MariBank, the digital bank of Singapore giant Sea Group, has been launched in Singapore to select members of the public as it gradually rolls out its services.
Rafael Henrique | soba pictures | Rocket Lite | Getty Images
Tech giant in Southeast Asia SEA LIMITED On Monday, it recorded its first profitable year amid efforts to defend market share against… Ali BabaOwned by Lazada and TikTok.
Net income in 2023 was $162.7 million, compared to a net loss of $1.7 billion in 2022. There was a net loss of $111.6 million in the fourth quarter of 2023, compared to net income of $422.8 million in the same period. From last year. .
“In 2023, we achieved profitability, strengthened the market leadership of our e-commerce business, developed our digital financial services business, and the performance of our digital entertainment business stabilized,” Forrest Li, Sea's chairman and CEO, said on Monday. Before that, Sea had been largely unprofitable, racking up billions of dollars in losses since its inception in 2009.
Sea operates in Southeast Asian markets and has businesses in e-commerce (Shopee), financial services (SeaMoney) and gaming (Garena).
“We emerged with a much stronger balance sheet while increasing our cash position to $8.5 billion through the end of 2023, demonstrating the discipline and prudence we have applied to our investments over the past year,” Lee said.
Sea's New York-listed shares closed 5.58% higher on Monday. Lee said the company expects 2024 to be a profitable year as well.
Shopee, Sea's e-commerce arm, said Monday it had made “significant market share gains” in 2023 despite “intense competition in Southeast Asia.” See also said Shopee's market share in the region has “strengthened” and the company intends to “maintain our market share in 2024.”
Shopee faces stiff competition from players like Ali BabaOwned by Lazada and Indonesia's Tokopedia in the region. Tokopedia has merged with TikTok Shop in Indonesia to form the enlarged Tokopedia entity, in which TikTok will take a controlling stake of 75.01%.
In August, Sea said it would focus on growth over profits, marking a reversal of recent cost-cutting measures in the face of economic uncertainty. Analysts said the pivot was a move to defend market share.
SeaMoney reported its first year of profits in 2023. The company also expects its flagship game Free Fire to grow “by double digits year over year for both user base and bookings in 2024.”
“We are pleased to see positive trends in both growth and profitability for all three of our businesses. Looking to the future, we will continue to invest in the future with discipline and focus,” Si said in a press release on Monday.
“The guidance was very positive and surprising,” said Sachin Mittal of DBS Bank. The bank upgraded Sea stock from “hold” to “buy” with a price target of $75 following the earnings report.
“It's about TikTok not being too aggressive in Indonesia. They achieved what they wanted (with) Tokopedia and are now dealing with regulatory compliance,” Mittal told CNBC on Tuesday.
CGS-CIMB Securities analyst Khang Chuen Ong on Tuesday upgraded Sea to “add” from “hold” while increasing the price target to $74 per share from $46, representing a 37% upside.
Wedbush on Monday raised its price target on Sea to $72 from $45, while maintaining an “outperform” rating.
“We are increasingly positive on the stock given the growth and margin trajectory indicated by management's forecasts, and we believe Sea is in the early stages of a successful turnaround as competitive pressures ease and investments in streaming, user acquisition and fulfillment begin to pay off,” Wedbush analysts said.
