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

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

[Sea Limited (SE US, SELL, TP US$62) Earnings Preview]: Increase Spending in ECommerce and Gaming

[Sea Limited (SE US, SELL, TP US$60) Target Price Change]: Cut Gaming Revenue and Margin Forecast

Trading Sea Ltd in 2023: It Is Still The Same Beast

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>We estimate SEA’s 4Q22 revenue to be largely in line with cons., while non-GAAP net loss to be narrower than cons. </li>
<li>We see SEA to continue to experience challenges in top-line growth because of inflation, competition with TikTok, and weak performance of Free Fire. Yet, the losses will be better managed.</li>
<li>We slightly raise SE’s TP by 6% to US$55 to reflect 4Q22’s margin beat, yet maintain SELL because of the mid-to-long-term challenges.</li>
</ul>


We estimate SEA’s 4Q22 revenue to be largely in line with cons., while non-GAAP net loss to be narrower than cons. 
We see SEA to continue to experience challenges in top-line growth because of inflation, competition with TikTok, and weak performance of Free Fire. Yet, the losses will be better managed.
We slightly raise SE’s TP by 6% to US$55 to reflect 4Q22’s margin beat, yet maintain SELL because of the mid-to-long-term challenges.


[Sea (SE US, SELL, TP US$55) Target Price Change]: A Margin-Beat Quarter Followed by a Tough 2023