Sea Limited: Promising fast growing company





In recent years, many brokerage companies have given up commissions and some even offer fractional shares. This means that you can regularly invest small amounts of money without worrying about stock prices or the excessive impact of commissions on your brokerage account.

Investing little by little, when the opportunity presents itself, is like saving money in a magic piggy bank, which not only accumulates it, but also multiplies it (both due to the growth of the share price value and due to dividends). Have some free money? Why not put them in this kind of piggy bank?

For example, now is the best time to buy Sea Limited (NYSE: SE) stock. In June, we already published a review of this company.

20 dollar bills

Current position of Sea Limited

Sea Limited divides its business into three segments:

  1. Shopee (e-commerce);
  2. Garena (video games);
  3. Sea Money (digital finance).

The company primarily operates in seven markets in Southeast Asia, one of the fastest growing economies in the world, although it has also expanded into Latin America.

Shopee is the leading e-commerce platform in Southeast Asia (by gross merchandise volume (GMV) and total orders). Shopee had more than double the number of visitors last year than its main competitor, Alibaba’s Lazada. This scale is a significant advantage as both buyers and sellers tend to gravitate towards the largest market (providing better choices for buyers and a larger audience for sellers).

Sea Money provides digital and mobile wallet services to consumers, allowing them to shop both online and offline. This platform integrates with Shopee, giving merchants access to the payment processing services in the market. This platform strengthens the competitive edge of Sea Limited by expanding its trading monetization capabilities.

Finally, Garena develops and produces video games, and provides gamers with live streaming and social features. Her most famous game, Free Fire, was the world’s most downloaded mobile game in 2020 (according to App Annie). And it was the most profitable mobile game in Latin America, Southeast Asia and India in the first quarter of 2021.

Thanks to these advantages, Sea Limited has achieved significant sales growth in all three business segments in recent years.

Income20182020CAGR
Shopee, $ billion0.272.2184%
Garena, $ billion0.462.0109%
Sea Money, $ million11.560.8130%
SOURCE: SEA LIMITED SEC FILINGS

Although earlier Sea Limited grew rather quickly, but this year the company simply “blew up” the market. In the first quarter of 2021, Shopee, Garena and Sea Money generated revenue growth of 250%, 111% and 396%, respectively, which is especially impressive given the already considerable company size (market capitalization – $ 147 billion).

Perspectives

More importantly, the company still has good growth prospects. Currently in Southeast Asia, Internet coverage is 69% (according to research by Google Alphabet). This is much less than, for example, in North America – 94%.

The pandemic accelerated digital adoption last year, creating 40 million new Internet users in the region. As this trend continues, more purchases and payments will be made over the Internet, which will increase the efficiency of Sea Limited’s business. This year, management has estimated its market opportunity at $ 115 billion, more than 27 times the company’s 12-month sales.

Sea Limited has a strong competitive edge, exceptional revenue growth and expanding market opportunities. This is why this company’s stock looks like a smart investment.

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