In today’s briefing:
- Sea Ltd (SE US) – A Himalayan Saga
- Sea Ltd in Free Fall Following the Removal of Free Fire from The App Store & Google Play
- MCT and MNACT’s Options for Dealing with Quarz’s Campaign
Sea Ltd (SE US) – A Himalayan Saga
- The spotlight is back on Sea Ltd (SE US) after its game FreeFire was named as one of 54 apps of Chinese origin to be banned in India.
- The ban on FreeFire comes despite Sea Ltd‘s recent move to reduce the influence from Tencent by scaling back its ownership of voting shares
- We see the recent price weakness as an opportunity to accumulate Sea Ltd given the growth story remains intact although investors may not pay the same multiple premium over peers.
Sea Ltd in Free Fall Following the Removal of Free Fire from The App Store & Google Play
- Sea Ltd dropped 18% yesterday following India’s decision to ban its battle royale game, Free Fire and 53 other Chinese apps from the Google Play and App Store in India.
- India’s Free Fire ban could deliver a double whammy to Sea Ltd (SE US) with lower Digital Entertainment profitability limiting Sea’s ability to bankroll Shopee’s expansion.
- With the macro-outlook for growth stocks not looking great, we wouldn’t be surprised to see “Sea” breaking the bottom end of the EV/Sales range towards the end of the year.
MCT and MNACT’s Options for Dealing with Quarz’s Campaign
- Quarz Capital’s open letter urges Mapletree North Asia Commercial Trust (MAGIC SP)’s (MNACT) board to protect unitholders’ interest and negotiate for a higher offer from Mapletree Commercial Trust (MCT SP).
- MCT has three options – keep the terms unchanged, improve the terms or support MNACT’s board benchmarking the merger vs alternative transactions.
- MCT’s likely move is to keep terms unchanged and seek shareholder approval. MNACT’s board can appease unitholders by exploring alternative transactions.
Before it’s here, it’s on Smartkarma
