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].