, essentially allowing TikTok to bypass the ban by redirecting shoppers to Tokopedia, where they will complete their purchases.</p><p>This was a huge development as there are a lot of synergies:</p><ul style=\"\"><li><p><strong>TikTok</strong> - the biggest social media platform in Indonesia.</p></li><li><p><strong>Tokopedia</strong> - an e-commerce powerhouse in Indonesia.</p></li><li><p><strong>Gojek</strong> - has an extensive logistics network and the most popular mobile wallet in Indonesia, GoPay.</p></li></ul><p>It made sense why shares of Sea plummeted following this news.</p><p>But one part of the deal really got my attention: TikTok acquiring 75% of Tokopedia for $840M.</p><p>That implies a valuation of about $1.1B.</p><p>Just three years ago, Google (GOOG) invested in Tokopedia at a valuation of $7.5B.</p><p>To see that big of a valuation drop and to see GoTo selling Indonesia&#39;s jewel to a foreign company at less than $1B, seems fishy to me. GoTo might be in a bad financial position to pull off that kind of move.</p><p>And this could actually be bullish for Sea.</p><p>In addition, if the deal doesn&#39;t fall through (expected to close in Q1 of 2024), Sea could enjoy market share gains which should be a major catalyst for the stock.</p><p>If it does go through, Sea stock may be pressured for some time as sentiment turns sour again.</p><h2 id=\"id_4049296853\">Thesis</h2><p>Sea is at an inflection point.</p><p>More specifically, the company is gearing up for profitable growth as it abandons the grow-at-all-costs mentality.</p><p>While growth has been lackluster lately, Sea still has a long growth runway due to secular trends in the mobile gaming, e-commerce, and fintech industries.</p><p>That is why management is sacrificing short-term profitability for long-term market share gains and leadership, which should generate strong returns for shareholders in the long run.</p><p>Investors loved it at $300, back when the stock was trading at nonsensical valuations.</p><p>Today, investors can pick up shares of Sea at a 90% discount, despite being a fundamentally stronger company overall. What&#39;s more, growth is set to reaccelerate in 2024 and analysts have set a low bar on Sea as well.</p><p>Yet, it receives no love.</p><p>I think that&#39;s just irrational market behavior - in this kind of situation, it pays to be a contrarian.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: No Love</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: No Love\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-12-28 10:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4659992-sea-limited-no-love><strong>Seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sea's growth story is far from over.Profitability turned negative in Q3 - this was intentional.Analyst estimates are too low.Sea is trading at its cheapest valuation multiple ever.Investors loved it ...</p>\n\n<a href=\"https://seekingalpha.com/article/4659992-sea-limited-no-love\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1048596156.SGD":"Blackrock Asian Growth Leaders A2 SGD-H","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0821914370.USD":"贝莱德亚洲成长领袖A2","BK4554":"元宇宙及AR概念","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","LU0048573645.USD":"富达东盟基金","BK4592":"伊斯兰概念","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0354030438.USD":"富国美国大盘成长基金Cl A Acc","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","BK4587":"ChatGPT概念","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","BK4588":"碎股","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","LU0965509101.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"A\" (SGDHDG) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","SG9999002620.SGD":"LionGlobal South East Asia SGD","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","BK4579":"人工智能","LU0072462426.USD":"贝莱德全球配置 A2","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0823411888.USD":"法巴消费创新基金 Cap","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0210535034.USD":"摩根大通拉丁美洲基金","LU0050427557.USD":"富达拉丁美洲基金","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU1267930227.SGD":"TEMPLETON GLOBAL BALANCED \"AS\" (SGD) ACC A","BK4220":"综合零售","SE":"Sea Ltd","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","BK4581":"高盛持仓","LU2279701549.SGD":"JPMorgan Funds - Emerging Markets Sustainable Equity A (acc) SGD","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0067412154.USD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (USD) ACC","BK4548":"巴美列捷福持仓"},"source_url":"https://seekingalpha.com/article/4659992-sea-limited-no-love","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2394756303","content_text":"Sea's growth story is far from over.Profitability turned negative in Q3 - this was intentional.Analyst estimates are too low.Sea is trading at its cheapest valuation multiple ever.Investors loved it at $300. Shouldn't they love it even more at $40?IntroductionSea Limited (NYSE: SE) is a Singaporean-based tech conglomerate that operates three high-quality companies in three secular markets:Garena - a global game developer and publisher of mobile and PC games including Free Fire, Arena of Valor, and Call of Duty Mobile.Shopee - the leading e-commerce platform in Southeast Asia, Taiwan, and Brazil.SeaMoney - a fast-growing digital financial services provider in Southeast Asia. These services include ShopeePay, SeaBank, and SeaInsure.The company was one of the most intriguing growth stories in the early days of the pandemic. However, growth has slowed significantly over the last few quarters, so much so that it led to one of the most devastating crashes in the growth stock universe.The funny thing is that investors were buying the stock aggressively back when the stock was trading at nosebleed valuations.Investors loved it at $300. Shouldn't they love it even more at $40?Well, that's not the case as the stock continues to struggle while the broader markets rally off to new highs.That said, following its spectacular decline of about 90%, I make the investment case that it pays to be a contrarian today - I believe the risk to reward for Sea stock is heavily skewed to the upside.GrowthLooking at its topline, Q3 Total Revenue was $3.3B, up by a mere 5% YoY. While this beat analyst estimates by $90M, or 3%, Sea's growth has gone through a significant slowdown over the last few quarters, from its glory days of triple-digit growth in 2020 and 2021, to just mid-single-digit growth as of recently.Years of growth have been pulled forward due to the pandemic, which consequently led to the company facing very tough YoY comps in the last couple of years, thus the steep deceleration in growth.Now you see why shares of Sea are down so much.Author's AnalysisLet's take a look at the performance of each of Sea's business units.Looking at the gaming division first, Q3 Digital Entertainment Revenue was $592M. While this is up 12% QoQ, it is down 34% YoY and still far from its highs of $1.4B in Q4 of 2021. Nevertheless, it is still encouraging to see some signs of recovery in the business.Author's AnalysisThe drop in Revenue was due to the moderation in user engagement, lower monetization, as well as the Free Fire ban in India starting in early 2022.Q3 Bookings were down 33% YoY to $448M.As you can see below, Q3 Quarterly Active Users were down 4% YoY and flat QoQ at 544M, due to global economies reopening.More importantly, Q3 Quarterly Paying Users were down even more, decreasing by 21% YoY to 41M.As a result, the Paying User Ratio dropped to new lows of just 7.4%, reflecting lower monetization rates within Garena.As it relates to the Digital Entertainment business, QPUs is the most important metric to track. We saw a decent recovery in the metric in Q2 but it dipped again in Q3. On a positive note, QPUs remains higher than Q1's low of 38M - hopefully, that is indeed the low and that Garena continues to add more QPUs in the following quarters. That way, Garena can return to growth mode, after nearly two years of decline.Author's AnalysisTurning to Shopee, Q3 E-Commerce Revenue grew 16% YoY to $2.2B, an all-time high for the company. This includes:Core Marketplace Revenue of $1.3B, up 32% YoY.Value-added Services Revenue of $0.6B, down 4% YoY.Similar to Garena, Shopee's growth has also slowed down materially, although it stayed positive, unlike the gaming division.Author's AnalysisGrowth was bolstered by a 5% YoY increase in GMV to $20.1B and a 13% YoY increase in Gross Orders to 2.2B.As you may have noticed, E-Commerce Revenue grew faster than GMV, primarily due to Shopee's improved Take Rate - or Revenue divided GMV - which reflects Shopee's increasing ability to monetize its platform.As you can see, Q3 Take Rate was about 11.1%, which is about 100 basis points higher YoY. However, that figure is not as high as Q4's 11.7%, which could possibly mean lower fees for sellers and/or higher discounts for buyers, in an attempt to stimulate stronger growth.(Note: Take Rates in Q1 and Q2 are left blank as Sea did not disclose GMV figures in both periods).Author's AnalysisRegardless, management is seeing strong engagement within the Shopee platform, particularly with Shopee Live as the company pushes into e-commerce live streaming. For instance:In Indonesia, 20% of daily active users watched live streaming in October. At the same time, the number of average daily streamers, hours streamed, and daily stream sessions all grew by more than three times in October, as compared to June.In Southeast Asia, orders on live streaming already accounted for more than 10% of total order volume in October.With that in mind, Shopee Live should continue to be a key growth driver for Shopee as the company invests in more collaborations with content creators and live-streaming sellers.Moving on, SeaMoney continues to grow faster than the overall company. In Q3, Digital Financial Services Revenue grew by 37% YoY to $446M, a record high for the company. This was mainly due to its growing credit business, with its total credit portfolio expanding by 5% QoQ to $2.9B.Author's AnalysisAll in all, Shopee and SeaMoney continue to grow rapidly, although not as fast as they did a couple of years ago, and this is reasonable given the larger size of each of these businesses.On the other hand, Garena is the clear laggard, dragging the entire business down to subpar growth. Because of Garena, the growth profile of Sea does not look impressive at all.As the saying goes, one bad apple spoils the bunch.Consequently, the growth slowdown gave investors a major shock. And disappointingly, they are quick to conclude that Sea's growth story is over.Rest assured, I believe Sea could return to strong growth mode in the next few quarters due to relatively easier YoY comps in 2024, the relaunch of Free Fire in India, as well as continued momentum with SeaMoney.ProfitabilityWhile growth has been lackluster, profitability is on the right trajectory.In Q3, Gross Profit was $1.4B, up by 17% YoY, despite Revenue growing by only 5% YoY. As a result, Gross Margin expanded from 39% last year to 44% in Q3, primarily due to increased monetization and greater cost efficiencies in Shopee and SeaMoney.Although Gross Margin has trended down over the last few quarters, the long-term trend is still up, and that demonstrates economies of scale within the business.Author's AnalysisMoving down the income statement, Q3 Operating Profit was $(128)M, which is a (4)% Margin. As you can see, Operating Margin flipped to negative again after three consecutive quarters of operating profitability.Author's AnalysisSea has been focusing on optimizing operating expenses and achieving higher cost efficiencies throughout most of 2022 and the first half of 2023. However, it seems that Sea is finally ramping up spending once again.It looks like all the cost savings from other areas of the business were used for Sales and Marketing Expenses, which increased 12% YoY, or 86% QoQ, to $918M. Not surprisingly, over 90% of it was allocated to Shopee, which saw Sales and Marketing Expenses rising by 50% YoY to $862M.Sea Limited FY2023 Q3 Earnings PresentationIf we look at Operating Profit by segment, we can see that the E-Commerce segment turned unprofitable once again, burning $(428)M in Q3, representing an Operating Margin of (19)%. Despite the huge swing to the downside, the losses from the E-Commerce segment are covered by the other two higher-margin segments, which saw Operating Margins improving YoY and QoQ.Author's AnalysisIt's safe to assume that with improved profitability in Garena and SeaMoney, management is turning more aggressive in terms of capturing market share and growing GMV for Shopee.A few years ago, this strategy would not have been sustainable. But today, Sea is self-sufficient enough to exploit Shopee's growth potential.What's more, Shopee in Brazil is inching closer to profitability, with Contribution Margin Loss Per Order improving 91% YoY to $0.10 in Q3. Eventually, this should put less burden on Shopee's operating profitability.In addition, SeaMoney should also enjoy better unit economics over time as the segment scales - 40%+ Operating Margin looks possible given the momentum.In Q3, Net Income was $(144)M, which is a (4)% Margin. Net Margin turned negative in Q3, again, due to elevated marketing spend. I expect this to continue as Q4 marks the holiday season, so don't be surprised if Net Margins remain negative.Author's AnalysisThat said, Sea should return to GAAP Net Income profitability as the company scales further - I expect this to happen sooner rather than later.Previously, Sea operated a growth-at-all-costs strategy, stacking loss after loss in pursuit of upsized growth. However, Sea has pivoted to one that balances growth and profitability, which led to margin expansion.Be that as it may, the profitability narrative turned negative in Q3.Fortunately, this was intentional - after some time of disciplined cost controls, management is now focusing on increasing market share and strengthening market leadership.Sea, being in a fundamentally stronger position, is now ready to ramp up spending to stimulate growth.The question remains as to whether Sea can sustain growth and improve profitability in the long run - not just for a few quarters. That is the ultimate test of a truly scalable business model.HealthTurning to the balance sheet, Sea has $6.0B of Cash and Short-term Investments with $4.6B of Total Debt, placing its Net Cash position at $1.4B.As you can see, Net Cash has fallen substantially over the past two years as Sea has pretty much stopped raising capital in the equity and debt markets -as mentioned earlier, the company aims to be self-sufficient and not rely on external funding.That said, we should see Net Cash build up over time as management focuses on profitable growth.Author's AnalysisIn terms of cash generation, Sea had an Operating Cash Flow of about $600M in Q3, which represents an OCF Margin of 18%. In the first nine months, OCF improved from $(1.4)B to $1.8B, which is remarkable given that the cost-cutting initiatives started only a year ago. This goes to show that Sea is capable of managing its capital efficiently.Author's AnalysisWith positive cash flow generation in place, Sea is in a good financial position to reinvest and reaccelerate growth, which is what the company aims to do moving forward.In this current period, we will prioritize investing in the business to increase our market share and further strengthen our market leadership. We now have scale, a deep understanding of our markets, and strong localized execution across diverse geographies. This gives us a wide competitive moat, and we intend to grow it further. 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.(Sea Limited FY2023 Q3 Results)OutlookManagement did not give any guidance. I think part of the reason why the stock sold off so much is that management failed to give guidance, which is just another way of saying: 1) \"We don't have good visibility in our current operating environment\" or 2) \"Our forecast is so bad that we're better off not giving guidance\".Whatever it is, I would love to see better communication from management moving forward, and hopefully, they'll do that in their Q4 earnings release. This should boost investor confidence.That said, analysts expect Q4 Revenue of $3.5B, which is only a 2% growth YoY. This also means that they expect Revenue to decelerate from Q3's growth of 5%.During the earnings call, management made it clear that they \"will continue to invest in the holiday shopping season, which we believe is a good time to acquire users, gain market share, and strengthen our content ecosystem\".In other words, we should continue to see elevated marketing spend and this should lead to higher-than-expected Revenue growth in Q4.Regardless, Sea should enter 2024 with relatively easier comps, which is why analysts expect growth to reaccelerate to 12%, on top of 2023's growth of just 5%.Seeking AlphaIn other news, Shopee remains the third most downloaded shopping app worldwide, which should support growth in future quarters.Data.aiMore excitingly, two of Garena's mobile games - Black Clover M and Free Fire - are the top three most downloaded games worldwide in the last 30 days. Including the relaunch of Free Fire in India, these should drive sequential growth for Sea's Digital Entertainment segment.Data.aiWith this in mind, I believe Q4 analyst estimates are too low. I believe Sea's market leadership, Shopee's return to growth spending, and Garena's rebound, should all drive better-than-expected growth numbers in Q4, which should set the stock up for a strong 2024.ValuationFrom a historical standpoint, Sea is trading at its cheapest valuation ever.As you can see, Sea is trading at just 1.5x EV to Revenue, far below its peak of 31.8x. A return to its 5-year average multiple of 11.1x would result in a 700%+ appreciation in share price.Sure, the lower multiple is justified given the company's slowing growth rate. However, Sea is now a much larger, more profitable, and competitively stronger company than it was two years ago.It's funny how the same investors who were happy to buy the stock back when it traded at $300+ with a Revenue multiple of more than 30x, are now quick to dismiss the stock despite trading at a 90% discount to its all-time highs.Data by YChartsMy DCF model also shows how undervalued the stock is. Below, you can see my key assumptions:Author's AnalysisFor Revenue growth, I followed analyst estimates for the first three years and slowly dropped growth rates over time. By 2032, I expect $30.8B in revenue for Sea.I also expect Sea to achieve economies of scale through the years, thus leading to margin expansion. By 2032, I expect a stable Free Cash Flow Margin profile of just 17.5%. As a reference, MercadoLibre (MELI), which has a very similar business model to Sea, has an FCF Margin of 23.6% in 2022, so my long-term FCF Margin for Sea is actually very conservative.Author's AnalysisUsing a discount rate of 10% and a perpetual growth rate of 2.5%, I arrive at an intrinsic value per share of ~$83 for Sea stock, which is more than double the current price of $39. It is also much higher than the average analyst price target of $56.Below, I've also included my bear and bull cases.As you can see, even assuming a lower FCF Margin and perpetual growth rate, Sea still trades at a considerable discount.Author's AnalysisIn short, I believe Sea stock is significantly undervalued.But I guess a lot of investors think otherwise, as we've seen with the continual decline in the share price.Let me remind you. Sea has:Some of the most valuable and successful mobile game assets in the world.The most dominant e-commerce platform in Southeast Asia (and possibly Brazil soon).A fast-growing fintech giant in the making.Now, at $40 a share, Sea stock seems to be left dead in the water with sentiment at an all-time low - it pays to be a contrarian today.In my eyes, Sea is trading at deep value territory and any slight positive catalyst could launch the stock price higher with relative ease.RisksCompetition is the biggest bear argument against Sea. Many investors fear the company is losing market share to competition, thus slowing Sea's growth. This includes names such as Lazada (BABA), Tokopedia, and Mercado Libre.Most recently, TikTok joined forces with Indonesia's GoTo, which owns Gojek and Tokopedia. The social media company invested over $1.5B in GoTo, including $840M to acquire a 75% stake in Tokopedia.The deal enabled TikTok to resume its shopping app service in Indonesia, following Indonesia's ban on e-commerce transactions directly on social media platforms.Under the agreement, TikTok Shop will be combined with Tokopedia, essentially allowing TikTok to bypass the ban by redirecting shoppers to Tokopedia, where they will complete their purchases.This was a huge development as there are a lot of synergies:TikTok - the biggest social media platform in Indonesia.Tokopedia - an e-commerce powerhouse in Indonesia.Gojek - has an extensive logistics network and the most popular mobile wallet in Indonesia, GoPay.It made sense why shares of Sea plummeted following this news.But one part of the deal really got my attention: TikTok acquiring 75% of Tokopedia for $840M.That implies a valuation of about $1.1B.Just three years ago, Google (GOOG) invested in Tokopedia at a valuation of $7.5B.To see that big of a valuation drop and to see GoTo selling Indonesia's jewel to a foreign company at less than $1B, seems fishy to me. GoTo might be in a bad financial position to pull off that kind of move.And this could actually be bullish for Sea.In addition, if the deal doesn't fall through (expected to close in Q1 of 2024), Sea could enjoy market share gains which should be a major catalyst for the stock.If it does go through, Sea stock may be pressured for some time as sentiment turns sour again.ThesisSea is at an inflection point.More specifically, the company is gearing up for profitable growth as it abandons the grow-at-all-costs mentality.While growth has been lackluster lately, Sea still has a long growth runway due to secular trends in the mobile gaming, e-commerce, and fintech industries.That is why management is sacrificing short-term profitability for long-term market share gains and leadership, which should generate strong returns for shareholders in the long run.Investors loved it at $300, back when the stock was trading at nonsensical valuations.Today, investors can pick up shares of Sea at a 90% discount, despite being a fundamentally stronger company overall. What's more, growth is set to reaccelerate in 2024 and analysts have set a low bar on Sea as well.Yet, it receives no love.I think that's just irrational market behavior - in this kind of situation, it pays to be a contrarian.","news_type":1},"isVote":1,"tweetType":1,"viewCount":444,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}