- Sea's Shopee exit from India is a positive as it demonstrates management's strong capital discipline and reduces regulatory uncertainty given the ban of Free Fire India.
- In addition, India is highly competitive e-commerce market to compete in. Its exit enables Shopee to divert resources and investments into core markets of ASEAN, Taiwan and Brazil.
- Without the need for cash burn in India, this helps to reduce capital needs for Sea and improves the profitability and free cash flow profile of Sea.
- CEO Forrest Li motivated employees in a memo implying that Sea is in a good position fundamentally and positioned for future growth.
- Based on my SOTP valuation, my target price for Sea is $175, implying 49% upside potential from current levels.
For further details see:
Sea Limited: Exiting India, Entering Profitability