Key points
- Sea Limited is like Southeast Asia’s Amazon.com, Activision and Sofi rolled into one company.
- Sea Limited has achieved its first full year of profitability since its IPO in 2017.
- Sea Limited ended 2023 with $8.5 billion in cash and cash equivalents.
- 5 titles we prefer to SEA
Limited sea NYSE: SEA is a Singapore-based consumer internet technology conglomerate that operates across three major digital segments, which include gaming, e-commerce and financial services. The company serves the cyclical consumer sector in Southeast Asia, Taiwan and Latin America. Sea started out as online video game publisher, Garena, with its popular mobile battle royale game, Free Fire. Garena has evolved into a leading eSports organizer, providing a digital entertainment platform that allows users to access its online games for mobile devices and PCs.
The company also operates Shopee, which is Southeast Asia’s largest e-commerce platform with over 343 million. Its SeaMoney division offers digital banking and financial services. Together, the company achieves a network and cumulative effect by selling its services to a growing base of consumers in Southeast Asia. Obtain AI-powered insights on MarketBeat.
One-stop digital store
The sea is like Amazon.com Inc. NASDAQ: AMZN, Activision Blizzard Inc. NASDAQ: ATVI AND Sofi Technologies Inc. NASDAQ: SOFI of Southeast Asia. Its scale is enormous and it has a dominant market share in every division. SeaMoney offers financial services from mobile wallet, payment processing, insurance and lending to buy-now-pay-later (BNPL) services under its financial services brands SPayLater, SeaBank and SeaInsure. Its value proposition lies in offering affordable, accessible and reliable digital solutions to consumers and businesses.
The company delivered a solid year-end earnings report
On March 4, 2024, Sea Limited reported fourth quarter 2023 earnings for the quarter ending December 31, 2023. The company reported a loss of 19 cents as revenue grew 5.7% year over year to 3.62 billion dollars compared to consensus estimates of $3.57 billion. Total gross profit was $1.5 billion and net loss was $111.6 million. Total adjusted EBITDA was $126.7 million. The company ended the quarter with $8.5 billion in cash and cash equivalents.
Segment performance in the fourth quarter of 2023
Shopee GAAP revenue grew 23.2% year over year to $2.6 billion. The market’s core revenues, consisting primarily of transaction-based fees and advertising revenues, grew 40.6% year-over-year to $1.6 billion. Adjusted EBITDA was a loss of $225.3 million. Gross orders grew 46% year-on-year to 2.5 billion. Gross merchandise value (GMV) grew 28.6% year over year to $23.1 billion.
SeaMoney’s GAAP revenue increased 24.3% to $472.4 million. Adjusted EBITDA was $148.5 million, up 96.4% year over year. Garena’s GAAP revenues were $510.8 million. Bookings were $456.3 million. Adjusted EBITDA was $217.4 million. Adjusted EBITDA was 47.6% of bookings. Quarterly active users were 528.7 million. Quarterly paying users were 39.7 million. The average bookings per user was 86 cents.
The company has reached a key milestone in terms of profitability
Sea Limited has achieved its first full year of profitability since its IPO. Total GAAP revenue increased 4.9% year-over-year to $13.1 billion. Gross profits increased 12.5% year over year to $5.8 billion. Total net income was $163.7 million. Total adjusted EBITDA was $1.2 billion. Obtain AI-powered insights on MarketBeat.
CEO Insights
Forrest Li, CEO of Sea Limited, reiterated the milestone of achieving its first full year of profitability since its IPO in 2017. Shopee opened five new fulfillment centers and 385 new first- and last-mile hubs across Asia. This expands its logistics network, which today is one of the most extensive and efficient in Southeast Asia. Free Fire has been the most downloaded mobile game globally and the positive trend continues into 2024. Free Fire has reached more than 100 million peak daily active users and remains one of the largest mobile games in the world.
Li commented: “In 2023, we achieved profitability, strengthened our market leadership for our e-commerce business, grew our digital financial services business and stabilized the performance of our digital entertainment business.” He concluded: “We emerged with a much stronger balance sheet, with our liquidity increasing to $8.5 billion at the end of 2023, demonstrating the discipline and prudence we have applied in our investments over the past year. Looking ahead future, we expect 2024 will be another profitable year.”
SEA stock gets an analyst upgrade
JP Morgan upgraded the SEA from Neutral to Overweight, raising the price target to $70 from $43. Analyst Ranjan Sharma believes Sea will continue to increase commissions and reduce marketing and sales expenses, pointing out that Shopee has increased digital mall commissions by 400 basis points in Malaysia. High acquisition rates could lead to earnings volatility due to the competitive environment. Sharma noted that high acquisition rates, the percentage of sales retained by Sea, can increase the propensity of sellers to seek out cheaper alternative platforms.
Analyst ratings and price targets for Sea Limited I’m on MarketBeat. The titles of Sea Limited’s competitors and competitors can be found with MarketBeat Stock Screener.
Daily mug template
The daily candlestick chart on SE illustrates a cup pattern. The cup lip line formed at $58.80 on August 11, 2023, before the stock plummeted to a low of $34.35 on January 17, 2024. SE staged an upward rally through the gap level fill of $45.60 and pushed higher through the $55.72 gap fill level on the Q4 2023 earnings release as it retested the cup lips line. The daily relative strength index (RSI) rose to the 90 band before peaking and falling back towards the 70 band. Pullback support levels are at $51.34, $45.60, $41.60 and $38.10.
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