Investment Rating - Maintains a "Buy" rating with a target price raised to $125 [7][9] Core Views - Sea's 3Q24 revenue reached $4.33 billion, up 30.8% YoY, surpassing market expectations by 6.4% [5] - Adjusted EBITDA for 3Q24 was $520 million, exceeding market expectations by 8.4% [5] - Adjusted net profit for 3Q24 was $330 million, 6.2% above market expectations [5] E-commerce Business - E-commerce revenue in 3Q24 was $3.18 billion, up 43% YoY, with core market revenue growing 49% and value-added services revenue up 29% [5] - GMV increased 25% YoY to $25.1 billion, with total orders up 24% to 2.8 billion [5] - Adjusted EBITDA for e-commerce turned positive at $34.5 million, with $30.9 million from Asia and $3.5 million from other markets [5] - The company maintains its full-year GMV growth guidance of around 25% [5] Digital Financial Services - Digital financial services revenue in 3Q24 was $620 million, up 38% YoY, driven by consumer and SME lending [6] - Loan principal increased 73% YoY to $4.6 billion, with a non-performing loan ratio improving to 1.2% [6] - Adjusted EBITDA for digital financial services was $190 million, up 13% YoY [6] Digital Entertainment - Digital entertainment revenue in 3Q24 was $500 million, down 16% YoY due to deferred revenue, but game revenue grew 24% YoY to $560 million [6] - Quarterly active users increased 16% YoY, and quarterly paying users grew 24% [6] - Adjusted EBITDA for digital entertainment was $310 million, up 34% YoY [6] - Free Fire remained the top-downloaded mobile game globally in 3Q24, with daily active users exceeding 100 million [6] Financial Projections - Revenue forecasts for 2024E and 2025E were raised to $16.3 billion and $18.9 billion, respectively [7] - Adjusted net profit for 2024E and 2025E is projected at $1.09 billion and $1.73 billion, respectively [8] - Adjusted target P/E ratios for 2024E, 2025E, and 2026E are 69.0x, 43.5x, and 31.9x, respectively [8] Valuation and Market Performance - The current stock price is $107.65, with a 52-week range of $34.35 to $117.52 [9] - The total market capitalization stands at $61.61 billion [9] - The stock has shown significant outperformance relative to the S&P 500 index over the past year [9]

Core Insights - Sea Limited (SE) reported adjusted earnings of 54 cents per share for Q3 2024, missing the Zacks Consensus Estimate by 8.47% and showing a significant increase from 6 cents in the same quarter last year [1] - The company’s revenues reached $4.3 billion, a year-over-year increase of 30.8%, surpassing the Zacks Consensus Estimate by 3.59% [2] Financial Performance - Digital Entertainment revenues were $497.8 million, reflecting a year-over-year decline of 15.9%, while quarterly active users increased by 15.5% to 628.5 million [3] - Total bookings in the Garena segment reached $556.5 million, marking a 24.3% year-over-year increase, driven by Free Fire [4] - E-commerce revenues totaled $3.4 billion, up 41.2% year over year, with gross orders rising 24.2% and GMV growing 25.2% [4] - Digital Financial Services revenues increased by 38% year over year to $615.7 million, supported by a loan book growth to $4.6 billion, up 73.2% [5] Operating Metrics - Gross profit increased by 29.1% year over year to $1.86 billion, with adjusted EBITDA reaching $521.3 million compared to $35.3 million in the previous year [7] - Digital Entertainment's adjusted EBITDA was $314.4 million, up 34.4% from $234 million in the year-ago quarter [7] - E-commerce adjusted EBITDA improved to $34.4 million from a loss of $346.5 million in the previous year [7] - Digital Financial Services adjusted EBITDA reached $187.9 million, a 13.4% increase from $165.7 million [8] Balance Sheet and Cash Flow - As of September 30, 2024, Sea Limited had cash and cash equivalents of $2.54 billion, a slight decrease from $2.64 billion as of June 30, 2024 [9] - The company generated $1.17 million in cash from operating activities in the reported quarter, up from $0.62 million in the previous quarter [9] Stock Performance - Following the Q3 2024 results, Sea Limited's shares jumped 10.46% to close at $107.65, with a year-to-date increase of 164.7%, significantly outperforming the Zacks Computer and Technology sector's rise of 29.5% [2]

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Investment Rating - The report maintains an "Outperform" rating for SEA (SE N) with a target price range of $133-136, implying a 24%-27% upside potential [4][14] Core Views - SEA's Q3 2024 results showed strong revenue and profit growth, driven by e-commerce and digital financial services, partially offset by a decline in gaming revenue [1][6] - The company achieved a net profit of $1 53 billion with a net margin of 4% in Q3 2024 [1][6] - E-commerce adjusted EBITDA turned positive at 1 1%, while gaming and digital financial services maintained high EBITDA margins of 63% and 31% respectively [1][6] E-commerce Business - E-commerce revenue grew 43% YoY to $3 2 billion in Q3 2024, driven by stable competition in Southeast Asia and improved monetization [1][9] - Gross Merchandise Value (GMV) increased 25% YoY, with core market revenue growing 49% and logistics-related value-added services revenue up 29% [1][9] - Adjusted EBITDA for e-commerce reached $34 million, marking a positive turnaround [1][9] Gaming Business - Gaming revenue declined 16% YoY to $500 million in Q3 2024, but adjusted EBITDA increased 34% YoY to $300 million [2][11] - Gaming gross bookings grew 24% YoY to $560 million, driven by strong performance of Free Fire [2][11] - Quarterly active users reached 630 million, up 16% YoY, while paying users increased 24% YoY to 50 million [2][12] Digital Financial Services - Digital financial services revenue grew 38% YoY to $620 million in Q3 2024, primarily driven by credit business [3][13] - Adjusted EBITDA for digital financial services was $190 million with a 31% margin [3][13] - Total loans receivable reached $4 6 billion, up 73% YoY, while the non-performing loan ratio (90+ days overdue) decreased to 1 2% [3][13] Financial Forecasts - Revenue forecasts for 2024-2026 were adjusted to $16 4/$18 9/$21 5 billion, reflecting improved e-commerce performance [14] - Net profit forecasts for 2024-2026 were revised to $479 million/$1 21 billion/$1 86 billion, indicating a strong turnaround and long-term profit potential [14] - The company is valued at 52x 2025E PE and 3 3x 2025E PS, with e-commerce, digital financial services, and digital entertainment valued at 40-42x, 25x, and 10x 2025E PE respectively [14]

Group 1 - The recent stock market rally has reached all-time highs, not only in the U.S. but also among overseas companies, indicating a broad-based recovery [1] - Companies are delivering impressive results during the Q3 earnings season, highlighting strong performance across various sectors [1] Group 2 - Sea has been identified as a notable winner in the recent earnings season, showcasing its strong market position and growth potential [1]

Financial Performance - Total GAAP revenue for Q3 2024 was US$4.3 billion, up 30.8% year-on-year from US$3.3 billion in Q3 2023[14] - Total net income for Q3 2024 was US$153.3 million, compared to a net loss of US$(144.0) million in Q3 2023[24] - Adjusted EBITDA for Q3 2024 was US$521.3 million, a significant increase from US$35.3 million in Q3 2023, representing a 1,377.5% year-on-year growth[12] - Total revenue for the nine months ended September 30, 2024, was $11,869,430, representing a 25.6% increase from $9,446,932 in the same period of 2023[39] - The company reported a net income of $210,235 for the nine months ended September 30, 2024, down from $274,297 in 2023, a decrease of 23.4%[39] - The net income for the consolidated entity in Q3 2024 was $153,324 thousand, compared to a net loss of $(143,978) thousand in Q3 2023, indicating a significant turnaround[47] User Metrics - Quarterly active users reached 628.5 million, up 15.5% year-on-year, while quarterly paying users increased by 23.9% to 50.2 million[11] - Gross orders for the quarter totaled 2.8 billion, reflecting a 24.2% year-on-year increase[6] Segment Performance - Shopee is on track for mid-twenties year-on-year GMV growth, with total GMV for the quarter at US$25.1 billion, increasing by 25.2% year-on-year[3] - Digital entertainment segment GAAP revenue was US$497.8 million, down 15.9% year-on-year, primarily due to increased deferred revenue[12] - Revenue for the digital commerce segment increased from $2,231,954 thousand in Q3 2023 to $3,183,558 thousand in Q3 2024, reflecting a growth of approximately 42.7%[47] - The digital financial services segment reported an operating income of $173,942 thousand in Q3 2024, compared to an operating income of $150,470 thousand in Q3 2023, indicating an increase of about 15.6%[47] - Adjusted EBITDA for the digital entertainment segment was $314,428 for the three months ended September 30, 2024, compared to $233,998 in the same period of 2023, an increase of 34.4%[37] Financial Position - Cash and cash equivalents as of September 30, 2024, were US$9.9 billion, a net increase of US$929.2 million from June 30, 2024[6] - Total assets increased to $21,691,690 as of September 30, 2024, from $18,883,232 as of December 31, 2023, reflecting a growth of 14.7%[41] - Total liabilities rose to $13,663,111 as of September 30, 2024, compared to $12,185,647 as of December 31, 2023, an increase of 12.1%[42] - The company’s cash and cash equivalents decreased to $2,538,749 as of September 30, 2024, from $2,811,056 as of December 31, 2023, a decline of 9.7%[41] - Total liabilities and shareholders' equity increased from $18,883,232 thousand as of September 30, 2023, to $21,691,690 thousand as of September 30, 2024, representing a rise of approximately 14.8%[43] Loan and Cash Flow Metrics - SeaMoney's loan book grew by over 70% year-on-year, with consumer and SME loans principal outstanding at US$4.6 billion, up 73.2% year-on-year[11] - Non-performing loans past due by more than 90 days were 1.2%, showing a slight improvement quarter-on-quarter[11] - Net cash generated from operating activities rose from $1,800,855 thousand for the nine months ended September 30, 2023, to $2,256,438 thousand for the same period in 2024, an increase of about 25.3%[44] - Net cash used in investing activities decreased from $4,755,908 thousand for the nine months ended September 30, 2023, to $3,279,780 thousand for the same period in 2024, a reduction of approximately 31.0%[44] Shareholder Metrics - Basic earnings per share decreased to $0.36 for the nine months ended September 30, 2024, down from $0.46 in 2023, a decline of 21.7%[39] - Total shareholders' equity increased from $6,697,585 thousand as of September 30, 2023, to $8,028,579 thousand as of September 30, 2024, representing a growth of approximately 19.9%[43] - The accumulated deficit improved from $(8,599,306) thousand as of September 30, 2023, to $(8,392,333) thousand as of September 30, 2024, showing a decrease of about 2.4%[43] Cash Flow and Non-Operating Income - Cash, cash equivalents, and restricted cash at the end of the period decreased slightly from $4,761,676 thousand as of September 30, 2023, to $4,266,252 thousand as of September 30, 2024[44] - Non-operating income, net, for the consolidated entity was $49,536 thousand in Q3 2024, compared to $45,875 thousand in Q3 2023, reflecting a modest increase of about 3.6%[47]

Key TakeawaysShopee parent Sea Limited reported strong sales from its e-commerce and financial services units, sending its U.S.-listed shares higher Tuesday. Sea's third-quarter revenue was up 30.8% from a year ago to $4.33 billion, exceeding forecasts.E-commerce sales jumped 42.6%, and financial services sales added 38%. Sea Limited's (SE) U.S.-listed shares jumped Tuesday after the Singapore-based company posted better-than-expected sales on strong demand for its e-commerce and financial services. The pa ...

Third Quarter 2024 Results November 2024 connectina the dots Disclaimer This presentation by Sea Limited ("Sea") contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "could," "will," "expect," "anticipate," "aim," "future," "intend," "plan," "believe," "estimate," "likely to," "potential," "confident," "guidance," and simi ...

Group 1 - The article recommends buying Sea Limited (NYSE: SE) stock, highlighting the growth of its e-commerce platform Shopee in Brazil [1] - The author has over 5 years of experience in equity analysis in Latin America, providing in-depth research and insights for informed investment decisions [1] Group 2 - No stock, option, or similar derivative positions are held by the author in any mentioned companies, nor are there plans to initiate such positions in the near future [2] - The article expresses the author's own opinions and is not influenced by compensation from any company [2]

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