In today’s briefing:
- Sea Ltd (SE US) – Reading the Positive Signals
- Sea Ltd: In Rough Seas
Sea Ltd (SE US) – Reading the Positive Signals
- Sea Ltd released a solid set of 1Q2022 results, with very strong YoY growth in e-commerce GAAP revenues, and a predictable softening of gaming revenues given greater mobility in 1Q2022.
- A key highlight was improving profitability with the adjusted EBITDA loss per order falling 70% in South-East Asia and Taiwan. Management also signalled that gaming revenues started stabilising end 1Q2022.
- Sea Ltd (SE US) saw a strong rally post these results given guidance was maintained albeit with a wider range. Sea Ltd is now trading at a discount to peers.
Sea Ltd: In Rough Seas
- Sea’s share price rose 14% yesterday after beating consensus revenue by 1.4%, but this seems unwarranted as Sea lowered the lower-end of the e-commerce revenue guidance by $400m to $8.5bn.
- Nonetheless, most of this price reaction could be short covering as Sea Ltd (SE US)’s results were rather disappointing on multiple fronts.
- With Free Fire faltering fast, we think Sea could get washed back to rough seas before reaching calm waters.
Before it’s here, it’s on Smartkarma
