摩根士丹利分析师Divya Gangahar Kothiyal在一份报告中写道： “Sea 在东盟的表现稳健，盈利增长的执行情况不断改善。”她表示，该地区电子商务的竞争一直很稳定，而 Sea 还从其巴西和直播业务以及更高的商家佣金中获得了提振。Southeast Asian technology company Sea Ltd (SE.US) has regained profits in the e-commerce sector, making analysts more optimistic about its stock price. Its market value has risen by 43 billion dollars so far this year.
The Zhitong Finance App notes that Southeast Asian technology company Sea Ltd (SE.US) has regained profits in the e-commerce sector, making analysts more optimistic about its stock price. So far this year, its market value has risen by 43 billion US dollars. Since Sea announced earnings reports at the beginning of this month, seven investment banks, including Morgan Stanley and Deutsche Bank, have raised their target prices. The market generally believes that the company's stock will rise another 7% over the next 12 months.
Analysts expect Sea's adjusted profit to nearly triple this year and achieve similar growth again in 2025. Sea's latest quarterly results show that the company successfully withstood the impact of e-commerce competitors, while its gaming business was also strong.
Morgan Stanley analyst Divya Gangahar Kothiyal wrote in a report: “Sea's performance in ASEAN is steady, and the implementation of profit growth continues to improve.” She said e-commerce competition in the region has been stable, and Sea has also received a boost from its Brazilian and live streaming businesses and higher merchant commissions.
Sea outperforms other companies in Singapore's MSCI Index
Sea's American Depositary Receipts (ADR) rose 186% this year, surpassing the MSCI Singapore Index, which mainly consists of locally listed stocks. The rise in stock prices has pushed valuations to expensive levels, putting pressure on Sea to announce good results.
The analysts' expectations were truly impressive, with their average price target rising 21% since the earnings report was released. Anxiety has also abated in the options market, and the cost of Sea hedging declined after soaring in August.
Bloomberg Intelligence analyst Nathan Naidu wrote in a report: “As the game distribution business recovers and e-commerce division Shopee's profitability increases, Sea's profits will expand further.” He added that future catalysts include gaming partnerships with Tencent, internal e-commerce logistics, and more loans to high-quality borrowers in the fintech sector.
Even though Sea's ADR has risen sharply recently, it's still down nearly 70% from the peak driven by the pandemic in 2021. In addition to concerns about e-commerce profitability, Sea's gaming business is also thought to be overly dependent on the established hit game “Free Fire,” which was first released in 2017.
These concerns have also been allayed to a certain extent. Deutsche Bank analyst Peter Milliken wrote in a report that “Free Fire” experienced at least a temporary “recovery,” while management emphasized the progress of the new game during the earnings call.
Milliken said, “Sea has succeeded in its efforts to maintain or increase market share while focusing on profitability on the other. Importantly, the company is no longer a gaming company that funds other growing businesses, but is transforming into a company with three profitable divisions.”
