Sea's "adjusted" revenue includes deferred revenue at its gaming business and excludes some sales incentives at its e-commerce and digital payment businesses. I have decided to write a stock analysis on Sea Limited (SE) after it’s share price rallied 300% YTD. They also enhanced Shopee Feed with a new feature called Shopee Stories. Another commonly used metric is to look at how much they are spending on marketing (subsidies, vouchers, free shipping & etc.) Though most of them were raised from equity financing rather than organic cash generation. Investing in These Growth Stocks Could Make You Rich, Dow Jones Futures: Two Game Plans For The Stock Market Rally; Apple, Alibaba, Nvidia, Target, Broadcom Show Bullish Action, Got $3,000? It is also the highest-grossing mobile game in both Latin America and Southeast Asia. Similar to the business model of Lazada, Qoo10 & Taobao, it is a marketplace that connects buyers and sellers. Yue sin this is a very good post. The company has a market capitalization of $78.04 Billion. This measures how many years can the company sustain before requiring another financing again. Bans, TikTok Owner to Spend Billions in Singapore After U.S. Ban, 3 Tech Stocks to Buy If the Market Crashes in September, Thai e-commerce firm JD Central to ramp up seller support amid pandemic, 3 Foreign Tech Picks Amid The Domestic Selloff, Why Shopify, MercadoLibre, and Sea Limited Stocks Sank Today, Why Sea Limited, Etsy, and Stocks Sank Today, Why Sea Limited Stock Climbed 25% in August, India Bans Over a Hundred More Chinese Apps as Tensions Escalate. If you believe in Southeast Asia, like Grab, EDB or UOB, Sea Limited (SE) is the stock to own. This e-commerce fight between the 2 tech giants is reminiscent across many sectors in Asia. Digital banking license is also on its way. } The company’s stock led the NYSE gainers with a relatively large price hike in the past couple of weeks. Probably the most exciting news for SeaMoney is its bid outcome for Singapore’s digital banking license. For Q2 2020, both the number of active users and paying users have been showing tremendous Y-o-Y growth. In Singapore, Shopee has the highest web visits in Q2 2020 but came in 3rd for Q1 2020. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that offers integrated payment and logistics infrastructure and seller services. listeners: [], 1 Fusionopolis Place When more users come on board, that would attract more sellers and that gets the flywheel rolling. There are a variety of mini “Shopee Games” where users can collect “Shopee Coins”. callback: cb Alibaba Replaces CEO of Southeast Asian Arm Lazada, Sea Limited (SE): Leading The Digital Revolution In Southeast Asia, The Zacks Analyst Blog Highlights: Alibaba, Splunk and Sea, 3 Tech Stock Opportunities To Watch On A Market Pullback, Why Sea Limited Stock Surged 43.6% in May, 3 International Stocks Whose Products You Will Soon Use, Sea Limited (SE): Hedge Funds Sentiment Still At All Time High, Sea Limited Prices Offering of US$1 Billion Convertible Notes, Sea (SE) Incurs Loss in Q1, Gets a Top-Line Boost on Free Fire, Sea Limited Announces Proposed Offering of Convertible Notes, Sea First-Quarter Results Mixed But Stock Jumps To New High. The popularity of Shopee differs in different parts of Southeast Asia. But it is also where the highest growth and data is. That’s why Shopee is moving towards social user experience and videos rather than just a marketplace for people to buy/sell goods. (Tesla). This means that whenever a user pays for in-game purchases or virtual items in the game, it is recorded as “Deferred Revenue”. Let's conquer your financial goals together...faster. Follow him on Twitter for more updates! There is a massive macro tailwind behind them. They would definitely see their businesses capturing more value under the backdrop of a young growing population who are internet-savy. Additionally, Sea Limited also do purchase products from manufacturers and third-parties to resell them directly on Shopee’s platform. I have decided to write a stock analysis on Sea Limited (SE) after it’s share price rallied 300% YTD. Sea's stock can be difficult to value because it isn't profitable. I personally missed out on that rally due to my bearish concerns about Sea's e-commerce business, so it's time to reevaluate the four things I got wrong about Sea -- and whether or not it's too late to buy this high-growth stock. Net Burn Rate takes into account revenue and it is calculated by taking the year-end cash balance divided by its operating loss. At the end of it, I will also share my personal opinion on whether SE is a good stock buy. Their revenue in FY 2019 is about US$2.2 billion and the growth has been staggering. Sea is firing on all 3 cylinders and it is charging ahead at full throttle speed. Sea serves customers worldwide. as a % of revenue. Sea Limited is a great stock to add largely because it has been flying under the radar for many U.S. investors. This is contrast with the world’s average of 2%. Sea's e-commerce and gaming businesses both gained momentum throughout the COVID-19 crisis. Thanks Kyith for your very supportive and encouraging words! Apart from 3rd party games, Garena also develops its own in-house games. It is a good sign that marketing expenses are slowly declining over the years. Please, SoftBanks Son Presses Grab for Truce With Rival Gojek, Amazon Is Testing Sea Limited in Its Core Market, Forget Bitcoin: Here Are 3 Stocks You Should Buy Instead, Only Have $500 to Invest? They started off with the mobile app first before creating the web version of it. A higher GMV indicates more sellers, more goods or either that more high-ticket items. Though cash is received, revenue is not recognised on the income statement. Sea owns Shopee, one of the largest e-commerce marketplaces in Southeast Asia. Free Fire turns out to be a home run hit for Sea Limited. Copyright © 2020 | WordPress Theme by MH Themes, Hey Rolf, yea you’re right, Alibaba is almost doing everything right now. Adding on to Shopee’s dominance in mobile is because they introduced many social and gamification features. No 17-10, Galaxis Since it is an international stock, it simply hasn’t received the same exposure as other tech stocks have lately. Failing to do so means they are literally burning cash away. Those adjustments are messy and distort Sea's top-line growth. Shopee has already deepened its presence across most countries in Southeast Asia and Taiwan. At this trajectory, it is estimated that the internet economy would be worth about $300 billion by 2025. Pony Ma is just a phone call away and there will never be a lack of ideas for gaming content. Example, the Thais and Viets trust celebrity endorsers while Singaporeans and Malaysians respond to flash sales and discounts. Shopee even has “Shopee Feed” where users can continuously scroll through a lively ecosystem like Facebook. They are synthesizing the social and video features of Facebook and TikTok onto their shopping platform. Sea Limited (NYSE:SE) announced its quarterly earnings data on Tuesday, August, 18th. Great conclusion to sum it all up too. My strategy now is just to buy, if you think it is a solid company. Higher Gross Orders indicate more people are buying stuff from Shopee’s platform. These 3 Great Stocks Can Make You Rich, 3 Top Video Game Stocks to Buy in October, The 21-Day Exponential Moving Average: Why This Is Your New Edge, Sea Limited Sponsored ADR (SE) Gains But Lags Market: What You Should Know, 3 Top E-Commerce Stocks -- Not Named Amazon, Got $3,000 and Under 30? Sea also isn't directly exposed to the escalating tensions between the U.S. and China. Sea offered direct exposure to those two markets, and it wasn't hampered by a big online advertising division and other macro-sensitive businesses. The growth of that segment easily offset Shopee's losses and lifted its adjusted EBITDA into positive territory. The cash from Garena can then acquire more users to Shopee. First is the number of users and second is the level of user engagement. The good thing about SE is that its gaming segment is already profitable. (e.g. This, in turn, attracts more users. But it is more or less a copy of Amazon. Some of their products include AirPay, ShopeePay and ShopeePayLater. Worrying too much about Sea's "adjusted" numbers. Today we’re going to take a look at the well-established Sea Limited . Shopee is an e-commerce platform that launched in 2015. But in its second-quarter report, Sea stated it would drop its "adjusted" revenue metric in future quarters and only report its GAAP revenue to satisfy the SEC's new reporting requirements. But in terms of revenue, it's a bit pricey at 15 times this year's sales. High user base leads to higher chance of user engagement which in turns lead to higher revenue. To start off, Sea Limited is a holding company and by itself has no substantive operations. However, I didn't think Garena could grow fast enough to offset those Shopee losses. That is about 25% of Southeat Asia’s GMV in 2019. Sellers can do livestreaming selling on “Shopee Live”. Sea Limited has not made its first profits yet. Since more than 50% of their revenue comes from Southeast Asia. Thirdly, the Southeast Asian internet economy has grown at a compounded annual growth rate (CAGR) of 33%. Or is this a giant mammoth growth stock that has been overlooked? Both Garena and Shopee has been showing strong healthy growth rates in user base. I'm still concerned about Sea's GAAP losses, which widened year-over-year from $280.1 million to $393.5 million during the quarter, but its cash and equivalents rose 10% annually to $3.43 billion -- mainly due to a $1 billion debt offering earlier this year -- so it won't run out of cash anytime soon.

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