In this briefing:
1. January Chip Revenues Down 15.6% Year-On-Year
The Semiconductor Industry Association in the US released the latest WSTS figures for January chip revenues. Monthly revenues are down 15.6% from January of 2018. While this is not a surprise to our clients it is frightening to those who anticipated that 2019 would be a continuation of the bonanza enjoyed in 2018.
2. Sea Ltd (SE US): The Bear Case – A One-Hit Wonder?
Despite burning through $700mn in cash in 2018, investors decided to give another $1.3bn to Sea Ltd (SE US) . We believe investors should treat Sea Ltd with caution for the following reasons:
A significant slowdown in e-commerce
Is the gaming division a one-hit wonder?
Expecting another 800mn cash burn into 2019
Consensus has priced in further upgrades while cash flow metrics worst in the sector
NB. Our team has taken both sides of the Sea Ltd investment case as we think this makes for better decision making and encourages unique thinking within our team. We strongly recommend that investors read my colleague Arun’s positive notes on the company listed below, if you have not already done so.
Sea Ltd (SE US): Placing Price Leaves Money on the Table
Sea Ltd (SE US): Placement a Good Opportunity to Enter an Attractive Story
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