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2021-12-10

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3 Things About Sea Limited That Smart Investors Know<blockquote>精明投资者了解的关于 Sea Limited 的 3 件事</blockquote>

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":605362594,"tweetId":"605362594","gmtCreate":1639116083442,"gmtModify":1639116083655,"author":{"id":3580043263355101,"idStr":"3580043263355101","authorId":3580043263355101,"authorIdStr":"3580043263355101","name":"Dazz","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":12,"crmLevelSwitch":0,"individualDisplayBadges":[],"wearingBadges":[],"fanSize":19,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","extraTitle":"","html":"<html><head></head><body>Great sharing!</body></html>","htmlText":"<html><head></head><body>Great sharing!</body></html>","text":"Great sharing!","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/605362594","repostId":1195107888,"repostType":4,"repost":{"id":"1195107888","kind":"news","pubTimestamp":1639113421,"share":"https://www.laohunote.com/m/news/1195107888?lang=zh_CN&edition=full","pubTime":"2021-12-10 13:17","market":"us","language":"en","title":"3 Things About Sea Limited That Smart Investors Know<blockquote>精明投资者了解的关于 Sea Limited 的 3 件事</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1195107888","media":"Motley Fool","summary":"Most investors likely know three things about Sea Limited(NYSE:SE): that it owns Shopee, the top e-c","content":"Most investors likely know three things about&nbsp;Sea Limited(NYSE:SE): that it owns Shopee, the top e-commerce player in Southeast Asia and Taiwan; that it owns the mobile game publisher Garena; and that it is deeply unprofitable.<blockquote>大多数投资者可能知道三件事海有限公司（纽约证券交易所股票代码：SE）：其拥有东南亚和台湾顶级电子商务公司 Shopee；它拥有手机游戏发行商 Garena；而且完全无利可图。</blockquote> But this tech company is actually fairly complex, and to better understand its sprawling business, it's worth examining three finer points about it that garner a lot less attention: its dependence on&nbsp;Free Fire;&nbsp;its expansion plans in Latin America; and the growth of its fintech ecosystem.<blockquote>但这家科技公司实际上相当复杂，为了更好地了解其庞大的业务，值得研究一下它的三个较少受到关注的细节：它对自由射击；其在拉丁美洲的扩张计划；及其金融科技生态系统的增长。</blockquote> 1.Free Fire&nbsp;is the wind in Sea's sails<blockquote>1.自由射击风在大海的帆上吗</blockquote> Four years ago, Garena launched&nbsp;Free Fire, its first self-developed mobile game. The battle royale title, which was optimized for lower-end devices, quickly became one of the most popular mobile games in Southeast Asia and Latin America, and was the most-downloaded mobile game in the world in both 2019 and 2020, according to App Annie.<blockquote>四年前，Garena 推出自由射击，其首款自主研发的手机游戏。根据App Annie的数据，这款针对低端设备优化的大逃杀游戏迅速成为东南亚和拉丁美洲最受欢迎的手机游戏之一，并在2019年和2020年都是全球下载量最高的手机游戏。</blockquote> Free Fire'ssuccess significantly boosted Garena's margins, since it wasn't a licensed game like the publisher's earlier titles. As a result, Sea's digital entertainment segment (which houses Garena) started to generate even stronger adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth -- a sharp contrast to the company's e-commerce segment, which has been growing more unprofitable.<img src=\"https://static.tigerbbs.com/62a40cb0cfc26f2711593eeadadb17b1\" tg-width=\"794\" tg-height=\"200\" width=\"100%\" height=\"auto\">Therefore, Sea clearly needs&nbsp;Free Fire&nbsp;to keep generating that higher-margin revenue to subsidize the expansion of the Shopee e-commerce platform. That's a hefty burden to place on a 4-year-old mobile game.<blockquote>自由射击成功大大提高了Garena的利润率，因为它不像该发行商早期的游戏那样是一款授权游戏。因此，Sea 的数字娱乐部门（拥有 Garena）开始产生更强劲的息税折旧摊销前调整后利润 (EBITDA) 增长——与该公司的电子商务部门形成鲜明对比，后者一直在增长无利可图。因此，Sea显然需要自由射击继续产生更高利润率的收入，以补贴 Shopee 电子商务平台的扩张。这对一个4岁的手机游戏来说是一个沉重的负担。</blockquote> Looking ahead, Garena's top priorities will be to maintain&nbsp;Free Fire'smomentum, expand the franchise with new versions (likeFree Fire MAXfor higher-end devices), and launch more self-developed titles. Failing to achieve any of those goals could cause Sea's adjusted EBITDA to plummet.<blockquote>展望未来，Garena 的首要任务将是维持自由射击势头，用新版本扩展特许经营权（如自由射击最大值面向高端设备），并推出更多自主研发的游戏。未能实现这些目标中的任何一个都可能导致 Sea 调整后的 EBITDA 暴跌。</blockquote> 2. Shopee is gaining ground fast in Latin America<blockquote>2. Shopee在拉丁美洲迅速崛起</blockquote> When Shopee expanded into Brazil two years ago, skeptics predicted that it would be crushed by&nbsp;MercadoLibre(NASDAQ:MELI), the&nbsp;800-pound gorilla&nbsp;of Latin American e-commerce. However, Shopee launched aggressive marketing campaigns, offered steep discounts, and expanded into other Latin American markets.<blockquote>两年前，当 Shopee 扩展到巴西时，怀疑论者预测它会被压垮自由市场（纳斯达克股票代码：MELI），拉丁美洲电子商务界800磅重的大猩猩。然而，Shopee 发起了积极的营销活动，提供大幅折扣，并扩展到其他拉丁美洲市场。</blockquote> As a result, Shopee actually overtook MercadoLibre as the most-downloaded shopping app in Latin America earlier this year. By the end of August, Shopee's monthly active users (MAUs) in Latin America had risen 136% year over year to more than 30 million, according to Apptopia. MercadoLibre ended last quarter with 78.7 million unique active users.<blockquote>因此，今年早些时候，Shopee 实际上已经超过 MercadoLibre，成为拉丁美洲下载量最高的购物应用程序。根据 Apptopia 的数据，截至 8 月底，Shopee 在拉丁美洲的月活跃用户 (MAU) 同比增长 136%，超过 3000 万。MercadoLibre 上季度末拥有 7870 万独立活跃用户。</blockquote> Sea doesn't break out its Latin American results yet, but it's likely still racking up big losses as it expands through MercadoLibre's backyard. Last quarter, Sea said Shopee's adjusted EBITDA loss of $0.41 per order remained unchanged sequentially and year over year across all of its markets -- but narrowed by both metrics in its core Southeast Asia and Taiwan market.<blockquote>Sea 尚未公布其拉丁美洲业绩，但随着其通过 MercadoLibre 的后院扩张，它可能仍会遭受巨大损失。上个季度，Sea 表示，Shopee 所有市场的调整后 EBITDA 亏损为每订单 0.41 美元，环比和同比保持不变，但其核心东南亚和台湾市场的两项指标均有所收窄。</blockquote> In other words, Sea needs to continue narrowing Shopee's losses in Southeast Asia and Taiwan -- all while maintaining&nbsp;Free Fire'sgrowth -- to stabilize its adjusted EBITDA as it expands its massive ecosystem.<blockquote>换句话说，Sea 需要继续缩小 Shopee 在东南亚和台湾的损失，同时维持自由射击增长——随着其庞大生态系统的扩张，稳定调整后的 EBITDA。</blockquote> 3. Sea Limited is evolving into a digital bank<blockquote>3. Sea Limited 正在发展成为一家数字银行</blockquote> Shopee isn't Sea's only unprofitable business. Its digital financial services segment, which houses the Sea&nbsp;Money payments platform and other fintech units, is losing money too. This business was also granted a full digital banking license in Singapore last December.<blockquote>Shopee 并不是 Sea 唯一无利可图的业务。其数字金融服务部门（包含 Sea Money payments 平台和其他金融科技部门）也在亏损。去年12月，该业务还在新加坡获得了完整的数字银行牌照。</blockquote> Sea launched the digital financial services segment in the fourth quarter of 2019, and both the total payment volume and the number of quarterly paying users on its mobile wallet app have skyrocketed in the two years since. Unfortunately, its losses are also widening:<img src=\"https://static.tigerbbs.com/40d393bcaa2441a53a52b8f0e431b310\" tg-width=\"791\" tg-height=\"241\" width=\"100%\" height=\"auto\">Once again, this highlights Sea's overwhelming dependence on&nbsp;Free Fire&nbsp;to do the heavy lifting and support its other, unprofitable businesses.<blockquote>Sea于2019年第四季度推出了数字金融服务部门，自那以后的两年里，其移动钱包应用程序的总支付量和季度支付用户数量都出现了飙升。不幸的是，它的损失也在扩大：这再次凸显了海洋对自由射击承担繁重的工作并支持其其他无利可图的业务。</blockquote> A wobbly (but promising) business model<blockquote>不稳定（但有前途）的商业模式</blockquote> These three points show us just how unusual Sea's business model is: It's an e-commerce and fintech giant that (for now) relies on the profits from a single mobile game to offset the staggering losses of its other high-growth businesses.<blockquote>这三点向我们展示了Sea的商业模式是多么不寻常：它是一家电子商务和金融科技巨头，（目前）依靠一款手机游戏的利润来抵消其他高增长业务的惊人亏损。</blockquote> On the bright side, Sea also raised about $6 billion in fresh capital earlier this year with a big secondary stock and convertible debt offering -- and it ended&nbsp;the third quarter&nbsp;with $11.1 billion in cash and equivalents on the books. Therefore, Sea can afford to keep bleeding red ink for the foreseeable future.<blockquote>从好的一面来看，Sea 今年早些时候还通过大规模二级股票和可转换债务发行筹集了约 60 亿美元的新资本，第三季度末其账面现金及等价物为 111 亿美元。因此，在可预见的未来，Sea有能力继续流血。</blockquote> I believe Sea still has plenty of growth potential, but it will remain a very volatile stock. Potential investors should be well aware of these risks before betting that the stock will generate multibagger gains.<blockquote>我相信Sea仍然有很大的增长潜力，但它仍将是一只波动性很大的股票。潜在投资者在押注该股票将产生多重收益之前，应该充分了解这些风险。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>3 Things About Sea Limited That Smart Investors Know<blockquote>精明投资者了解的关于 Sea Limited 的 3 件事</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Things About Sea Limited That Smart Investors Know<blockquote>精明投资者了解的关于 Sea Limited 的 3 件事</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nMotley Fool2021-12-10 13:17\n\n</h4>\n</header>\n<article>\nMost investors likely know three things about&nbsp;Sea Limited(NYSE:SE): that it owns Shopee, the top e-commerce player in Southeast Asia and Taiwan; that it owns the mobile game publisher Garena; and that it is deeply unprofitable.<blockquote>大多数投资者可能知道三件事海有限公司（纽约证券交易所股票代码：SE）：其拥有东南亚和台湾顶级电子商务公司 Shopee；它拥有手机游戏发行商 Garena；而且完全无利可图。</blockquote> But this tech company is actually fairly complex, and to better understand its sprawling business, it's worth examining three finer points about it that garner a lot less attention: its dependence on&nbsp;Free Fire;&nbsp;its expansion plans in Latin America; and the growth of its fintech ecosystem.<blockquote>但这家科技公司实际上相当复杂，为了更好地了解其庞大的业务，值得研究一下它的三个较少受到关注的细节：它对自由射击；其在拉丁美洲的扩张计划；及其金融科技生态系统的增长。</blockquote> 1.Free Fire&nbsp;is the wind in Sea's sails<blockquote>1.自由射击风在大海的帆上吗</blockquote> Four years ago, Garena launched&nbsp;Free Fire, its first self-developed mobile game. The battle royale title, which was optimized for lower-end devices, quickly became one of the most popular mobile games in Southeast Asia and Latin America, and was the most-downloaded mobile game in the world in both 2019 and 2020, according to App Annie.<blockquote>四年前，Garena 推出自由射击，其首款自主研发的手机游戏。根据App Annie的数据，这款针对低端设备优化的大逃杀游戏迅速成为东南亚和拉丁美洲最受欢迎的手机游戏之一，并在2019年和2020年都是全球下载量最高的手机游戏。</blockquote> Free Fire'ssuccess significantly boosted Garena's margins, since it wasn't a licensed game like the publisher's earlier titles. As a result, Sea's digital entertainment segment (which houses Garena) started to generate even stronger adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth -- a sharp contrast to the company's e-commerce segment, which has been growing more unprofitable.<img src=\"https://static.tigerbbs.com/62a40cb0cfc26f2711593eeadadb17b1\" tg-width=\"794\" tg-height=\"200\" width=\"100%\" height=\"auto\">Therefore, Sea clearly needs&nbsp;Free Fire&nbsp;to keep generating that higher-margin revenue to subsidize the expansion of the Shopee e-commerce platform. That's a hefty burden to place on a 4-year-old mobile game.<blockquote>自由射击成功大大提高了Garena的利润率，因为它不像该发行商早期的游戏那样是一款授权游戏。因此，Sea 的数字娱乐部门（拥有 Garena）开始产生更强劲的息税折旧摊销前调整后利润 (EBITDA) 增长——与该公司的电子商务部门形成鲜明对比，后者一直在增长无利可图。因此，Sea显然需要自由射击继续产生更高利润率的收入，以补贴 Shopee 电子商务平台的扩张。这对一个4岁的手机游戏来说是一个沉重的负担。</blockquote> Looking ahead, Garena's top priorities will be to maintain&nbsp;Free Fire'smomentum, expand the franchise with new versions (likeFree Fire MAXfor higher-end devices), and launch more self-developed titles. Failing to achieve any of those goals could cause Sea's adjusted EBITDA to plummet.<blockquote>展望未来，Garena 的首要任务将是维持自由射击势头，用新版本扩展特许经营权（如自由射击最大值面向高端设备），并推出更多自主研发的游戏。未能实现这些目标中的任何一个都可能导致 Sea 调整后的 EBITDA 暴跌。</blockquote> 2. Shopee is gaining ground fast in Latin America<blockquote>2. Shopee在拉丁美洲迅速崛起</blockquote> When Shopee expanded into Brazil two years ago, skeptics predicted that it would be crushed by&nbsp;MercadoLibre(NASDAQ:MELI), the&nbsp;800-pound gorilla&nbsp;of Latin American e-commerce. However, Shopee launched aggressive marketing campaigns, offered steep discounts, and expanded into other Latin American markets.<blockquote>两年前，当 Shopee 扩展到巴西时，怀疑论者预测它会被压垮自由市场（纳斯达克股票代码：MELI），拉丁美洲电子商务界800磅重的大猩猩。然而，Shopee 发起了积极的营销活动，提供大幅折扣，并扩展到其他拉丁美洲市场。</blockquote> As a result, Shopee actually overtook MercadoLibre as the most-downloaded shopping app in Latin America earlier this year. By the end of August, Shopee's monthly active users (MAUs) in Latin America had risen 136% year over year to more than 30 million, according to Apptopia. MercadoLibre ended last quarter with 78.7 million unique active users.<blockquote>因此，今年早些时候，Shopee 实际上已经超过 MercadoLibre，成为拉丁美洲下载量最高的购物应用程序。根据 Apptopia 的数据，截至 8 月底，Shopee 在拉丁美洲的月活跃用户 (MAU) 同比增长 136%，超过 3000 万。MercadoLibre 上季度末拥有 7870 万独立活跃用户。</blockquote> Sea doesn't break out its Latin American results yet, but it's likely still racking up big losses as it expands through MercadoLibre's backyard. Last quarter, Sea said Shopee's adjusted EBITDA loss of $0.41 per order remained unchanged sequentially and year over year across all of its markets -- but narrowed by both metrics in its core Southeast Asia and Taiwan market.<blockquote>Sea 尚未公布其拉丁美洲业绩，但随着其通过 MercadoLibre 的后院扩张，它可能仍会遭受巨大损失。上个季度，Sea 表示，Shopee 所有市场的调整后 EBITDA 亏损为每订单 0.41 美元，环比和同比保持不变，但其核心东南亚和台湾市场的两项指标均有所收窄。</blockquote> In other words, Sea needs to continue narrowing Shopee's losses in Southeast Asia and Taiwan -- all while maintaining&nbsp;Free Fire'sgrowth -- to stabilize its adjusted EBITDA as it expands its massive ecosystem.<blockquote>换句话说，Sea 需要继续缩小 Shopee 在东南亚和台湾的损失，同时维持自由射击增长——随着其庞大生态系统的扩张，稳定调整后的 EBITDA。</blockquote> 3. Sea Limited is evolving into a digital bank<blockquote>3. Sea Limited 正在发展成为一家数字银行</blockquote> Shopee isn't Sea's only unprofitable business. Its digital financial services segment, which houses the Sea&nbsp;Money payments platform and other fintech units, is losing money too. This business was also granted a full digital banking license in Singapore last December.<blockquote>Shopee 并不是 Sea 唯一无利可图的业务。其数字金融服务部门（包含 Sea Money payments 平台和其他金融科技部门）也在亏损。去年12月，该业务还在新加坡获得了完整的数字银行牌照。</blockquote> Sea launched the digital financial services segment in the fourth quarter of 2019, and both the total payment volume and the number of quarterly paying users on its mobile wallet app have skyrocketed in the two years since. Unfortunately, its losses are also widening:<img src=\"https://static.tigerbbs.com/40d393bcaa2441a53a52b8f0e431b310\" tg-width=\"791\" tg-height=\"241\" width=\"100%\" height=\"auto\">Once again, this highlights Sea's overwhelming dependence on&nbsp;Free Fire&nbsp;to do the heavy lifting and support its other, unprofitable businesses.<blockquote>Sea于2019年第四季度推出了数字金融服务部门，自那以后的两年里，其移动钱包应用程序的总支付量和季度支付用户数量都出现了飙升。不幸的是，它的损失也在扩大：这再次凸显了海洋对自由射击承担繁重的工作并支持其其他无利可图的业务。</blockquote> A wobbly (but promising) business model<blockquote>不稳定（但有前途）的商业模式</blockquote> These three points show us just how unusual Sea's business model is: It's an e-commerce and fintech giant that (for now) relies on the profits from a single mobile game to offset the staggering losses of its other high-growth businesses.<blockquote>这三点向我们展示了Sea的商业模式是多么不寻常：它是一家电子商务和金融科技巨头，（目前）依靠一款手机游戏的利润来抵消其他高增长业务的惊人亏损。</blockquote> On the bright side, Sea also raised about $6 billion in fresh capital earlier this year with a big secondary stock and convertible debt offering -- and it ended&nbsp;the third quarter&nbsp;with $11.1 billion in cash and equivalents on the books. Therefore, Sea can afford to keep bleeding red ink for the foreseeable future.<blockquote>从好的一面来看，Sea 今年早些时候还通过大规模二级股票和可转换债务发行筹集了约 60 亿美元的新资本，第三季度末其账面现金及等价物为 111 亿美元。因此，在可预见的未来，Sea有能力继续流血。</blockquote> I believe Sea still has plenty of growth potential, but it will remain a very volatile stock. Potential investors should be well aware of these risks before betting that the stock will generate multibagger gains.<blockquote>我相信Sea仍然有很大的增长潜力，但它仍将是一只波动性很大的股票。潜在投资者在押注该股票将产生多重收益之前，应该充分了解这些风险。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.fool.com/investing/2021/12/09/3-things-about-sea-limited-that-smart-investors-kn/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article\">Motley Fool</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.fool.com/investing/2021/12/09/3-things-about-sea-limited-that-smart-investors-kn/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1195107888","content_text":"Most investors likely know three things about Sea Limited(NYSE:SE): that it owns Shopee, the top e-commerce player in Southeast Asia and Taiwan; that it owns the mobile game publisher Garena; and that it is deeply unprofitable.\nBut this tech company is actually fairly complex, and to better understand its sprawling business, it's worth examining three finer points about it that garner a lot less attention: its dependence on Free Fire; its expansion plans in Latin America; and the growth of its fintech ecosystem.\n1.Free Fire is the wind in Sea's sails\nFour years ago, Garena launched Free Fire, its first self-developed mobile game. The battle royale title, which was optimized for lower-end devices, quickly became one of the most popular mobile games in Southeast Asia and Latin America, and was the most-downloaded mobile game in the world in both 2019 and 2020, according to App Annie.\nFree Fire'ssuccess significantly boosted Garena's margins, since it wasn't a licensed game like the publisher's earlier titles. As a result, Sea's digital entertainment segment (which houses Garena) started to generate even stronger adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth -- a sharp contrast to the company's e-commerce segment, which has been growing more unprofitable.Therefore, Sea clearly needs Free Fire to keep generating that higher-margin revenue to subsidize the expansion of the Shopee e-commerce platform. That's a hefty burden to place on a 4-year-old mobile game.\nLooking ahead, Garena's top priorities will be to maintain Free Fire'smomentum, expand the franchise with new versions (likeFree Fire MAXfor higher-end devices), and launch more self-developed titles. Failing to achieve any of those goals could cause Sea's adjusted EBITDA to plummet.\n2. Shopee is gaining ground fast in Latin America\nWhen Shopee expanded into Brazil two years ago, skeptics predicted that it would be crushed by MercadoLibre(NASDAQ:MELI), the 800-pound gorilla of Latin American e-commerce. However, Shopee launched aggressive marketing campaigns, offered steep discounts, and expanded into other Latin American markets.\nAs a result, Shopee actually overtook MercadoLibre as the most-downloaded shopping app in Latin America earlier this year. By the end of August, Shopee's monthly active users (MAUs) in Latin America had risen 136% year over year to more than 30 million, according to Apptopia. MercadoLibre ended last quarter with 78.7 million unique active users.\nSea doesn't break out its Latin American results yet, but it's likely still racking up big losses as it expands through MercadoLibre's backyard. Last quarter, Sea said Shopee's adjusted EBITDA loss of $0.41 per order remained unchanged sequentially and year over year across all of its markets -- but narrowed by both metrics in its core Southeast Asia and Taiwan market.\nIn other words, Sea needs to continue narrowing Shopee's losses in Southeast Asia and Taiwan -- all while maintaining Free Fire'sgrowth -- to stabilize its adjusted EBITDA as it expands its massive ecosystem.\n3. Sea Limited is evolving into a digital bank\nShopee isn't Sea's only unprofitable business. Its digital financial services segment, which houses the Sea Money payments platform and other fintech units, is losing money too. This business was also granted a full digital banking license in Singapore last December.\nSea launched the digital financial services segment in the fourth quarter of 2019, and both the total payment volume and the number of quarterly paying users on its mobile wallet app have skyrocketed in the two years since. Unfortunately, its losses are also widening:Once again, this highlights Sea's overwhelming dependence on Free Fire to do the heavy lifting and support its other, unprofitable businesses.\nA wobbly (but promising) business model\nThese three points show us just how unusual Sea's business model is: It's an e-commerce and fintech giant that (for now) relies on the profits from a single mobile game to offset the staggering losses of its other high-growth businesses.\nOn the bright side, Sea also raised about $6 billion in fresh capital earlier this year with a big secondary stock and convertible debt offering -- and it ended the third quarter with $11.1 billion in cash and equivalents on the books. Therefore, Sea can afford to keep bleeding red ink for the foreseeable future.\nI believe Sea still has plenty of growth potential, but it will remain a very volatile stock. Potential investors should be well aware of these risks before betting that the stock will generate multibagger gains.","news_type":1,"symbols_score_info":{"SE":0.9}},"isVote":1,"tweetType":1,"viewCount":1549,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":13,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/605362594"}