Sea Limited - Revision history

>Christinachristidi: /* Market Share Breakdown */

2023-08-25T14:02:32Z

Market Share Breakdown

← Older revision		Revision as of 15:02, 25 August 2023
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	* Impact of widespread health developments, including the COVID-19 pandemic, and responses thereto (such as voluntary and mandatory quarantines, shut downs, restrictions on travel and activities, and availability of effective vaccines or treatments).		* Impact of widespread health developments, including the COVID-19 pandemic, and responses thereto (such as voluntary and mandatory quarantines, shut downs, restrictions on travel and activities, and availability of effective vaccines or treatments).
	* Impact of economies reopening further in response to the COVID-19 pandemic.		* Impact of economies reopening further in response to the COVID-19 pandemic.

	~~=== Market Share Breakdown ===~~

	== Financials ==		== Financials ==

>Christinachristidi: /* Valuation */

2023-08-25T13:38:14Z

Valuation

← Older revision		Revision as of 14:38, 25 August 2023
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	== Valuation ==		== 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~~. For~~ the ~~rest of growth rates~~, the average of previous years ~~was~~ used.		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"		{\| class="wikitable"
	!WACC		!WACC
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	\|		\|
	\|-		\|-
	\|Equity Value per Share		\|'''Equity Value per Share'''
	\|$ 33.83		\|'''$ 33.83'''
	\|		\|
	\|		\|
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	\|		\|
	\|-		\|-
	\|Current share price		\|'''Current share price'''
	\|$ 35.21		\|'''$ 35.21'''
	\|		\|
	\|		\|
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	\|		\|
	\|-		\|-
	\|Difference		\|'''Difference'''
	\| -3.9%		\| '''-3.9%'''
	\|		\|
	\|		\|

>Christinachristidi: /* Financial Forecasts */

2023-08-25T13:25:30Z

Financial Forecasts

← Older revision		Revision as of 14:25, 25 August 2023
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	\|}		\|}

	==== ~~All periods~~ ====		==== Last 5 years ====
	{\| class="wikitable"		{\| class="wikitable"
	! rowspan="2" \|Year		! rowspan="2" \|Year
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			Revenues and gross profit are steeply increasing, but after applying operating expenses, the company reports an increasing loss every year. This is attributed to disproportionate increase of operating expenses year by year, which outweigh the increase in revenues.

			Sea Limited's great investment in subsidies to local express delivery companies were one of the major operational expenses that kept Shopee, and by extension the entire company from being profitable until 2023.<ref>Here’s how Lazada lost its lead to Shopee in Southeast Asia (Part 2 of 2) \| KrASIA (kr-asia.com)</ref> However, based on the most recent results, operational expenses were significantly reduced, Garena's revenues declined, and the most promising and profitable branch is Shopee.


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	==== Method ====		==== Method ====
			The forecasted values for revenues and EBITDA were calculated using straight line forecasting. The growth rates used for revenues were retrieved from Yahoo Finance and CIQ as predicted by analysts, and for EBITDA the average growth rate of the previous years was used.

	==== Financial Forecasts ====		==== Financial Forecasts ====

	{\| class="wikitable"		{\| class="wikitable"
	! ~~rowspan="2" \|~~Year		!Year
	! ~~colspan="3" \|Revenue ($thousands)~~		!2014
	! ~~colspan="3" \|Gross Profit ($thousands)~~		!2015
			!2016
			!2017
			!2018
			!2019
			!2020
			!2021
			!2022
			!2023
			!2024
			!2025
			!2026
			!2027
	\|-		\|-
	~~!Forecast~~		\|'''Revenues'''
	!'''~~Lower-bound value~~'''		\|160.756
	~~!'''Upper-bound value'''~~		\|292.124
	~~!Forecast~~		\|345.67
	~~!'''Lower-bound value'''~~		\|414.19
	~~!'''Upper-bound value'''~~		\|826.968
			\|2175.378
			\|4375.664
			\|9955.19
			\|12449.71
			\|14317.16
			\|15748.88
			\|17323.76
			\|19056.14
			\|21914.56
	\|-		\|-
	\|~~2024~~		\|'''EBITDA'''
	\|~~15,744,835~~		\| -69.3
	\|~~13,081,969~~		\| -52.1
	\|~~18,407,702~~		\| -160.3
	~~\|6,489,624~~		\| -460.5
	\|5~~,187,205~~		\| -904.9
	\|~~7,792,042~~		\| -769.6
	\|-		\| -1122.6
	~~\|2025~~		\| -1304
	~~\|18,910,452~~		\| -704.2
	~~\|16,164,985~~		\|514.3483
	~~\|21,655,918~~		\|565.7832
	~~\|7,891,384~~		\|622.3615
	\|6~~,434,652~~		\|684.5976
	~~\|9,348,115~~		\|787.2873
	\|-
	~~\|2026~~
	~~\|22,076,068~~
	~~\|19,249,784~~
	~~\|24,902,353~~
	~~\|9,293,143~~
	~~\|7,696,416~~
	~~\|10,889,871~~
	\|-
	~~\|2027~~
	~~\|25,241,685~~
	~~\|22,336,213~~
	~~\|28,147,156~~
	~~\|10,694,903~~
	~~\|8,969,007~~
	~~\|12,420,799~~
	\|-
	\|~~2028~~
	~~\|28,407,301~~
	\|~~25,424,142~~
	~~\|31,390,460~~
	\|~~12,096,663~~
	\|~~10,250,152~~
	\|~~13,943,173~~
	\|}		\|}
	[[File:~~GProfit~~.png\|none\|thumb\|~~736x736px~~\|~~Gross profit historical~~ (~~2018~~-2022) and ~~forecasted~~ (2023-2027) ~~values~~ for Sea Limited]]		[[File:Revenuesf.png\|none\|thumb\|576x576px\|Revenues Historic (2014-2022) and Forecasted (2023-2027) Values for Sea Limited]]
			[[File:EBITDA.png\|none\|thumb\|573x573px\|EBITDA Historic (2014-2022) and Forecasted (2023-2027) Values for Sea Limited]]
	[[File:~~Revenues~~.png\|none\|thumb\|~~726x726px~~\|~~Revenue historical~~ (~~2018~~-2022) and ~~forecasted~~ (2023-2027) ~~values~~ for Sea Limited]]
	Revenues and gross profit are steeply increasing, but after applying operating expenses, the company reports an increasing loss every year. This is attributed to disproportionate increase of operating expenses year by year, which outweigh the increase in revenues.

	Sea Limited's great investment in subsidies to local express delivery companies were one of the major operational expenses that keep Shopee, and by extension the entire company from being profitable.<ref>Here’s how Lazada lost its lead to Shopee in Southeast Asia (Part 2 of 2) \| KrASIA (kr-asia.com)</ref>

	~~== Risk Analysis ==~~

	== Valuation ==		== Valuation ==

>Christinachristidi: /* Valuation */

2023-08-25T12:56:47Z

Valuation

Show changes

>Nayonika9: /* Subsidiaries */

2023-08-25T12:04:00Z

Subsidiaries

← Older revision		Revision as of 13:04, 25 August 2023
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	=== Subsidiaries ===		=== Subsidiaries ===
	Sea Limited, as mentioned, owns several subsidiaries including the digital entertainment company Garena, the e-commerce platform Shopee and the digital financial services company SeaMoney, therefore operating in 3 different markets. <ref>https://www.sea.com/products/garena</ref>		Sea Limited, as mentioned, owns several subsidiaries including the digital entertainment company Garena, the e-commerce platform Shopee and the digital financial services company SeaMoney, therefore operating in 3 different markets. <ref>[https://www.sea.com/products/garena https://www.sea.com/products/]</ref>

	==== Garena ====		==== Garena ====

>Christinachristidi: /* Most recent year */

2023-08-25T12:01:42Z

Most recent year

← Older revision		Revision as of 13:01, 25 August 2023
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	==== Most recent year ====		==== Most recent year ====
			The decreasing trend in Garena's revenues was evident from 2022, as the company saw a 10.25% decrease since 2021. However, there is steep growth both in the e-commerce and digital financial services sectors, which seems to become the company's main focus. There was a modest decrease in sales and marketing expenses (14.64%) but increase in administrative and R&D expenses, which led total operating expenses increasing by 21.79%. Nevertheless, the 33.1% increase in gross profit outweighed the higher operating expenses that led to a 18.86% decrease in the net loss.
	{\| class="wikitable"		{\| class="wikitable"
	!		!
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	==== Financial Forecasts ====		==== Financial Forecasts ====


	{\| class="wikitable"		{\| class="wikitable"

>Christinachristidi: /* Valuation */

2023-08-25T11:51:18Z

Valuation

Show changes

>Christinachristidi: /* Valuation */

2023-08-25T11:28:20Z

Valuation

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 |'''-931,199'''
 |'''330,983'''
-|'''135.50%'''
+|'''-135.50%'''
 |}
 ==== Most recent year ====
 ==== All periods ====
@@ Line 468: / Line 542: @@
 == Valuation ==
 == Appendix ==

>Nayonika9: /* Main streams of income */

2023-08-25T11:20:12Z

Main streams of income

← Older revision		Revision as of 12:20, 25 August 2023
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	=== Main streams of income ===		=== Main streams of income ===

			==== Garena ====
			Garena's primary income stems from various strategies linked to its online gaming platform:

			* In-Game Purchases: Garena's primary revenue stream arises from the in-game purchases. Gamers can purchase several features such as virtual items, skins, upgrades, and other in-game content using real money. These transactions enhance the gaming experience and allow players to personalize their gameplay.
			* Gaming Currency: Garena introduces its gaming currency, such as Garena Shells, purchasable by the aid of actual currency. These shells can then be employed to obtain in-game items across different games accessible on the platform.
			* Esports and Tournaments: Garena orchestrates esports tournaments and competitions for its games. Revenue is generated through sponsorships, ticket sales for live events, merchandise transactions, and broadcasting rights.

			==== Shopee ====
			Shopee generates its core revenue primarily through its e-commerce platform and related services:

			* Seller Fees: Shopee imposes charges on sellers for each transaction conducted on the platform. These charges are typically calculated as a percentage of the transaction's value.
			* Marketing and Promotions: Sellers have the option to utilize advertising and promotional functionalities on the platform to augment the visibility of their products. This action results in revenue accrual for Shopee.
			* Value-Added Offerings: Shopee provides supplementary services to sellers, encompassing premium store subscriptions, enhanced product listings, and fulfillment services. These provisions come at a certain expense and contribute to the overall revenue stream.


			'''SeaMoney'''

			SeaMoney garners its key revenue through digital financial services and transactions:

			* Funds Transfer Fees: SeaMoney generates income by imposing fees on various financial services, including money transfers, bill payments, and other digital transactions conducted through its platform.
			* Revenue from Financial Services: SeaMoney presents microloans and insurance products to individuals and small enterprises. The interest and charges tied to these offerings constitute a substantial portion of its revenue.
			* Mobile Wallet Charges: SeaMoney may levy charges for specific services within its mobile wallet platform, such as currency conversion or withdrawal fees.

	== Corporate Governance ==		== Corporate Governance ==

>Nayonika9: Sector

2023-08-25T11:10:09Z

Sector

← Older revision		Revision as of 12:10, 25 August 2023
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	==== Garena ====		==== Garena ====
			Garena is a renowned digital entertainment firm that is associated with the Sea Limited group. Garena, which was established in 2009, has quickly evolved to establish itself as a prominent participant in the gaming business throughout Southeast Asia as well as other countries. Garena is most recognized for creating and releasing captivating multiplayer games online for a wide range of users.

	==== Shopee ====		==== Shopee ====
			Shopee is a platform for e-commerce in the holdings of Sea Limited. Shopee, which was founded in 2015, has quickly grown to become one of the major marketplaces for online products and services in Southeast Asia along with additional regions. It offers a wide choice of items and services to consumers, as well as novel functions to improve the shopping experience while online.

	==== SeaMoney ====		==== SeaMoney ====
			SeaMoney is Sea Limited's electronic monetary services subsidiary, focused on offering unique financial assistance and products to individuals and companies throughout Southeast Asia. SeaMoney, which was founded to improve financial stability and convenience, has quickly risen to become a major participant in the region's electronic finance environment.

	=== Segments of operation ===		=== Segments of operation ===