Core Insights - Shopee achieved its first profitable year in 2024, reporting adjusted EBITDA of $156 million, marking a significant shift from previous loss-making years [3][15] - The company experienced a 33% growth in orders, a 28% increase in gross merchandise value, and a 38% surge in revenue, indicating a transition to a more balanced and sustainable growth model [3][4] - Shopee maintains a 48% market share in its operating region, confirming its leadership position in all seven Asian markets and a growing presence in Brazil [8][9] Performance and Strategy - Shopee's pivot from aggressive growth to a more sustainable model involved cost-cutting, exiting certain markets, and raising take rates, which initially impacted market share but has since led to profitability [4][5] - The company is focused on enhancing price competitiveness, improving service quality, and strengthening its content ecosystem to sustain growth momentum into 2025 [11] - Shopee Express, the company's in-house logistics, delivers around 50% of orders within two days, contributing to improved service and reduced logistics costs [12] Future Outlook - The live-streaming segment contributes approximately 15% to Shopee's overall order volume for physical goods, with potential for further growth through partnerships, such as with YouTube [13] - Shopee anticipates a gross merchandise value growth of around 20% in 2025, supported by ongoing improvements in customer experience and retention strategies [13]

Core Viewpoint - Sea Limited is a leading player in the digital economy with significant growth in e-commerce, digital financial services, and digital entertainment, showcasing strong revenue growth and profitability despite being below its all-time high stock price [1][2][10]. E-commerce Segment - Shopee, Sea's e-commerce platform, is the largest in Southeast Asia, with over 10.9 billion orders placed and $100.5 billion spent in the last year [3]. - The company has improved Shopee's efficiency, with nearly half of all orders delivered in two days or less, resulting in lower costs per order [4]. - Revenue from the e-commerce segment grew 41.3% to $3.7 billion in Q4 2024, contributing significantly to the overall revenue [9]. Digital Financial Services - SeaMoney, the digital financial services platform, had 26 million active users at the end of 2024, a 60% increase year-over-year, and a loan book that grew 64% to $5.1 billion [6]. - The platform offers merchant loans and buy now, pay later options, enhancing spending capabilities for both sellers and consumers [5]. Digital Entertainment - Sea's digital entertainment segment, led by the Garena game studio, saw 618 million quarterly active users in Q4 2024, a 16.9% increase from the previous year, but still below the 2021 peak of 725 million [7]. - Revenue from this segment increased by 1.6% to $519.1 million in Q4 2024, despite earlier declines [9]. Financial Performance - Sea generated $5.0 billion in total revenue in Q4 2024, marking a 36.9% year-over-year growth, the fastest rate in nearly three years [8]. - Total revenue for 2024 reached a record $16.8 billion, up 28.8%, with operating expenses increasing only 16.7% to $6.5 billion, allowing net income to grow 175% to $447.8 million [10][11]. - The company maintains a strong balance sheet with $10.4 billion in cash and equivalents, enabling further investment in growth [15]. Valuation and Market Position - Sea's price-to-sales (P/S) ratio has decreased to 4.9, a 47% discount to its average of 9.3 since going public, making the stock more attractive [14]. - Despite recent gains, the stock remains a value opportunity, supported by strong fundamentals and potential for further growth [16].

Core Viewpoint - The article discusses the investment position of Parkev Tatevosian, CFA, and mentions the involvement of The Motley Fool with Sea Limited, highlighting the potential for investment opportunities in the company [1]. Group 1 - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool has positions in and recommends Sea Limited, indicating a positive outlook on the company's prospects [1] - The Motley Fool has a disclosure policy regarding its investment recommendations [1]

Core Insights - Sea Limited's shares increased by 8% following a strong earnings report that exceeded sales expectations [1] - The company reported its second consecutive profitable year with significant improvements in its margin profile [2] Financial Performance - In Q4, Sea's revenue grew by 37%, gross profits increased by 45%, and net income margin improved from -3% to 5% [2] - SeaMoney, the finance unit, achieved a revenue increase of 55% while Shopee became profitable in both Asia and Brazil [3] Operational Success - Sea's digital entertainment division, Garena, saw a 17% growth in quarterly active users and a 19% increase in gross bookings [3] - The overall performance in 2024 marked a significant turnaround compared to the challenges faced in 2023, including layoffs and an unprofitable Shopee unit [4] Market Position - Sea's forward price-to-earnings (P/E) ratio stands at 36, which is lower than peers Shopify and MercadoLibre, with P/E ratios of 42 and 67 respectively [5] - The company is increasingly viewed as a growth stock, driven by its leading units Shopee and Garena, along with the rapidly growing SeaMoney segment [5]

Core Viewpoint - After experiencing layoffs and losses in previous years, Southeast Asian e-commerce platform Shopee has shown signs of recovery in 2024, with significant growth in its financial performance [1][2]. Financial Performance - In Q4 2024, Shopee generated revenue of $3.7 billion, a year-on-year increase of 41.3%, accounting for 74% of Sea's total revenue of $5 billion [3]. - For the entire year of 2024, Shopee's GMV surpassed $100 billion for the first time, growing by 28%, with total orders exceeding 10 billion. Shopee's revenue for 2024 reached $12.4 billion, also representing 74% of Sea's total revenue of $16.8 billion [3]. Market Share and Competition - Shopee's market share in Southeast Asia has declined from 40% in 2018 to approximately 30% currently, while TikTok's e-commerce share is around 15% and is expected to rise to 20% by 2025 [4][11]. - In Vietnam, TikTok Shop's market share exceeds two-thirds of Shopee's, and in Thailand, TikTok holds about 35% compared to Shopee's 55% [12]. Strategic Adjustments - To improve monetization, Shopee has increased commission and advertising revenue ratios, with Q4 advertising revenue growing over 50% year-on-year [7]. - Starting January 2024, Shopee gradually increased service fees by 1 percentage point, with a 2 percentage point increase in commission rates beginning in July 2024 [7]. Logistics and User Experience - Shopee's logistics service, Shopee Express (SPX), achieved nearly half of its Asian orders delivered within two days in Q4, reducing unit logistics costs by $0.05 [8]. - Approximately 90% of Shopee's orders are delivered by SPX, with logistics costs in Vietnam averaging around $0.45 per order [8]. Content Ecosystem and Live Streaming - Live streaming has become a significant part of Shopee's strategy, accounting for 15% of total orders in Southeast Asia, with a 40% and 30% year-on-year increase in daily active streamers and viewers, respectively [8]. - However, only about 20% of live streaming GMV is driven by content, indicating a reliance on discounts rather than user engagement [9]. Performance in Brazil - Shopee's sales in Brazil doubled in 2024, reaching approximately 600 billion Brazilian Reais (around $10.3 billion), which is twice the revenue of Amazon and 40% of Mercado Livre's [14]. - In Brazil, Shopee has achieved profitability, with over 40% year-on-year growth in monthly active buyers [15]. Future Outlook - Shopee anticipates a GMV growth of around 20% for the year 2025, indicating a cautious approach amid increasing competition in the overseas e-commerce landscape [18].

Investment Rating - The report maintains an "Outperform" rating for the company [3][5][14] Core Insights - The company's revenue for Q4 2024 reached $5 billion, representing a 37% year-over-year growth, primarily driven by e-commerce and digital financial services [1][8] - The net profit for the quarter was $2.4 million, with a net profit margin of 5% [1][8] - The adjusted EBITDA margins for e-commerce, gaming, and digital financial services were 4%, 56%, and 29% respectively, showing significant improvement compared to the previous year [1][8] E-commerce Business Summary - E-commerce revenue for Q4 2024 was $3.7 billion, up 41% year-over-year, attributed to a 24% increase in GMV and improved monetization rates [1][9] - The platform's monetization rate increased from 9.8% to 11.2% year-over-year, mainly driven by advertising monetization [1][9] - The company projects a 20% growth in e-commerce GMV for 2025, with continued improvement in profitability [1][9] Digital Financial Services Summary - Digital financial services generated $730 million in revenue for Q4 2024, a 55% increase year-over-year, mainly driven by credit services [2][13] - The adjusted EBITDA for this segment was $210 million, with a profit margin of 29% [2][13] - As of December 31, 2024, total receivables amounted to $5.1 billion, a 64% increase year-over-year, with a non-performing loan rate of 1.2% [2][13] Financial Forecast and Valuation - Revenue forecasts for 2025 and 2026 have been adjusted to $20.2 billion and $23.5 billion, respectively, reflecting a 6% and 9% increase [3][14] - The adjusted profit forecasts for 2025 and 2026 are $1.5 billion and $2.3 billion, with increases of 21% and 24% [3][14] - The target price has been revised to $150-$154, indicating an upside potential of 13%-16% [3][14]

Investment Rating - The report maintains a "Buy" rating for Sea (SE.US) and raises the target price to $165 [4][6]. Core Insights - The company's revenue for Q4 2024 reached $4.95 billion, representing a year-on-year growth of 36.9%, exceeding market expectations by 6.1% [2]. - The adjusted EBITDA for Q4 2024 was $590 million, with an adjusted EBITDA margin of 11.9% [2]. - The adjusted net profit for Q4 2024 was $410 million, with an adjusted net profit margin of 8.3% [2]. - The e-commerce segment showed profitability improvement, with a projected GMV growth rate of 20% for 2025 [2][4]. - Digital financial services revenue grew by 55.2% year-on-year in Q4 2024, driven primarily by credit business [3]. - Digital entertainment revenue turned positive with a 1.2% year-on-year increase in Q4 2024, and the company expects double-digit growth in 2025 [3]. Financial Performance Summary - For FY23, the company reported total revenue of $13.064 billion, with projections of $16.820 billion for FY24 and $20.854 billion for FY25 [5]. - The adjusted EBITDA is expected to grow at a compound annual growth rate (CAGR) of 35% from FY24 to FY27E [4]. - The net profit is projected to increase from $151 million in FY23 to $1.450 billion in FY25 [12]. Market Position and Valuation - The current stock price is $132.31, with a potential upside of 25% to the target price of $165 [7]. - The company has a total market capitalization of $75.726 billion [7]. - The report indicates that the e-commerce business's profitability improvement is expected to drive rapid profit growth for the company [4].

Investment Rating - The report maintains a "Buy" rating for Sea (SE.US) and raises the target price to $165 [4][6]. Core Insights - The company's revenue for Q4 2024 reached $4.95 billion, representing a year-on-year growth of 36.9%, exceeding market expectations by 6.1% [2]. - The adjusted EBITDA for Q4 2024 was $590 million, with an adjusted EBITDA margin of 11.9% [2]. - The adjusted net profit for Q4 2024 was $410 million, with an adjusted net profit margin of 8.3% [2]. - The e-commerce segment showed profitability improvement, with a projected GMV growth rate of 20% for 2025 [2][4]. - Digital financial services revenue grew by 55.2% year-on-year in Q4 2024, driven primarily by credit business [3]. - Digital entertainment revenue turned positive with a 1.2% year-on-year increase in Q4 2024, and the company expects double-digit growth in 2025 [3]. Financial Performance Summary - For FY23, the company reported total revenue of $13.064 billion, with projections of $16.820 billion for FY24 and $20.854 billion for FY25 [5]. - The adjusted EBITDA is expected to grow at a compound annual growth rate (CAGR) of 35% from FY24 to FY27E [4]. - The net profit is projected to increase from $151 million in FY23 to $1.450 billion in FY25 [12]. Market Position and Valuation - The current market price is $132.31, with a potential upside of 25% to the target price of $165 [7]. - The company has a total market capitalization of $75.726 billion [7]. - The report indicates that the company’s various business segments are maintaining strong growth trajectories, particularly in e-commerce and digital financial services [4].

Core Viewpoint - Sea's Q4 2024 financial results show strong growth across all three business segments, with total revenue reaching $4.95 billion, a 37% year-over-year increase, driven by e-commerce and digital financial services [1][2][3] Financial Overview - Total revenue for Q4 2024 was $4.95 billion, up from $3.45 billion in Q4 2022, marking a 37% year-over-year growth [1] - Adjusted EBITDA for Q4 2024 was $591 million, significantly up from $127 million in Q4 2023, indicating improved profitability [1] - For the full year 2024, total revenue reached $16.8 billion, a 29% increase from 2023 [1] E-commerce Performance - E-commerce segment (Shopee) achieved a GMV of over $100 billion in 2024, with Q4 GMV growing 23% year-over-year to $28.6 billion [2][5] - Q4 2024 GAAP revenue for e-commerce was $3.7 billion, with marketplace revenue contributing $3.2 billion, a 41% increase year-over-year [2] - Adjusted EBITDA for e-commerce in Q4 2024 was $152 million, recovering from a loss of $225 million in the same quarter of the previous year [2] Digital Financial Services - Digital financial services saw Q4 2024 GAAP revenue increase by 55% to $733 million, with full-year revenue reaching $2.4 billion, a 35% increase [3] - The total loan balance reached $5.1 billion by the end of 2024, a 64% year-over-year increase, indicating strong growth in consumer and SME lending [3] Digital Entertainment - Digital entertainment segment reported Q4 2024 bookings of $543 million, a 19% increase year-over-year, with full-year bookings at $2.1 billion [3] - Q4 2024 GAAP revenue for digital entertainment was $519 million, with adjusted EBITDA of $290 million for the quarter [3] Future Guidance - E-commerce is expected to see a 20% year-over-year GMV growth in 2025, with continued improvement in profitability [4] - The financial services segment anticipates significant loan balance growth, outpacing GMV growth [4] - The gaming segment is projected to achieve double-digit growth in both user numbers and revenue in 2025 [4] Management Insights - Company executives highlighted that all three business segments returned to strong double-digit growth, validating the company's strategic direction [4] - SeaMoney's loan book has surpassed $5 billion, making it one of the largest consumer lending businesses in Southeast Asia [4]

Core Insights - Sea Limited reported a revenue of $4.95 billion and earnings per share (EPS) of $0.39, surpassing analysts' expectations of $4.65 billion and $0.30 respectively [1][3] - The company achieved a net income turnaround of $237.6 million in Q4 2024, compared to a loss of $111.6 million in the same quarter last year, marking a significant improvement [2][3] Financial Performance - Revenue increased by 37% year over year, driven by strong performances in e-commerce and digital financial services [6] - Shopee's gross merchandise value (GMV) rose to $28.6 billion, a 23.5% increase [6] - SeaMoney's loan book size reached $5 billion, reflecting a 63.9% surge from the previous year [6] - Adjusted EBITDA for the quarter was $590.9 million, a 366% increase from $126.7 million in Q4 2023 [3] Business Overview - Sea Limited operates in digital entertainment, e-commerce, and digital financial services through its brands Garena, Shopee, and SeaMoney [4] - The company focuses on integrating these services to enhance user experience and support growth across segments [4] Strategic Focus - The company aims to maintain market leadership in Southeast Asia and pursue smart geographic diversification and strategic alliances [5] - Investments in artificial intelligence (AI) and logistics are crucial for addressing competitive pressures and enhancing operational efficiencies [9] Future Outlook - Management projects a 20% GMV growth for Shopee in 2025, with continued expansion in key markets such as Asia and Brazil [10] - SeaMoney's loan book is expected to grow faster than Shopee's, indicating strong demand for financial services [10] - Garena is anticipated to sustain double-digit growth in users and bookings [10]