ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea (SE US)</a> 2Q2023 results reflected some underlying slowdown but beneath the surface, the company's core marketplace business saw accelerated growth, as it stepped up investment, and margins improved concurrently. </li>
<li>The company invested in live streaming, bringing on 1m influencers in 2Q2023, likely stemming the impact of TikTok. The gaming business showed meaningful signs of recovery QoQ in 2Q2023.</li>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea (SE US)</a> grew its cash reserves in 2Q2023 to US$7.7bn signifying the success of its business model. The short-term sell-off looks overdone possibly triggered by talk of quarterly losses.</li>
</ul>



Sea (SE US) 2Q2023 results reflected some underlying slowdown but beneath the surface, the company's core marketplace business saw accelerated growth, as it stepped up investment, and margins improved concurrently. 
The company invested in live streaming, bringing on 1m influencers in 2Q2023, likely stemming the impact of TikTok. The gaming business showed meaningful signs of recovery QoQ in 2Q2023.

Sea (SE US) grew its cash reserves in 2Q2023 to US$7.7bn signifying the success of its business model. The short-term sell-off looks overdone possibly triggered by talk of quarterly losses.


Sea (SE US) - Turning Up the Investment Dial

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Lianlian DigiTech / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lianlian-digitech" target="_blank" data-smartkarma-citation="entities:39940:1" rel="noopener">Lianlian DigiTech (2104619D CH)</a> is looking to raise up to US$500m in its upcoming HK IPO.</li>
<li>LianLian DigiTech is a digital technology company that provides a range of digital payment services and value-added services to customers in China and around the world.</li>
<li>Lianlian’s digital payments segment has historically been its largest revenue contributor. However, profitability has been declining on the back of lower gross margins and mounting losses from its Liantong JV.</li>
</ul>



Lianlian DigiTech (2104619D CH) is looking to raise up to US$500m in its upcoming HK IPO.
LianLian DigiTech is a digital technology company that provides a range of digital payment services and value-added services to customers in China and around the world.
Lianlian’s digital payments segment has historically been its largest revenue contributor. However, profitability has been declining on the back of lower gross margins and mounting losses from its Liantong JV.


LianLian Digitech Pre-IPO - Declining Profitability with No End in Sight Just Yet

GoTo Gojek Tokopedia Tbk PT / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo Gojek Tokopedia (GOTO IJ)</a> released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress towards its profitability goals for 2023.</li>
<li>The company continues to focus on maintaining high-quality users but with an increasing focus on more affordable offerings to expand its demographic reach with the potential to double its users.</li>
<li>
<a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia-tbk-pt" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> is undergoing a full assessment across all divisions, with a focus on improving synergies, with new strategies for growth to be revealed next quarter.</li>
</ul>



GoTo Gojek Tokopedia (GOTO IJ) released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress towards its profitability goals for 2023.
The company continues to focus on maintaining high-quality users but with an increasing focus on more affordable offerings to expand its demographic reach with the potential to double its users.

GoTo is undergoing a full assessment across all divisions, with a focus on improving synergies, with new strategies for growth to be revealed next quarter.


GoTo Gojek Tokopedia (GOTO IJ) - Striking a New Balance

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Sea reported CY2Q23 top-line that missed consensus by 3.4%, while non-GAAP net income beat  by 16%. Sea guided for the net margin to turn negative again in future quarters.</li>
<li>We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.</li>
<li>Yet, we need to remind investors that Sea’s 3Q earning might have some upside, including user growth of Shopee, as well as stabilization of gaming metrics.</li>
</ul>


Sea reported CY2Q23 top-line that missed consensus by 3.4%, while non-GAAP net income beat  by 16%. Sea guided for the net margin to turn negative again in future quarters.
We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.
Yet, we need to remind investors that Sea’s 3Q earning might have some upside, including user growth of Shopee, as well as stabilization of gaming metrics.


[Sea Limited (SE US, SELL, TP US$35) Target Price Change]: Long-Term Headwinds Amid Upsides in 3Q

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>While our outlook for <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea (SE US)</a>'s 2Q23 was bearish, we didn't anticipate such a substantial price reaction post-earnings, considering the existing low consensus.</li>
<li>However, the market appears to have given more importance to the revenue miss and the deterioration of fundamentals in e-commerce, as indicated by the post-earnings price reaction of -28.7%.</li>
<li>Shopee's modest profitability, restrained growth fail to warrant an EV surpassing $7.0bn. The Gaming business is best valued around $3.0bn, while the Fintech arm should be valued at around $5.0bn.</li>
</ul>


While our outlook for Sea (SE US)'s 2Q23 was bearish, we didn't anticipate such a substantial price reaction post-earnings, considering the existing low consensus.
However, the market appears to have given more importance to the revenue miss and the deterioration of fundamentals in e-commerce, as indicated by the post-earnings price reaction of -28.7%.
Shopee's modest profitability, restrained growth fail to warrant an EV surpassing $7.0bn. The Gaming business is best valued around $3.0bn, while the Fintech arm should be valued at around $5.0bn.


Sea Ltd: Share Price Approaching Its Rightful Destination

Singapore

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

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Sea Ltd (SE US)

Sea (SE US) - Turning Up the Investment Dial

Sea Ltd 2Q2023 reflected an underlying slowdown but beneath the surface, the company's core marketplace business saw accelerated growth, as it...

Angus Mackintosh

LianLian Digitech Pre-IPO - Declining Profitability with No End in Sight Just Yet

Lianlian DigiTech (2104619D CH) is looking to raise up to US$500m in its upcoming HK IPO. Lianlian’s digital payments segment has historically been...

Ethan Aw

GoTo Gojek Tokopedia (GOTO IJ) - Striking a New Balance

GoTo released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress...

Angus Mackintosh

[Sea Limited (SE US, SELL, TP US$35) Target Price Change]: Long-Term Headwinds Amid Upsides in 3Q

We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Sea (SE US) - Turning Up the Investment Dial

Sea Ltd 2Q2023 reflected an underlying slowdown but beneath the surface, the company's core marketplace business saw accelerated growth, as it...

Angus Mackintosh

LianLian Digitech Pre-IPO - Declining Profitability with No End in Sight Just Yet

Lianlian DigiTech (2104619D CH) is looking to raise up to US$500m in its upcoming HK IPO. Lianlian’s digital payments segment has historically been...

Ethan Aw

GoTo Gojek Tokopedia (GOTO IJ) - Striking a New Balance

GoTo released results for 2Q2023, which reflected a slower growth environment exacerbated by lower incentive spend but some significant progress...

Angus Mackintosh

[Sea Limited (SE US, SELL, TP US$35) Target Price Change]: Long-Term Headwinds Amid Upsides in 3Q

We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.

Blue Lotus Research Institute

Sea Ltd: Share Price Approaching Its Rightful Destination

Given that shares were down as much as 28.7% yesterday, there could be some upside to Sea Ltd shares, as we are expecting some shorts to cover....

Oshadhi Kumarasiri