Shares of Sea Ltd. surged to a seven-month high on Monday following the e-commerce and online gaming platform company’s fourth-quarter revenue report that exceeded expectations.
E-commerce Boom
The Singapore-based company experienced robust growth in its e-commerce sector, particularly with its platform Shopee. Despite the digital entertainment business, Garena, falling short of revenue expectations, Sea Ltd. noted positive trends such as the game “Free Fire” reaching over 100 million peak daily active users in February.
Stock Performance
Pre-market trading saw a significant 11.7% increase in Sea Ltd.’s stock, marking an eighth consecutive gain and positioning it to open at its highest price since August 11.
Financial Snapshot
Sea Ltd. reported a net loss of $111.6 million (19 cents per share) compared to a net income of $422.8 million (72 cents per share) in the previous year. While the reported per-share loss was slightly below analysts’ expectations of 20 cents, revenue saw a solid 4.8% growth to $3.62 billion, surpassing the FactSet consensus of $3.57 billion.
E-commerce Continues to Thrive
Among Sea’s business segments, e-commerce revenue saw a significant increase of 23.2% to $2.6 billion, surpassing the FactSet consensus of $2.5 billion. The impressive growth was driven by a 46% climb in gross orders to 2.5 billion and a 28.6% rise in gross merchandise value to $23.1 billion, exceeding expectations of around $22.7 billion.
Shopee Dominates Southeast Asia
Chief Executive Forrest Li expressed confidence in the performance of Shopee amidst heightened competition in Southeast Asia, noting a substantial increase in market share throughout 2023.
Digital Entertainment Takes a Hit
While digital entertainment revenue experienced a decrease of 46.2% to $510.8 million, falling short of expectations, Garena’s popular game “Free Fire” emerged as the most downloaded mobile game globally in 2023.
Growth Continues into 2024
Li shared optimism regarding the company’s positive momentum, with Free Fire surpassing 100 million peak daily active users in February. The positive trends are expected to carry forward into 2024.
SeaMoney Shows Promise
In the digital-financial-services business, SeaMoney, revenue rose by 24.3% to $472.4 million, slightly below the FactSet consensus. Li highlighted the significant milestone of achieving positive profit in 2023, especially attributing it to the success of consumer and SME credit services.
Impressive Stock Performance
The stock has made a remarkable 33.6% rally in just the past three months, surpassing the S&P 500 index, which has seen a 12.4% increase during the same period. This strong performance highlights the potential for great returns for investors.