Sea shares plunged in Tuesday buying and selling, regardless of Southeast Asia’s largest tech firm reporting double-digit development in all three of its enterprise divisions for the newest quarter.
The Singapore-based client web agency reported income of $6 billion for the three months ending Sep. 30, up virtually 40% year-on-year. Web earnings additionally rose by 145% to succeed in $375 million for the quarter. But the surge in earnings nonetheless fell under analysts’ lofty predictions of $433 million, serving to to ship shares decrease.
Sea’s working bills additionally jumped by 28%, as its e-commerce arm Shopee tries to strengthen its aggressive fringe of rivals like Alibaba’s Lazada and ByteDance’s TikTok Store. A key focus was strengthening Sea’s logistics arm: “We’re making our patrons happier whereas decreasing [delivery] prices,” Forrest Li, the corporate’s chairman and CEO, mentioned throughout an earnings briefing.
Li pointed to Taiwan, the place patrons choose to choose up items themselves as a substitute of house supply. To satisfy demand, Sea expanded their automated locker retailer community, opening over 2,500 places in lower than three years. The lockers assist decrease value per order by 30%, and Sea passes the financial savings on to customers Li mentioned.
Sea’s CEO additionally claimed that expanded supply networks allowed Sea to scale back common supply occasions by two days in comparison with a yr earlier, permitting Shopee to promote extra upmarket merchandise.
Sea’s three enterprise divisions—Shopee, online game developer Garena, and fintech unit Monee—all grew their income by double digits final quarter. “After a really sturdy first half of the yr, our momentum has continued into the third quarter,” Li mentioned in ready remarks.
Shopee, the most important contributor to Sea’s enterprise, has now achieved 5 consecutive quarters of sequential gross merchandise worth (GMV) development. This quarter, Shopee’s GMV rose by 28.4% year-on-year, hitting a brand new excessive of $32.2 billion.
Monee, Sea’s monetary companies arm, additionally reported sturdy development, with its mortgage e book increasing 70% year-on-year, whereas sustaining a steady danger profile.
The corporate’s digital leisure enterprise, Garena, delivered its greatest quarter since 2021, with quarterly bookings up 51.1% year-on-year.
Li attributed this development to the cell recreation Free Fireplace, which ran two campaigns that includes well-known characters from the TV exhibits Squid Recreation and Naruto that upped buyer spending.
Sea now seeks to deepen its international presence, with a deal with markets in Asia and Latin America. “We take a really extremely selective method on any new geographic expansions,” mentioned Hou Tianyu, Sea’s chief monetary officer. Sea not too long ago re-entered Argentina, whereas it shut down cross-border operations in Chile and Colombia.
“Latin America is a crucial marketplace for us. We are going to proceed to discover the alternatives to serve the customers and enterprise nicely there,” Hou added.
Sea’s CEO Li added that Taiwan is one other essential marketplace for the corporate. “We nonetheless see a whole lot of room to deepen our penetration additional on this extremely engaging market,” Li mentioned in ready remarks.
