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Sea Limited
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== Valuation == A Discounted Cash Flow (DCF) model was used for Sea Limited's valuation. The yearly revenue growth rate values estimated by Yahoo Finance and CIQ were used to predict revenues until 2027, while for the expenses, the average rates of previous years were used. The full table for the FCF calculation can be found on the Appendix. {| class="wikitable" !WACC !LTM |- |'''Weights''' | |- |Total Debt |4262.053 |- |Market Cap |20026 |- |Total |24288.053 |- |Wd |18% |- |We |82% |- | | |- |'''Debt''' | |- |Total Debt |4262.053 |- |Interest Expense | -43.1 |- |Rate |1% |- |Effective Tax Rate |5% |- |Rd(1-t) |1.0% |- | | |- |'''Equity''' | |- |Risk Free Rate |4.2% |- |Beta |1.67 |- |Market Rate |10% |- |Re |13.9% |- | | |- |'''Discount Rate''' |'''11.60%''' |- |'''Perpetuity Growth Rate''' |'''2.0%''' |} {| class="wikitable" !Terminal Value ! |- |'''Perpetuity Growth''' | |- |FCFn | 1,665.98 |- |Growth Rate |2.0% |- |WACC |12% |- |PG Terminal Value | 17,698.7 |- | | |- |'''Exit Multiple''' | |- |EBITDA | - |- |EV/EBITDA Multiple | - |- |Exit Multiple TV | - |- | | |- |'''Average''' | ''' 17,698.7''' |} {| class="wikitable" !DCF ! !2023 !2024 !2025 !2026 !2027 !Terminal Value |- |FCF | | 1,088.4 | 1,197.3 | 1,317.0 | 1,448.7 | 1,666.0 | 17,698.7 |- |Net Present Value of FCF |4780.26 | | | | | | |- |Terminal Value | 17,698.69 | | | | | | |- |Present Value of TV |10223.39 | | | | | | |- |Enterprise Value |15003.65 | | | | | | |- |Net Debt | -1137.8 | | | | | | |- |Equity Value |16141.4 | | | | | | |- |Shares Out |477 | | | | | | |- |'''Equity Value per Share''' |'''$ 33.83''' | | | | | | |- |'''Current share price''' |'''$ 35.21''' | | | | | | |- |'''Difference''' | '''-3.9%''' | | | | | | |} {| class="wikitable" ! colspan="7" |Sensitivity Analysis |- | colspan="7" | '''Perpetuity Growth Rate''' |- | rowspan="8" |'''WACC''' |$33.83 |'''1.0%''' |'''1.5%''' |'''2.0%''' |'''2.5%''' |'''3.0%''' |- |'''10.0%''' |£37.17 |£38.73 |£40.48 |£42.47 |£44.74 |- |'''10.5%''' |£35.23 |£36.60 |£38.13 |£39.86 |£41.81 |- |'''11.0%''' |£33.49 |£34.70 |£36.05 |£37.55 |£39.24 |- |'''11.6%''' |£31.62 |£32.67 |'''£33.83''' |£35.12 |£36.56 |- |'''12.0%''' |£30.48 |£31.45 |£32.50 |£33.67 |£34.97 |- |'''12.5%''' |£29.18 |£30.04 |£30.98 |£32.02 |£33.17 |- |'''13.0%''' |£27.99 |£28.76 |£29.61 |£30.53 |£31.55 |}
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