Industry Rating - The industry investment rating is maintained at "Outperform" [1] Core Insights - High-growth companies in ride-hailing, digital freight, and instant delivery platforms are expected to deliver significant returns, with business volume and revenue growth around 20% and operating profits increasing substantially [3][4] - As competition stabilizes, operating leverage will lead to greater growth in operating profits, with companies like Manbang Group and Meituan projected to see substantial profit increases in 2024 [4][5] - The rising penetration rates in ride-hailing, digital freight, and instant delivery are expected to drive revenue and gross profit growth of approximately 30% for leading companies in 2024 [5] Summary by Sections Growth Logic - Revenue growth and declining expense ratios are key drivers for profit growth, with companies like Manbang Group benefiting from rapid revenue increases and improved monetization rates [14][17] - The report highlights that the faster the revenue growth and the quicker the expense ratio declines, the more significant the profit growth potential [16] High Growth in Leading Companies - In 2024, leading companies in ride-hailing, freight platforms, and instant delivery are expected to see high growth in operating profits, with Didi Chuxing turning profitable [19][23] - The operating profit growth rates for these companies are significantly higher than their gross profit growth rates, indicating effective cost management [23] Operating Leverage - The report notes that the increase in operating profit growth is due to a decrease in sales, management, and R&D expense ratios, showcasing the effect of operating leverage [28][31] - As leading companies solidify their market positions, their expense ratios are expected to stabilize, further enhancing profit margins [28][46] Revenue and Market Penetration - The revenue growth for leading companies is primarily driven by increases in business volume, with many companies outpacing industry growth rates [39][41] - The rising market penetration rates in various segments, such as ride-hailing and digital freight, are contributing to revenue growth exceeding overall market growth [44] Monetization Rates - Manbang Group's monetization rate is on the rise, which is expected to accelerate revenue growth compared to competitors whose monetization rates are stabilizing [49]

Industry Rating - The industry investment rating is maintained at "Outperform" [1] Core Insights - High-growth companies in ride-hailing, digital freight, and instant delivery platforms are expected to achieve revenue growth of around 20%, with operating profits increasing significantly. Companies like Manbang Group and Meituan are projected to have a PE ratio below 20 times in 2025, making them attractive investments [3] - As the competitive landscape stabilizes, stable sales, management, and R&D expenses are expected to lead to substantial growth in operating profits. Companies like Manbang Group, Meituan, and SF Express are anticipated to see their operating profits double in 2024, with continued rapid growth thereafter [4] - The rising penetration rates in ride-hailing, digital freight, and instant delivery are expected to drive revenue and gross profit growth of around 30% for companies like Manbang Group, Meituan, and SF Express in 2024. Manbang Group's monetization rate is expected to increase, leading to a gross profit growth rate of 42% in 2024 [5] Summary by Sections Growth Logic - The growth in profits is driven by revenue growth, market expansion, and decreasing expense ratios. Companies with faster revenue growth and declining expense ratios are likely to see quicker profit growth, particularly in the cross-city digital freight sector, where Manbang Group is expected to experience high profit growth [14][16][17] High Growth in Express Delivery, Ride-Hailing, and International Air Transport - In early 2025, most transportation modes are experiencing low growth in volume, while international air transport, express delivery, and ride-hailing are seeing faster growth [11] Head Companies' Profit Growth - In 2024, leading companies in ride-hailing, freight platforms, and instant delivery are expected to see high growth in operating profits, with Didi Chuxing turning profitable. The gross profits of these companies are also expected to grow, although at a slower rate than operating profits [23] Operating Leverage - The increase in operating profit growth is attributed to a decline in sales, management, and R&D expense ratios, which enhances operating profit margins. As leading companies solidify their positions, these expenses are expected to stabilize [28][31] Revenue Growth Driven by Business Volume - The revenue growth of leading companies is primarily driven by an increase in business volume, with many companies expected to outpace industry growth rates in 2024 [39][41] Market Penetration Rate Increase - The market penetration rates for various sectors are on the rise, leading to revenue growth that exceeds overall market growth. This trend is particularly evident in ride-hailing, digital freight, and instant delivery sectors [44] Monetization Rate - Manbang Group's monetization rate is significantly increasing, contributing to faster revenue growth compared to competitors like Uber and Didi Chuxing, whose monetization rates are stabilizing [49]

Core Viewpoint - Sea's Q4 2024 financial report shows strong growth and profit improvement in the e-commerce segment, but underlying operational indicators in gaming and financial sectors reveal potential risks [1][2][4]. E-commerce Segment - The GMV for Shopee reached $28.6 billion, a year-on-year increase of nearly 24%, significantly exceeding the market expectation of 18% [12][14]. - The order volume grew by 20% year-on-year, although it showed a sequential decline of 4 percentage points, while the average transaction value increased by 3% [13][14]. - Shopee's revenue grew by 41% year-on-year, surpassing the market expectation of 35% [14][25]. - The monetization rate for Shopee increased by only 0.1 percentage points, the smallest increase since Q4 2023, but the high-margin marketplace monetization rate rose by 0.4 percentage points [2][15]. Financial Services Segment - The outstanding loan balance for SeaMoney reached $5.1 billion, a 64% year-on-year increase, but below the expected $5.44 billion [17]. - Revenue from the financial services segment surged by 55% year-on-year, significantly exceeding the market expectation of 36% [17][24]. - The bad debt ratio remained stable at 1.2%, indicating steady credit quality [17]. Gaming Segment - Active users in the gaming segment decreased to approximately 620 million, with paying users at 50 million, both below market expectations [18][19]. - The average revenue per user declined by 6% year-on-year, contributing to a slowdown in revenue growth [19][20]. - Despite a 19% year-on-year revenue growth, the gaming segment's operational indicators suggest a weakening ecosystem [19][20]. Profitability and Expenses - The e-commerce segment achieved an operating profit of approximately $80 million, significantly above the expected $20 million, with an operating margin of 2.2% [23][24]. - The DFS financial segment reported an operating profit of $198 million, below the expected $230 million, with a profit margin of 27% [23][24]. - Overall, Sea's total revenue reached $4.95 billion, a 37% year-on-year increase, with a gross margin improvement from 43% to 45% [4][25][27]. - Total operating expenses increased by 19% year-on-year, with marketing expenses rising significantly, particularly in the gaming and financial segments [26][27]. Market Valuation and Future Outlook - The market currently values Sea at a PE ratio of over 30x for fiscal year 2026, reflecting expectations of continued profit growth of 20%-30% [7][8]. - The e-commerce segment's valuation is slightly below $50 billion, with expectations of achieving over $1.5 billion in adjusted EBITDA by 2026 [7][8]. - The financial services segment is seen as a potential undervalued growth area, with expectations of achieving around $1 billion in adjusted EBITDA by 2026 [8][9].