Daily Brief Singapore: Sea , Yanlord Land, Comfortdelgro Corp and more

• Sea Ltd‘s 2Q2024 results reflected both the success of its bold strategies to drive growth in areas such as live-streaming whilst at the same time increasing take rates and profitability.
• Its core focus on competitive pricing, content, logistics, and especially advertising will help to drive growth, retention, and profitability as unit economics improve, whilst it rolls out its lending products.
• Competitive intensity has stabilised which should allow for take rates to rise higher, whilst Shopee is well positioned to further increase its lead. Valuations look reasonable given Sea Ltd’s profitable status.

Yanlord Land’s H1/24 results were acceptable in our view. The company reported robust top-line growth, albeit margins weakened amid the difficult operating environment. Positively, Yanlord continued to reduce debt and maintain stable leverage. In addition, the company has successfully refinanced its borrowings using cheaper onshore secured debt, which has helped to improve interest costs.

That said, Yanlord’s headroom to raise future secured debt has been reduced, as the bulk of its investment properties has already been pledged. Still, the company might be able to upsize its existing secured loans with higher LTV, or issue loans backed against new assets. Meanwhile, Yanlord continues to face sales pressure and a shrinking land bank in the absence of new land acquisitions.

• 1H 24 result was not disappointing, as OPM improved thanks to a few supportive measures that boosted revenue. 
• Taxi operating profit margin has improved since 2H 23 and is still producing a higher number than last year, thanks to the ZIG app service charge. 
• Comfortdelgro Corp (CD SP) is now trading at 1.2x PBR against 2x PBR 5 years ago pre COVID.