SEA is sailing into the green sea in 2023!
๐๐๐Finally there is some great news for $Sea Ltd(SE)$
as CEO Forrest Li said that SEA is set to record a profit for 2023. This was through an internal memo to staff reported by The Business Times on Friday.
However Forrest Li did not give further details on Sea's Q4 earnings.
Investors cheered and SEA's share price jumped 1.6% on Friday and is up 7.6% for the week. However SEA is still down 27% year todate.
After recording a profit in 3 consecutive previous quarters, SEA however reported its losses for the 3rd quarter 2023 at - USD 144 million as it chases a high growth strategy particularly in the intensely competitive ECommerce sector.
Shopee which is SEA 's ECommerce arm, remained the biggest revenue driver for SEA with its gross orders increasing by 23.6% quarter on quarter and 13.2% year on year.
SEA' s efforts to reduce spending were hindered by increased competition from TikTok especially in key markets like Indonesia. TikTok is back in Indonesia in December with a partnership in GoTo after a ban in September by Indonesia.
According to CEO Forrest Li, competition remains intense and SEA is still actively strengthening its market leadership in South East Asia. He said that 2024 will be a year that SEA can thrive in especially since it is entering it from a position of confidence and financial strength.
Shopee's major competitors in the South East Asian markets are$Alibaba(BABA)$
owned Lazada and Indonesia 's homegrown player Tokopedia. TikTok is also growing quickly too now that it is partnering with GoTo.
However Shopee is not the only business that SEA owns. SEA also owns Garena which is a leading online games developer and publisher with a global footprint across more than 130 markets. Its most popular game is Free Fire. In August 2023, Garena relaunched Free Fire after it was banned by India over national security concerns. SEA has now partnered with Yotta, owned by Indian company Hiranandani for cloud and other storage needs of local users data in India. SEA has also appointed Indian Cricket legend Mahendra Singh Dhoni as its brand ambassador in India.
The 3rd business arm of SEA is SEA Money, a digital payments and financial services provider in South East Asia. SEA offers various digital financial services and products including mobile wallet services, payment processing, credit, banking and insurance. SEA was also awarded a Full Digital Banking Licence by MAS in December 2020. SEA's Digital Bank is called MariBank which has attracted many Singaporeans with an attractive interest rate of 2.88% which is one of the highest currently in Singapore.
Wall Street Analysts are bullish on SEA with a Buy rating, Target price of USD 56.00, an upside potential of 48%.
2023 has been a tough year for SEA but things are looking better for 2024. As a Singaporean, I would like SEA to succeed and do well. SEA is a great company that needs lots of patience and time in the market to realise its full potential.
Go Long Go Strong Go SEA!
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