Garena is Sea Limited$Sea Ltd(SE)$ 's digital entertainment business, which mainly offers mobile and PC online games. Garena's in-house game development capabilities have proven to be strong as it managed to develop its own successful self-developed game, Free Fire.
The third-party game publishing business of Garena has a solid track record with relationships with key global game developers like Tencent.
Garena uses a freemium monetization model to monetize the business and recognizes the importance of building a strong community and the power of esports. Near-term headwinds from the India Free Fire ban are stabilizing and improving in 2023 as we lap their full-year impact.
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This article was first posted in Outperforming the Market.
Investment thesis
For fundamentally driven investors, every selloff presents an opportunity. This is especially so when you're comfortable with the fundamentals of the company. The relatively cheap valuation of the company makes it evenmore attractive as an investment.
While we have seen a drastic selloff in Sea over the pastyear or so, I think that part of the selloff is warranted given that they have been pulling out of certain e-commerce markets that they were testing in, and Free Fire has resulted in headwinds for the gaming business in the near-term.
That said, I think that during times like these, investors looking to invest for the long-term needs to look at the big picture, dive deeper into the
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