Investment Rating - The report maintains an "Outperform" rating for SEA (SE N) with a target price range of 133−136,implyinga241 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 32billioninQ32024,drivenbystablecompetitioninSoutheastAsiaandimprovedmonetization[1][9]−GrossMerchandiseValue(GMV)increased2534 million, marking a positive turnaround [1][9] Gaming Business - Gaming revenue declined 16% YoY to 500millioninQ32024,butadjustedEBITDAincreased34300 million [2][11] - Gaming gross bookings grew 24% YoY to 560million,drivenbystrongperformanceofFreeFire[2][11]−Quarterlyactiveusersreached630million,up16620 million in Q3 2024, primarily driven by credit business [3][13] - Adjusted EBITDA for digital financial services was 190millionwitha314 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 164/18 9/215billion,reflectingimprovede−commerceperformance[14]−Netprofitforecastsfor2024−2026wererevisedto479 million/121billion/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]
