Summary
Sea Limited, together with its subsidiaries, engages in the digital entertainment, e-commerce, and digital financial service businesses in Southeast Asia, Latin America, rest of Asia, and internationally. It offers Garena digital entertainment platform for users to access mobile and PC online games, as well as eSports operations; and access to other entertainment content, including livestreaming of gameplay and social features, such as user chat and online forums. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payment and logistics infrastructure and seller services. In addition, it offers SeaMoney digital financial services to individuals and businesses, including offline and online mobile wallet, and payment processing services, as well as other offerings across credit, insurtech, and digital bank services under the ShopeePay, SPayLater, SeaBank, and other digital financial services brands; and payment processing services for Shopee. The company was formerly known as Garena Interactive Holding Limited and changed its name to Sea Limited in April 2017. Sea Limited was incorporated in 2009 and is headquartered in Singapore.
Strategy and Outlook
History
Sea Limited was founded in 2009, initially as Garena, by Singaporean entrepreneur Forrest Li.[1] The company was specialising in video game development, publishment and distribution. Through its platform, Garena+, it distributed major game titles across Taiwan and Southeast Asia including League of Legends in 2010[2], The platform Garena+ was launched in 2012
and by 2014 it was valued at $1bn and was named the biggest internet company in Singapore.[3] Am
Mission Statement
Marketing and growth strategy
Sector and Income Breakdown
Subsidiaries
Sea Limited, as mentioned, owns several subsidiaries including the digital entertainment company Garena, the e-commerce platform Shopee and the digital financial services company SeaMoney, therefore operating in 3 different markets. [4]
Garena
Shopee
SeaMoney
Segments of operation
Main streams of income
Corporate Governance
The Team
Ownership Structure
Market
Total Addressable Market
Key Market Drivers
Key Market Challenges and Risks
Financials
Historic
Most recent quarter
Most recent year
All periods
Year | Year end date | Income Statement | Balance Sheet | |
---|---|---|---|---|
Revenues($thousands) | Net losses ($thousands) | Total Assets($million) | ||
22 | 31/12/2018 | 826,968 | -961,241 | N/A |
23 | 31/12/2019 | 2,175,378 | -1,462,799 | 5,224,169 |
24 | 31/12/2020 | 4,375,664 | -1,618,056 | 10,455,671 |
25 | 31/12/2021 | 9,955,190 | -2,046,759 | 18,756,025 |
26 | 31/12/2022 | 12,449,705 | -1,651,421 | 17,002,796 |
Forward
Method
Financial Forecasts
Year | Revenue ($thousands) | Gross Profit ($thousands) | ||||
---|---|---|---|---|---|---|
Forecast | Lower-bound value | Upper-bound value | Forecast | Lower-bound value | Upper-bound value | |
2024 | 15,744,835 | 13,081,969 | 18,407,702 | 6,489,624 | 5,187,205 | 7,792,042 |
2025 | 18,910,452 | 16,164,985 | 21,655,918 | 7,891,384 | 6,434,652 | 9,348,115 |
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 |
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.
Risk Analysis
Valuation
Appendix
Income Statement
Year end date | 31/12/2022 | 31/12/2021 | 31/12/2020 | 31/12/2019 | 31/12/2018 |
---|---|---|---|---|---|
Total Revenue ($million) | 12,449,705 | 9,955,190 | 4,375,664 | 2,175,378 | 826,968 |
Cost of Revenue ($million) | -7,264,428 | -6,059,455 | -3,026,759 | -1,570,458 | -812,210 |
Gross Profit ($million) | 5,185,277 | 3,895,735 | 1,348,905 | 604,920 | 14,758 |
Operating Income/Expenses | |||||
Research and Development ($million) | -1,376,501 | -831,703 | -353,785 | -156,634 | -67,529 |
General and Admin. ($million) | -1,437,612 | -987,868 | -599,706 | -385,865 | -240,781 |
Sales and marketing ($million) | -3,269,223 | -3,829,743 | -1,830,875 | -969,543 | -705,015 |
Other Operating Income ($million) | 279,184 | 287,946 | 189,645 | 15,890 | 9,799 |
Provision for credit losses ($million) | -513,690 | -117,427 | -57,509 | -- | -- |
Goodwill ($million) | -354,943 | -- | -- | -- | -- |
Total operating expenses ($million) | -6,672,785 | -5,478,795 | -2,652,230 | -1,496,152 | -1,003,526 |
Operating Loss ($million) | -1,487,508 | -1,583,060 | -1,303,325 | -891,232 | -988,768 |
Interest income/expense and others* ($million) | -13,025 | -132,124 | -179,913 | -477,387 | 34,888 |
Earnings/Losses Before Tax ($million) | -1,500,533 | -1,715,184 | -1,483,238 | -1,368,619 | -953,880 |
Income Tax ($million) | -168,395 | -332,865 | -141,640 | -85,864 | -4,088 |
Share of results of equity investees ($million) | 11,156 | 5,019 | 721 | -3,239 | 3,066 |
Net loss ($million) | -1,657,772 | -2,043,030 | -1,624,157 | -1,457,722 | -961,034 |
Net income/loss attributable to non-controlling interests ($million) | 6,351 | -3,729 | 6,101 | -5,077 | -207 |
Net Loss Applicable to Common Shareholders ($million) | -1,651,421 | -2,046,759 | -1,618,056 | -1,462,799 | -961,241 |
Cash Flow Statement
Year end date | 31/12/2022 | 31/12/2021 | 31/12/2020 | 31/12/2019 | 31/12/2018 |
Net Income ($ thousands) | -1,657,772 | -2,043,030 | -1,624,157 | -1,457,722 | -961,034 |
Cash Flows-Operating Activities | |||||
Depreciation ($ thousands) | 428,344 | 279,032 | 169,067 | 116,783 | 54,902 |
Other Adjustments ($thousands)* | 1,543,364 | 696,427 | 484,793 | 628,741 | 38,100 |
Operating cash flows before changes in working capital ($ thousands) | 313,936 | -1,067,571 | -970,297 | -712,198 | -868,032 |
Changes in Operating Activities | |||||
Accounts Receivable ($ thousands) | 98,981 | -37,066 | -174,767 | -86,546 | -38,524 |
Accounts Payable ($ thousands) | 43,311 | 99,639 | 50,860 | 31,381 | 29,733 |
Changes in Inventories ($ thousands) | 1,441 | -62,735 | -38,528 | 11,762 | -28,465 |
Deferred revenue ($ thousands) | -1,093,229 | 314,048 | 1,162,399 | 637,214 | 204,161 |
Lease Liabilities ($ thousands) | 385,911 | 429,366 | 46,352 | 70,901 | -- |
Other Operating Activities ($ thousands) * | -492,107 | -534,603 | -490,448 | -594,847 | -662,125 |
Net Cash Flow-Operating ($ thousands) | -1,055,692 | 208,649 | 555,868 | 69,865 | -495,220 |
Cash Flows-Investing Activities | |||||
Capital Expenditures ($ thousands) | -924,178 | -772,177 | -336,274 | -239,844 | -177,343 |
Investments($ thousands) | -2,630,842 | -2,505,358 | -219,548 | -118,462 | -69,641 |
Other Investing Activities ($ thousands) | 1,126,211 | -489,738 | -331,090 | -4,913 | 22,456 |
Net Cash Flows-Investing ($ thousands) | -2,428,809 | -3,767,273 | -886,912 | -363,219 | -224,528 |
Cash Flows-Financing Activities | |||||
Proceeds from issuance of convertible notes ($ thousands) | -- | 2,846,250 | 1,141,362 | 1,138,500 | 564,938 |
Proceeds from issuance of shares ($ thousands) | 50,211 | 4,050,055 | 2,970,248 | 1,538,802 | 4,574 |
Net Borrowings ($ thousands) | -68238 | 114035 | -30609 | -2003 | -643 |
Other Financing Activities ($ thousands) | 418,283 | 391,249 | -347,869 | -95,704 | -22,241 |
Net Cash Flows-Financing ($ thousands) | 400,256 | 7,401,589 | 3,733,132 | 2,579,595 | 546,628 |
Effect of Exchange Rate ($million) | -143,511 | -58,218 | 80,727 | 25,025 | -12,546 |
Net Increase/Decrease in Cash Flow ($ thousands) | -3,227,756 | 3,784,747 | 3,482,815 | 2,311,266 | -185,666 |
Cash flow at beginning of year ($ thousands) | 10838140 | 7053393 | 3570578 | 1259312 | 1,444,978 |
Cash flow at end of year ($ thousands) | 7,610,384 | 10,838,140 | 7,053,393 | 3,570,578 | 1,259,312 |
Balance Sheet
Year end date | 31/12/2022 | 31/12/2021 | 31/12/2020 | 31/12/2019 |
---|---|---|---|---|
Current Assets | ||||
Cash and Cash Equivalents ($thousands) | 6,029,859 | 9,247,762 | 6,166,880 | 3,118,988 |
Short-Term Investments ($thousands) | 864,258 | 911,281 | 126,099 | 102,324 |
Net Receivables ($thousands) | 2322581 | 1,889,262 | 648,936 | 187,035 |
Inventory ($thousands) | 109,668 | 117,499 | 64,219 | 26,932 |
Other Current Assets ($thousands) | 3,361,646 | 2,969,593 | 1,932,870 | 974,860 |
Total Current Assets ($thousands) | 12,688,012 | 15,135,397 | 8,939,004 | 4,410,139 |
Long-Term Assets | ||||
Long-Term Investments ($thousands) | 1,253,593 | 1,052,861 | 190,482 | 113,797 |
Fixed Assets ($thousands) | 1,387,895 | 1,029,963 | 386,401 | 318,620 |
Goodwill ($thousands) | 230,208 | 539,624 | 216,278 | 30,952 |
Intangible Assets ($thousands) | 65,019 | 52,517 | 39,773 | 15,020 |
Other Assets ($thousands) | 1,132,843 | 841,908 | 583,829 | 265,301 |
Deferred Asset Charges ($thousands) | 245,226 | 103,755 | 99,904 | 70,340 |
Total Long-Term Assets ($thousands) | 4,314,784 | 3,620,628 | 1,516,667 | 814,030 |
Total Assets ($thousands) | 17,002,796 | 18,756,025 | 10,455,671 | 5,224,169 |
Current Liabilities | ||||
Accounts Payable ($thousands) | 258,648 | 213,580 | 121,637 | 69,370 |
Short-Term Debt / Current Portion of Long-Term Debt ($thousands) | 88,410 | 100,000 | -- | 1,258 |
Accrued expenses and other payables ($thousands) | 1,396,613 | 1,519,938 | 2,033,461 | 980,805 |
Escrow payables and advances from customers($thousands) | 1,862,325 | 1,789,973 | 161,379 | 65,062 |
Deferred revenue ($thousands) | 1,535,083 | 2,644,463 | 2,150,165 | 1,097,868 |
Other Current Liabilities ($thousands) | 1,794,613 | 908,482 | 169,425 | 148,003 |
Total Current Liabilities ($thousands) | 6,935,692 | 7,176,436 | 4,636,067 | 2,362,366 |
Long-term Liabilities | ||||
Accrued expenses and other payables ($thousands) | 87,072 | 76,234 | 36,159 | 25,802 |
Operating Lease Liabilities ($thousands) | 756,818 | 491,313 | 177,870 | 144,000 |
Other Liabilities ($thousands) | 107 | 107 | 107 | 1,334 |
Deferred Liability Charges ($thousands) | 73,533 | 111,818 | 344,823 | 161,683 |
Convertible notes ($thousands) | 3,338,750 | 3,475,708 | 1,840,406 | 1,356,332 |
Total long-term liabilities ($thousands) | 4,256,280 | 4,155,180 | 2,399,365 | 1,689,151 |
Total Liabilities ($thousands) | 11,191,972 | 11,331,616 | 7,035,432 | 4,051,517 |
Stock Holders Equity | ||||
Common Stocks ($thousands) | 281 | 278 | 225 | 230 |
Capital Surplus ($thousands) | 14,559,690 | 14,622,292 | 8,526,571 | 4,687,284 |
Statutory reserves ($thousands) | 12,490 | 6,144 | 2,363 | 46 |
Accumulated deficit ($thousands) | -8,745,541 | -7,201,498 | -5,150,958 | -3,530,585 |
Other Equity ($thousands) | -16,096 | -2,807 | 42,038 | 15,677 |
Total Equity ($thousands) | 5,810,824 | 7,424,409 | 3,420,239 | 1,172,652 |
Total Liabilities & Equity ($thousands) | 17,002,796 | 18,756,025 | 10,455,671 | 5,224,169 |
Financial Ratios
Year End Date | 2022 | 2021 | 2020 | 2019 | 2018 |
---|---|---|---|---|---|
Current Ratio | 183% | 211% | 193% | 187% | N/A |
Quick Ratio | 120% | 155% | 147% | 140% | N/A |
Cash Ratio | 87% | 129% | 133% | 132% | N/A |
Gross Margin | 42% | 39% | 31% | 28% | 2% |
Operating Margin | -12% | -16% | -30% | -41% | -120% |
Pre-Tax Margin | -12% | -17% | -34% | -63% | -115% |
Profit Margin | -13% | -21% | -37% | -67% | -116% |
Pre-Tax ROE | -100% | -45% | -78% | -382% | N/A |
After Tax ROE | -111% | -54% | -85% | -406% | N/A |
- ↑ Tech company Garena raises US$550m, rebrands as Sea | The Straits Times
- ↑ Garena Server: What Is It? | League Of Legends Official Amino (aminoapps.com)
- ↑ Valued at $1bn, Garena is Singapore’s biggest internet company (techinasia.com)
- ↑ https://www.sea.com/products/garena