To The Moon

$Sea Ltd(SE)$Bearish

Sea Ltd (SE) reported its result last night, rather disappointing. Revenue missed Wallstreet’s expectation, and 2Q22 adjusted EBITDA was -USD$506m and net loss was -USD$570m. Pressure on the gaming division continues, while higher corporate HQ cost continue to weigh down the ecommerce business segment. To make things worse, SE has suspended its ecommerce guidance of $8.5-9.1bn due to macroeconomic uncertainties, which give hints that the near-term GMV could remain weak.

My honest personal opinion is that SE’s cash burn this quarter did not result in any meaningful improvement in profitability this quarter, despite Management’s latest emphasis on the profitability and efficiency. SE’s net cash continue to deplete and may further weaken without material improvement in profitability. Based on the net cash trend that I observed from their IR deck, SE may likely have to do another equity fund raising to support its ambition to be the market leadership in ecommerce and new Fintech ventures. Potential investors should keep an eye on its cashflow and balance sheet

I continue to like SE’s management team, their business model and its upside potential from potential profitability improvement for Shopee and SeaMoney, but due to the near-term weaker macroeconomics environment I would stay at the sideline and wait for better opportunities.

Please note this is my personal opinion and does not constitute as any financial advise.

@CaptainTiger@TigerStars@Daily_Discussion