ym80
2021-10-25
👍🏼
Sea Limited: Spreading Its E-Commerce Tentacles
免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。
分享至
微信
复制链接
精彩评论
我们需要你的真知灼见来填补这片空白
打开APP，发表看法
APP内打开
发表看法
1
2
{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":858729823,"tweetId":"858729823","gmtCreate":1635124086998,"gmtModify":1635124087237,"author":{"id":3582010679449465,"idStr":"3582010679449465","authorId":3582010679449465,"authorIdStr":"3582010679449465","name":"ym80","avatar":"https://static.tigerbbs.com/f75a7eda8cb8b79563386243750d3227","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":11,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>👍🏼</p></body></html>","htmlText":"<html><head></head><body><p>👍🏼</p></body></html>","text":"👍🏼","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/858729823","repostId":1108996887,"repostType":4,"repost":{"id":"1108996887","kind":"news","pubTimestamp":1635123946,"share":"https://www.laohu8.com/m/news/1108996887?lang=&edition=full","pubTime":"2021-10-25 09:05","market":"us","language":"en","title":"Sea Limited: Spreading Its E-Commerce Tentacles","url":"https://stock-news.laohu8.com/highlight/detail?id=1108996887","media":"Seeking Alpha","summary":"Summary\n\nSea Limited is the preeminent Internet company headquartered in Singapore. It has posted ga","content":"<p><b>Summary</b></p>\n<ul>\n <li>Sea Limited is the preeminent Internet company headquartered in Singapore. It has posted gangbusters growth over the past couple of years.</li>\n <li>The company continues to sharpen its edge in mobile gaming. It has also penetrated more markets beyond Southeast Asia.</li>\n <li>We discuss whether Sea stock still presents a reasonable opportunity to add for investors now.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/81d7d3e514cf6dfea7d8e68541eec1ca\" tg-width=\"1536\" tg-height=\"1025\" width=\"100%\" height=\"auto\"><span>franckreporter/E+ via Getty Images</span></p>\n<p><b>Investment Thesis</b></p>\n<p>Sea Limited (SE) is one of the highest conviction holdings in our growth portfolio. SE stock is one of those stocks that we have consistently added on significant dips previously. It has been a phenomenal outperformer for us over the last couple of years. We have never pared down our holdings and also added the stock at appropriate times.</p>\n<p>We have also covered the stock extensively. For investors who are new to Sea Limited, you can refer to our recent articles for a deeper dive:</p>\n<ul>\n <li>Is Sea Limited Stock A Good Buy For The Long-Term?</li>\n <li>MercadoLibre Vs. Sea Limited: Southeast Asia's Finest Takes On LatAm's E-Commerce Behemoth</li>\n <li>Sea Limited: Don't Underrate Garena's Tremendous Potential</li>\n</ul>\n<p>Without a doubt, Sea Limited does not qualify as a stock for value investors. The stock is trading at a premium valuation. It still reports negative last-twelve-months (LTM) GAAP EBITDA margins despite its massive growth. Some investors can argue that much of its valuation is predicated on its ability to execute its revenue growth excellently.</p>\n<p>Recently, its e-commerce arm, Shopee, expanded further on its penetration into LatAm. We also discussed previously how Shopee's penetration into MercadoLibre's (MELI) home ground has been shaping up. We thought its recent $6.3B capital raise was to help drive its aggressive growth into LatAm mainly. However, the company has other ideas. Shopee recently announced its forays into several key e-commerce markets. These include India, France, Spain, and Poland. These have also been important markets for Amazon (AMZN) and Alibaba (BABA). But, Sea Limited is never afraid of competing against strong incumbents. It unseated Lazada (BABA) on its way to claiming the throne in Southeast Asia. It has also been driving hard against MELI in LatAm.</p>\n<p>We discuss whether SE stock is a buy as it spreads its dominance across the world.</p>\n<p><b>SE Stock YTD Performance</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/612df62f4da522d7951f2b26c3013573\" tg-width=\"640\" tg-height=\"331\" width=\"100%\" height=\"auto\"><span>SE stock YTD performance (as of 22 October 21).</span></p>\n<p>SE stock has been on a phenomenal run in 2021 so far. It also suffered from the growth-to-value rotation earlier in the year. However, those dips proved to be transitory, as its upward momentum recovered swiftly. Ever since its last significant dip in May, the stock's momentum has been on a tear. The other minor dips have also proven to be opportunities for investors to add its stock. At the moment, its YTD return has reached 78.5%. It also easily outperformed its peers and the market. SE stock has proven to be an incredible winner against its more prominent peers.</p>\n<p><b>Taking Account of Shopee's Aggressive Expansion</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a0a42178971462228baa427dd13e8a50\" tg-width=\"640\" tg-height=\"395\" width=\"100%\" height=\"auto\"><span>Shopee quarterly GMV. Data source: Company filings</span></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a17b899e6e0ed296f07a8cd67524d8f6\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Shopee LTM GMV. Data source: Company filings</span></p>\n<p>Shopee has grown its gross merchandise value (GMV) very aggressively over the past year. At the end of 2020, it posted a GMV of $35.4B. By the end of H1'21, Shopee's LTM GMV reached $48.8B. Thus, its LTM GMV increased by an incredible 37.9% over 2 quarters. However, in our previous article (published on 13 August), we noted that Southeast Asia's top-6 countries' e-commerce GMV for 2020 was estimated at $62B. We also explained that even though the region is estimated to grow by a CAGR of 22.6% by 2025, its largest market, Indonesia, is estimated to experience slower growth. Indonesia's e-commerce market is estimated to grow by a CAGR of 19.1% through 2024.</p>\n<p>In contrast, LatAm is still expected to experience tremendous growth. Its e-commerce market is expected to grow by a CAGR of 28.1% through 2024, with Brazil and Mexico as the region's most important growth markets.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/42242d1e289df1eada6b2e729dc143a7\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>MELI LTM GMV. Data source: Company filings</span></p>\n<p>MercadoLibre, Inc. has also been expanding rapidly. Its LTM GMV in H1'21 grew by 22% from the end of FY20. It seems to be slower than SE's gangbusters growth momentum. Notwithstanding, its quarterly YoY GMV growth in FQ2'21 reached 39.2%. Hence, MELI's incredible growth momentum doesn't seem to be slowing down. It demonstrates the massive growth opportunities in LatAm's e-commerce market.</p>\n<p><b>Sea Limited Understands Its Markets Well Through Garena</b></p>\n<p>Sea Limited understands LatAm very well through its Garena gaming segment. Its Free Fire (FF) mobile battle-royale game has benefited tremendously from the removal of Fortnite from both the App Store (AAPL) and Google Play (GOOGL) (GOOG). Fortnite has previously been a keen competitor against Garena. With its exclusion from Apple's and Google's apps ecosystem for at least the next five years all but confirmed, Free Fire dominance is here to stay. Investors who don't understand gaming development well often consider FF's success as also its biggest challenge. It thinks FF will be replaced easily by other gaming genres or other games. But, the truth is top-performing games are tough to displace. They become even more entrenched as their users base increase. The barriers to entry to oust the top games are highly challenging. Beyond just the users base, top-quality games development also requires a long lead time.</p>\n<p>Sea Limited has often reminded investors that they think FF is still very early in its life cycle. Worldwide gaming leader Tencent (OTCPK:TCEHY) also emphasized the challenge in developing \"original IPs.\" Tencent emphasized:</p>\n<blockquote>\n Just one point to add, right. On the gaming side, I think you emphasized [the] point [of] new creation of IPs and true,\n <i>is many years before you can see final product.</i>I think if you look at our recent pipeline of games, which we have announced of more than 40 of them, I think it's a combination, right?\n <i>Some are original IPs, which would take a very long time to develop.</i>(from Tencent FQ1'21 earnings call)\n</blockquote>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f35c785ce1b4e95696380aa9383423a4\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Mobile games with the highest IAP from January to September 2021. Data source: AppMagic</span></p>\n<p>FF came in 8th in the ranking of mobile games with the highest in-app purchases (IAP) from January to September 2021. However, it's essential to consider that mobile games also have advertising revenue not covered in the IAP ranking.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/db273f87ece18ef3e95fd10a49e60e59\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Garena quarterly revenue. Data source: Company filings</span></p>\n<p>Garena's revenue surpassed $1.8B in H1'21. Therefore, investors can quickly glean the immense monetization capability of Sea Limited's gaming segment. Notably, Free Fire is very strong in Google Play.</p>\n<p>Based on statistics from Sensor Tower, FF ranked #3 in worldwide downloads in Q3'21. However, the large majority of it stemmed from Android users. The top three markets by downloads in Google Play have consistently been India, Brazil, and Indonesia. Therefore, investors can easily understand why Shopee is targeting LatAm so aggressively. Garena acts not just as a cash flow machine to sustain Shopee's aggressive expansion but also as a flywheel to extend its leadership. Sea Limited has astutely used Garena's leadership's growing influence and financial prowess to expand its ecosystem and sharpen its edge.</p>\n<p>Sensor Tower also highlighted that FF was the highest-grossing shooter game in Q3'21 worldwide. It easily outperformed Call of Duty: Mobile (ATVI) and Tencent's PUBG Mobile.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b839c373c6a45c5688b429a8ce803760\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Garena Average revenue per active user. Data source: Company filings</span></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/65e29f1027db894305ea59c0c24ad996\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Garena average revenue per paying user. Data source: Company filings</span></p>\n<p>We think investors who are bearish on Garena's prospects don't understand its monetization capabilities and opportunities well. As Garena exceeded $1B in its quarterly revenue, it has also improved its average revenue per user (both paying and active) remarkably. Thus, we can observe a consistent trend of enhanced monetization. Notably, the opportunities to monetize users who are not paying are tremendous. On a per active user basis, its average revenue was just $1.41 in FQ2'21. However, the figure jumped to $11.11 on a per-paying user basis. Therefore, there are massive growth opportunities just by converting users into paying users.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0a6778158bd4b839472d4755318891fb\" tg-width=\"640\" tg-height=\"396\" width=\"100%\" height=\"auto\"><span>Garena paying users ratio. Data source: Company filings</span></p>\n<p>That's precisely what Garena has been doing. The company has been consistently converting its non-paying users into paying ones. As a result, its paying users' ratio reached 12.7% at the latest FQ. We think the best is yet to come for Sea Limited's massive cash cow. There are still plenty of opportunities for Garena to milk its ever-popular FF game.</p>\n<p><b>So, is Sea Stock a Buy Now?</b></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/146f95a386f24736b4f64df978686494\" tg-width=\"640\" tg-height=\"384\" width=\"100%\" height=\"auto\"><span>Sea stock EV/NTM Rev valuation trend.</span></p>\n<p>Sea Stock is currently trading at an EV/NTM Rev of 16.2x. Compared to its 1Y mean of 15.9x, Sea stock may seem to be fairly valued now. Our members in the service have also added Sea stock at the recent September/October retracement. We saw the opportunity to add SE stock at a reasonable margin of safety. Therefore, our members already have a decent buffer from its current price as of now. If readers choose to add SE stock now, you should understand that you are adding it at fair value. Therefore, you might not have the margin of safety that we often espouse for high-growth stocks.</p>\n<p>Nevertheless, we are still optimistic about SE's long-term growth potential and<i>will rate the stock at Buy</i>.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Sea Limited: Spreading Its E-Commerce Tentacles</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSea Limited: Spreading Its E-Commerce Tentacles\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-10-25 09:05 GMT+8 <a href=https://seekingalpha.com/article/4461692-sea-limited-spreading-its-e-commerce-tentacles-is-sea-stock-a-buy><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nSea Limited is the preeminent Internet company headquartered in Singapore. It has posted gangbusters growth over the past couple of years.\nThe company continues to sharpen its edge in mobile ...</p>\n\n<a href=\"https://seekingalpha.com/article/4461692-sea-limited-spreading-its-e-commerce-tentacles-is-sea-stock-a-buy\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://seekingalpha.com/article/4461692-sea-limited-spreading-its-e-commerce-tentacles-is-sea-stock-a-buy","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1108996887","content_text":"Summary\n\nSea Limited is the preeminent Internet company headquartered in Singapore. It has posted gangbusters growth over the past couple of years.\nThe company continues to sharpen its edge in mobile gaming. It has also penetrated more markets beyond Southeast Asia.\nWe discuss whether Sea stock still presents a reasonable opportunity to add for investors now.\n\nfranckreporter/E+ via Getty Images\nInvestment Thesis\nSea Limited (SE) is one of the highest conviction holdings in our growth portfolio. SE stock is one of those stocks that we have consistently added on significant dips previously. It has been a phenomenal outperformer for us over the last couple of years. We have never pared down our holdings and also added the stock at appropriate times.\nWe have also covered the stock extensively. For investors who are new to Sea Limited, you can refer to our recent articles for a deeper dive:\n\nIs Sea Limited Stock A Good Buy For The Long-Term?\nMercadoLibre Vs. Sea Limited: Southeast Asia's Finest Takes On LatAm's E-Commerce Behemoth\nSea Limited: Don't Underrate Garena's Tremendous Potential\n\nWithout a doubt, Sea Limited does not qualify as a stock for value investors. The stock is trading at a premium valuation. It still reports negative last-twelve-months (LTM) GAAP EBITDA margins despite its massive growth. Some investors can argue that much of its valuation is predicated on its ability to execute its revenue growth excellently.\nRecently, its e-commerce arm, Shopee, expanded further on its penetration into LatAm. We also discussed previously how Shopee's penetration into MercadoLibre's (MELI) home ground has been shaping up. We thought its recent $6.3B capital raise was to help drive its aggressive growth into LatAm mainly. However, the company has other ideas. Shopee recently announced its forays into several key e-commerce markets. These include India, France, Spain, and Poland. These have also been important markets for Amazon (AMZN) and Alibaba (BABA). But, Sea Limited is never afraid of competing against strong incumbents. It unseated Lazada (BABA) on its way to claiming the throne in Southeast Asia. It has also been driving hard against MELI in LatAm.\nWe discuss whether SE stock is a buy as it spreads its dominance across the world.\nSE Stock YTD Performance\nSE stock YTD performance (as of 22 October 21).\nSE stock has been on a phenomenal run in 2021 so far. It also suffered from the growth-to-value rotation earlier in the year. However, those dips proved to be transitory, as its upward momentum recovered swiftly. Ever since its last significant dip in May, the stock's momentum has been on a tear. The other minor dips have also proven to be opportunities for investors to add its stock. At the moment, its YTD return has reached 78.5%. It also easily outperformed its peers and the market. SE stock has proven to be an incredible winner against its more prominent peers.\nTaking Account of Shopee's Aggressive Expansion\nShopee quarterly GMV. Data source: Company filings\nShopee LTM GMV. Data source: Company filings\nShopee has grown its gross merchandise value (GMV) very aggressively over the past year. At the end of 2020, it posted a GMV of $35.4B. By the end of H1'21, Shopee's LTM GMV reached $48.8B. Thus, its LTM GMV increased by an incredible 37.9% over 2 quarters. However, in our previous article (published on 13 August), we noted that Southeast Asia's top-6 countries' e-commerce GMV for 2020 was estimated at $62B. We also explained that even though the region is estimated to grow by a CAGR of 22.6% by 2025, its largest market, Indonesia, is estimated to experience slower growth. Indonesia's e-commerce market is estimated to grow by a CAGR of 19.1% through 2024.\nIn contrast, LatAm is still expected to experience tremendous growth. Its e-commerce market is expected to grow by a CAGR of 28.1% through 2024, with Brazil and Mexico as the region's most important growth markets.\nMELI LTM GMV. Data source: Company filings\nMercadoLibre, Inc. has also been expanding rapidly. Its LTM GMV in H1'21 grew by 22% from the end of FY20. It seems to be slower than SE's gangbusters growth momentum. Notwithstanding, its quarterly YoY GMV growth in FQ2'21 reached 39.2%. Hence, MELI's incredible growth momentum doesn't seem to be slowing down. It demonstrates the massive growth opportunities in LatAm's e-commerce market.\nSea Limited Understands Its Markets Well Through Garena\nSea Limited understands LatAm very well through its Garena gaming segment. Its Free Fire (FF) mobile battle-royale game has benefited tremendously from the removal of Fortnite from both the App Store (AAPL) and Google Play (GOOGL) (GOOG). Fortnite has previously been a keen competitor against Garena. With its exclusion from Apple's and Google's apps ecosystem for at least the next five years all but confirmed, Free Fire dominance is here to stay. Investors who don't understand gaming development well often consider FF's success as also its biggest challenge. It thinks FF will be replaced easily by other gaming genres or other games. But, the truth is top-performing games are tough to displace. They become even more entrenched as their users base increase. The barriers to entry to oust the top games are highly challenging. Beyond just the users base, top-quality games development also requires a long lead time.\nSea Limited has often reminded investors that they think FF is still very early in its life cycle. Worldwide gaming leader Tencent (OTCPK:TCEHY) also emphasized the challenge in developing \"original IPs.\" Tencent emphasized:\n\n Just one point to add, right. On the gaming side, I think you emphasized [the] point [of] new creation of IPs and true,\n is many years before you can see final product.I think if you look at our recent pipeline of games, which we have announced of more than 40 of them, I think it's a combination, right?\n Some are original IPs, which would take a very long time to develop.(from Tencent FQ1'21 earnings call)\n\nMobile games with the highest IAP from January to September 2021. Data source: AppMagic\nFF came in 8th in the ranking of mobile games with the highest in-app purchases (IAP) from January to September 2021. However, it's essential to consider that mobile games also have advertising revenue not covered in the IAP ranking.\nGarena quarterly revenue. Data source: Company filings\nGarena's revenue surpassed $1.8B in H1'21. Therefore, investors can quickly glean the immense monetization capability of Sea Limited's gaming segment. Notably, Free Fire is very strong in Google Play.\nBased on statistics from Sensor Tower, FF ranked #3 in worldwide downloads in Q3'21. However, the large majority of it stemmed from Android users. The top three markets by downloads in Google Play have consistently been India, Brazil, and Indonesia. Therefore, investors can easily understand why Shopee is targeting LatAm so aggressively. Garena acts not just as a cash flow machine to sustain Shopee's aggressive expansion but also as a flywheel to extend its leadership. Sea Limited has astutely used Garena's leadership's growing influence and financial prowess to expand its ecosystem and sharpen its edge.\nSensor Tower also highlighted that FF was the highest-grossing shooter game in Q3'21 worldwide. It easily outperformed Call of Duty: Mobile (ATVI) and Tencent's PUBG Mobile.\nGarena Average revenue per active user. Data source: Company filings\nGarena average revenue per paying user. Data source: Company filings\nWe think investors who are bearish on Garena's prospects don't understand its monetization capabilities and opportunities well. As Garena exceeded $1B in its quarterly revenue, it has also improved its average revenue per user (both paying and active) remarkably. Thus, we can observe a consistent trend of enhanced monetization. Notably, the opportunities to monetize users who are not paying are tremendous. On a per active user basis, its average revenue was just $1.41 in FQ2'21. However, the figure jumped to $11.11 on a per-paying user basis. Therefore, there are massive growth opportunities just by converting users into paying users.\nGarena paying users ratio. Data source: Company filings\nThat's precisely what Garena has been doing. The company has been consistently converting its non-paying users into paying ones. As a result, its paying users' ratio reached 12.7% at the latest FQ. We think the best is yet to come for Sea Limited's massive cash cow. There are still plenty of opportunities for Garena to milk its ever-popular FF game.\nSo, is Sea Stock a Buy Now?\nSea stock EV/NTM Rev valuation trend.\nSea Stock is currently trading at an EV/NTM Rev of 16.2x. Compared to its 1Y mean of 15.9x, Sea stock may seem to be fairly valued now. Our members in the service have also added Sea stock at the recent September/October retracement. We saw the opportunity to add SE stock at a reasonable margin of safety. Therefore, our members already have a decent buffer from its current price as of now. If readers choose to add SE stock now, you should understand that you are adding it at fair value. Therefore, you might not have the margin of safety that we often espouse for high-growth stocks.\nNevertheless, we are still optimistic about SE's long-term growth potential andwill rate the stock at Buy.","news_type":1},"isVote":1,"tweetType":1,"viewCount":390,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/858729823"}
精彩评论