Sea(SE) The Motley Fool·2025-02-27 12:45Core Viewpoint - Sea Limited has undergone a significant transformation, positioning itself for sustainable growth after experiencing a dramatic decline in stock price, with a recent recovery reflected in a 200% rise over the past year [2][10]. Business Model and Operations - Sea Limited operates a diversified three-pronged business model encompassing e-commerce (Shopee), gaming (Garena), and fintech (Sea Money), similar to major Chinese tech firms like Alibaba and Tencent [3][5]. - Shopee is a leading e-commerce platform in Southeast Asia, Taiwan, and Brazil, generating revenue through marketplace commissions, advertising, and transaction fees [4]. - Garena focuses on mobile game development and publishing, notably Free Fire, and collaborates with companies like Tencent for game distribution [5]. - Sea Money provides digital financial services, including mobile wallets and digital banking, leveraging Shopee's user base for growth [13]. Financial Performance and Strategy - Sea Limited's aggressive growth strategy led to significant revenue increases, with Shopee's revenue surging by 160% in 2020 and 136% in 2021 [7]. - The company faced challenges in 2022, necessitating cost rationalization and market exits, which ultimately resulted in a positive adjusted EBITDA of 4.3 billion and a net profit of 9.9 billion in cash and investments [10]. Future Growth Opportunities - Sea is well-positioned for continued growth, particularly in e-commerce, as online penetration increases in Southeast Asia and Brazil, with opportunities to enhance revenue through fees and advertising [12]. - Sea Money is expanding its financial services, having secured banking licenses in countries like Singapore and Indonesia to offer digital banking [13]. - Garena has shown signs of recovery, with bookings growing 24% in Q3 2024, indicating potential for future growth [14].