: Value Investing Forum - Singapore, Hong Kong, U.S.

Full Version: SEA (formerly known as Garena)
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
The Tencent of Southeast Asia Isn't Really Like Tencent at All

By Yoolim Lee
October 12, 2017, 5:00 AM GMT+8

Singapore’s Sea Ltd. initially modeled itself on Chinese internet colossus Tencent Holdings Ltd. and is often called the Tencent of Southeast Asia. Now that Sea has filed for an initial public offering and given a peak at its financials, the resemblance is starting to break down.

The company, seeking to raise about $700 million as it goes public in New York, does offer games and digital entertainment like Tencent. In fact, the Chinese company licenses hit games like League of Legends to Sea, and owns about 40 percent of the smaller firm’s stock.

But where Tencent is immensely profitable, Sea is immensely unprofitable -- with signs that losses may grow deeper. Tencent’s net profit margin in the first half of the year was 31 percent, with net income of $4.76 billion on revenue of $15.5 billion. Sea has a negative net margin of 84 percent, with a loss of $165.2 million on revenue of $195.5 million.

More details in
Private equity is about "what is possible" and public equity is about "what is probable".

IMHO, SEA's game biz looks to have the best bang of the buck for success. It's other focus like e-commerce/message/payment systems are all network-effect type of businesses and generally is "winner takes all". I suspect if one isn't big now, most probably it would never be big since the big boys naturally have their size as the moat.

Welcome to the public equity space (soon)!
give them a few years, what's left may just be garena. at least sg can boast of entrepreneurship success with tech unicorns like sea and razor.
Singapore's game startup Sea raised US$884m in New York IPO

[NEW YORK] Singapore's Sea Ltd, Southeast Asia's most valuable startup, raised about US$884 million in its initial public offering in New York.

The company sold 59 million American depositary shares for US$15 apiece, according to a statement Friday, offering more shares and pricing them above its initial range of US$12 to US$14 each. The total amount may be more than US$1 billion if an option to sell additional shares is exercised, according to a person familiar with the matter, asking not to be identified because the matter is private.

The games company is backed by Tencent Holdings Ltd and has benefited from the Chinese company's support. Sea licenses games from Tencent, which also holds a stake of about 40 per cent in the smaller company. Investors are scooping up Sea's shares despite rising losses at the company as it diversifies into e-commerce and payments. Sea had a net loss of US$165.2 million in the first half of the year on revenue of US$195.5 million.

It was valued at US$3.75 billion in its 2016 fundraising and will surpass US$4 billion with the IPO.

"Sea is a future-looking investment," Kai-Fu Lee, founder of Beijing-based Sinovation Ventures, said before the offering. "Investors are betting that it can become the 800-pound gorilla that will make all the money it may have lost."
>>>>>>> okay man -_-
Generally, i stand on the end of those whom have skin in the game (ie. the shortists)

Shorts Face Off With Analysts Over Marquee Singapore Startup

Sea Ltd., operator of Southeast Asia’s biggest gaming platform, has had a rough start as a public company.

The much-heralded Singapore-based company raised about $1 billion in an October initial public offering led by Goldman Sachs Group Inc., Morgan Stanley and Credit Suisse Group AG. The shares have tumbled almost 20 percent since then and losses are widening. When the company reports results Wednesday, it’s projected to lose $201 million in the three months ended in December, more than double the net loss a year earlier, according to data compiled by Bloomberg. Revenue probably increased 75 percent to $154.5 million.