Date: October 21, 2024
Broker Name: CGS International Securities
Company Overview
SEA Ltd (Stock Code: SIN) is a leading technology conglomerate based in Southeast Asia. The company operates in various sectors, with a strong focus on e-commerce through its platform, Shopee, and other digital services.
Positive Earnings Outlook for 3Q24
SEA Ltd is expected to report a positive set of results for the third quarter of 2024 (3Q24F). The company’s topline is likely to surpass consensus expectations, driven by significant growth in Shopee’s Gross Merchandise Volume (GMV) and an expanding take rate.
Market Dynamics and Competitive Landscape
The report highlights a rationalization of competition within the ASEAN e-commerce sector. Key points include:
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Fee Adjustments Across Markets:
ASEAN e-commerce players, including Shopee, have adjusted their fee structures across various markets during 3Q24. This indicates a stabilization of the competitive environment, which is seen as a positive sign for profitability.
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Priority on Topline Growth:
SEA Ltd continues to prioritize revenue growth for the second half of 2024 (2H24F). The rationalization of competition is expected to further boost Shopee’s margins in the fiscal year 2025 (FY25F).
Analyst Recommendation
The report maintains an “Add” recommendation for SEA Ltd, suggesting a positive outlook for the company’s stock. The target price has been raised to US$118, reflecting confidence in continued strong performance and market positioning.
