GRABW - Sea Limited: Beware The Illusions Of Growth

• Sea Limited has been one of the top sought-after pandemic plays. Both of its two engines - gaming and e-commerce - are key beneficiaries of the COVID-19 measures.
• The uniqueness of SE, the ability to leverage its cash cow gaming unit to grow new businesses, has seen investors flocking to it. But these dynamics have changed.
• The e-commerce unit's EBITDA is getting more negative by the quarter amid a shrinking GMV per order trend.
• The profit from Garena is already unable to cover the losses from the other units in the past quarters. If Garena falters, the ability to "subsidize" the e-commerce and fintech arms would diminish further.
• Analysts are projecting a persistent revenue growth slowdown in the coming quarters and years.

For further details see: