SEA’s earnings expectations
Based on the download data analysis from Google Play and Apple App Store, $Sea Ltd(SE)$ 's gaming and e-commerce popularity appeared to have further waned from the first quarter.
However, SEA continues to prioritise market share over profitability, as it invests heavily on expansions and new markets at the expense of profits. I expect cash flows from its profitable gaming business to still be subsidising its unprofitable e-commerce business.
With regulatory clampdowns on gaming and increasing competitions in e-commerce, SEA may have to continue to bleed for some time in order to stay ahead.
Hence, I’m not optimistic on SEA’s earnings in the second quarter. In fact, I regret not taking profits when the share price more than doubled after I bought some of its shares, but now am sitting on losses.
Nevertheless, SEA remains relevant and a formidable player in both gaming and e-commerce. Hopefully, the company will turn its attention to increasing profitability, so that I can be rewarded for staying through thick and thin with the company.
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