Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Free Fire Firing on All Cylinders But Shopee Is Deprived of Marginal Profitability Gains

Sea Ltd Follow-On Offering: Asking Permission From Investors to Burn $4.0bn Per Year

Sea Ltd: Share Price Breaks Down as Free Fire Misfires

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<p>Singapore-based Internet company, <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>, released its 1Q21 results yesterday, which saw <a target="_blank">revenue increase by 147% YoY and 13% QoQ to $1,764m </a>(consensus $1,780m). The company’s operating loss increased 30.1% YoY and -2.5% QoQ to $348.4m, compared to the consensus operating loss estimate of $273.7m (an OPM of -19.8% compared to OPMs of -37.4%, -42.3%, -25.2% and -22.8% in 1Q20, 2Q20, 3Q20 and 4Q20 respectively).</p><p>Consensus projects the 2021 operating loss at $846m, but Sea’s first quarter loss alone was over 41% of the annual estimate. Deteriorating marginal profitability in e-commerce and the expansion of fintech is likely to put pressure on margins, making it difficult for Sea to meet 2021 profitability estimates. Meanwhile, Free Fire could run out of steam as it could be approaching maturity in the Brazil market.</p>

Singapore-based Internet company, Sea Ltd (SE US), released its 1Q21 results yesterday, which saw revenue increase by 147% YoY and 13% QoQ to $1,764m (consensus $1,780m). The company’s operating loss increased 30.1% YoY and -2.5% QoQ to $348.4m, compared to the consensus operating loss estimate of $273.7m (an OPM of -19.8% compared to OPMs of -37.4%, -42.3%, -25.2% and -22.8% in 1Q20, 2Q20, 3Q20 and 4Q20 respectively).Consensus projects the 2021 operating loss at $846m, but Sea’s first quarter loss alone was over 41% of the annual estimate. Deteriorating marginal profitability in e-commerce and the expansion of fintech is likely to put pressure on margins, making it difficult for Sea to meet 2021 profitability estimates. Meanwhile, Free Fire could run out of steam as it could be approaching maturity in the Brazil market.

Sea Ltd: Free Fire Could Run Out of Fire & Shopee’s Weakening Marginal Profitability