- Since our first valuation of the stock, the price has gone up more than 20%. At that time, we considered the company to be fairly valued in the best scenario.
- Our approach now is similar but instead of stretching consensus, we rely on it and check what is the implied discount rate which delivers the current share price.
- We have tried to assess the most appropriate discount rate and we believe there is enough evidence of a current mismatch between current valuation and the appropriate discount rate.
- The main risks we see are the expectations around Garena and its embedded valuation and the regulatory risks on its marketplace which might lead to new taxes in SE markets.
For further details see:
Sea Limited: It's All About Expectations And Discount Rate