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

Thematic (Sector/Industry)

<ul>
<li>We recently conducted a round of interviews of Chinese start-up gaming companies, and we see an overall loosening in the regulatory environment, although near-term hit titles are still absent.</li>
<li>We are positive on Tencent because of the increasing possibility of DNF mobile launch. We raise NetEase’s TP to US$ 99, and it’s one of our top picks now</li>
<li>Other gaming companies that have upward trends include Kingsoft, Lingxi Games (under Alibaba), Koei Tecmo, Nexon, and Mihoyo. Companies with a downward trend include BILI and Garena (under SEA).  </li>
</ul>


We recently conducted a round of interviews of Chinese start-up gaming companies, and we see an overall loosening in the regulatory environment, although near-term hit titles are still absent.
We are positive on Tencent because of the increasing possibility of DNF mobile launch. We raise NetEase’s TP to US$ 99, and it’s one of our top picks now
Other gaming companies that have upward trends include Kingsoft, Lingxi Games (under Alibaba), Koei Tecmo, Nexon, and Mihoyo. Companies with a downward trend include BILI and Garena (under SEA).  


[Gaming Sector Update]: Top Picks Are Tencent and NetEase, Positive to Kingsoft, Koei Tecmo, Nexon.

Equity Bottom-Up

<ul>
<li>SE reported C4Q22 total revenue 10% and 14% higher than our est. and cons., thanks to the improvement in monetization rate of eCommerce segment. </li>
<li>We expect the weak trend to continue into 2023, with intensified competition from eCommerce competitors and weak performance of Free Fire.</li>
<li>We raise our TP to US$62, which implies 2.5X PS/6X PE/4X PS for eCommerce/gaming/fintech in 2023. Maintain SELL rating due to challenging growth outlook. </li>
</ul>


SE reported C4Q22 total revenue 10% and 14% higher than our est. and cons., thanks to the improvement in monetization rate of eCommerce segment. 
We expect the weak trend to continue into 2023, with intensified competition from eCommerce competitors and weak performance of Free Fire.
We raise our TP to US$62, which implies 2.5X PS/6X PE/4X PS for eCommerce/gaming/fintech in 2023. Maintain SELL rating due to challenging growth outlook. 


[Sea Limited (SE US) Target Price Change]: Expect Weak Growth Trend into 2023

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd's</a> 4Q2022 results were nothing short of spectacular, with the company booking a net profit more than a year ahead of expectations, underlining management's ability to thrive in adversity.</li>
<li>The company cut costs and most notably A&amp;P spend on e-commerce but it still managed to grow GMV and booked positive adjust EBITDA for all its core Asian markets.  </li>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> now stands out well ahead of its peers on profitability and should trade at a premium but it will have to continue to execute.</li>
</ul>



Sea Ltd's 4Q2022 results were nothing short of spectacular, with the company booking a net profit more than a year ahead of expectations, underlining management's ability to thrive in adversity.
The company cut costs and most notably A&amp;P spend on e-commerce but it still managed to grow GMV and booked positive adjust EBITDA for all its core Asian markets.  

Sea Ltd (SE US) now stands out well ahead of its peers on profitability and should trade at a premium but it will have to continue to execute.


Sea Ltd's (SE US) - Through the Looking Glass

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>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> shares went up by 22% yesterday as the company’s top-line beat consensus by 13% and recorded its first-ever operating profit of $342.9m (consensus: -$344m).</li>
<li>Main growth drivers such as GMV, orders, Gaming active users and Gross-Bookings indicate that growth could stall. Meanwhile, competition is heating up, sidelining the importance of cost discipline in e-commerce.</li>
<li>Turning unprofitable yet-again could be a hard thing to swallow, even for those firmly believing in Shopee. Therefore, Sea could fall a lot more than the previous-bottom next-time it falls.</li>
</ul>



Sea Ltd (SE US) shares went up by 22% yesterday as the company’s top-line beat consensus by 13% and recorded its first-ever operating profit of $342.9m (consensus: -$344m).
Main growth drivers such as GMV, orders, Gaming active users and Gross-Bookings indicate that growth could stall. Meanwhile, competition is heating up, sidelining the importance of cost discipline in e-commerce.
Turning unprofitable yet-again could be a hard thing to swallow, even for those firmly believing in Shopee. Therefore, Sea could fall a lot more than the previous-bottom next-time it falls.


Sea Ltd 4Q22 Results: Can Profits Hold When Growth Stall?

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/carsales-com-ltd" target="_blank" data-smartkarma-citation="entities:701:1" rel="noopener">Carsales.Com Ltd (CAR AU)</a> aims to raise around US$330m (A$501m) via a renounceable entitlement offer. The deal is relatively large to digest at 28.2 days of three month ADV. </li>
<li>The use of proceeds will be to acquire 40% of Webmotors SA and strengthen its balance sheet. </li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Carsales.Com Ltd (CAR AU) aims to raise around US$330m (A$501m) via a renounceable entitlement offer. The deal is relatively large to digest at 28.2 days of three month ADV. 
The use of proceeds will be to acquire 40% of Webmotors SA and strengthen its balance sheet. 
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Carsales Renounceable Entitlement Offer - Following up on a Decade-Old Acquisition

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Sea Ltd (SE US)

[Gaming Sector Update]: Top Picks Are Tencent and NetEase, Positive to Kingsoft, Koei Tecmo, Nexon.

We recently conducted a round of interviews of Chinese start-up gaming companies. Our top picks are Tencent and NetEase. We are also positive to...

Blue Lotus Research Institute

[Sea Limited (SE US) Target Price Change]: Expect Weak Growth Trend into 2023

eCommerce GMV and gaming users both declined YoY in C4Q22. We expect the weak trend to continue into 2023, with intensified competition from...

Blue Lotus Research Institute

Sea Ltd's (SE US) - Through the Looking Glass

Sea Ltd (SE US) now stands out well ahead of its peers on profitability and should trade at a premium but it will have to continue to execute. We...

Angus Mackintosh

Sea Ltd 4Q22 Results: Can Profits Hold When Growth Stall?

Main growth drivers indicate that Sea's growth could stall. Meanwhile, competition is heating up, sidelining the importance of cost discipline in e...

Oshadhi Kumarasiri

Carsales Renounceable Entitlement Offer - Following up on a Decade-Old Acquisition

Carsales.Com Ltd (CAR AU) aims to raise around US$330m (A$501m) via a renounceable entitlement offer. The deal is relatively large to digest at...

Ethan Aw

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)