2024-05-17 11:36:48 ET
Summary
- Initially, concerns arose when Shopee increased its sales and marketing expenses, but Shopee exceeded expectations by accelerating revenue growth and improving operating losses through higher sales efficiency.
- Garena's decline in revenue is due to the company's revenue recognition practices. Bookings grew by 12.2% QOQ, indicating a re-acceleration in growth, driven by increased spending and recovery in QAU.
- SeaMoney's operating profit declined from 3Q23, as management increased investments in acquiring users.
- Balance sheet has improved substantially and SE is generating positive operating cash flow.
- Considering SE's improving fundamentals and resonable valuatoin, I've upgraded my rating from "hold" to a "buy"
Investment Thesis
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Sea Limited: Primed For market Share Expansion (Rating Upgrade)