facebookDoes Sea Group still have any further upside left? - Seedly


19 May 2021



Does Sea Group still have any further upside left?

Sea Limited has just been confirmed to receive the digital banking license in Singapore.

Discussion (13)

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Hi there anon, I think overall there's still potential for Sea to grow.

The digital economy penetration in areas where Sea is operating remains very low, despite the acceleration of digitisation due to COVID-19. This gives the company huge growth opportunities.

I also penned my thoughts on Sea's latest 1Q 2021 results here if you are keen to know more.

Hope this helps in your investment research.

Yu Qi Tan

07 Dec 2020

Student Ambassador 21/22 at Seedly

I think personally, Sea group has been executing very well, and if you are a long term investor that views this business over the long run of 5 years or more, there is potential.

A little short summary of the company's profile:
It started with Garena first, which was a gaming platform that aimed to connect gamers around the world, with a primary focus on southeast asia. They started out by distributing third party games and soon, got the investment from Tencent, and a contract with the right of refusal for publishing games for Tencent. Then they created their own game which was free fire. The game has been a huge hit as seen from app annie rankings and on twitch as well.

In 2015 they started Shopee, an e-commerce marketplace platform that focused on the being mobile centric and targeting women's fashion products first. They have since been investing the profits from garena back into shopee on sales and marketing so as to grab market share from competitors. This has clearly been proven effective as they are the biggest e-commerce platform in southeast asia after 5 years, even outpacing competitors that entered the market earlier than them, such as Lazada and Bukalapak in Indonesia, as seen from google trends.

They have a payments business too, airpay where they operate e wallets and aims to push for digital payments. The digital payments is still a nascent business that is growing and the digital bank license definitely will help them to fuel their business.

The 3 businesses have very good synergies with one another and the total addressable market is huge as well. The management is strong on execution and have a long term view of their 3 businesses.

Mobile penetration rates across Southeast-asia is still low, and the total addressable market should grow as well as Southeast asia develops futher.

While the business has huge potential, there are certain risks as well such as over concentration of revenue from free fire, successful monetization of Shopee etc, and valuations are something to take note as well.
Hope it helps.

Disclaimer: I am not certified to give financial advice. Please do you own due diligence or research before investing. This is just my opinions and not a recommendation to do anything.

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Mr & Mrs Budget

07 Dec 2020

Author at Mr & Mrs Budget

We are long SE and have averaged up on SE over the past few months as we believe that they are just ...

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