May 19, 2022
Shopee-owner Sea posts upbeat results on e-commerce strength
May 19, 2022
Singapore-based Sea Ltd on Tuesday beat quarterly sales estimates and posted a smaller-than-expected quarterly loss, driven by strength in its core e-commerce as well as digital payments business.
Sea shares rose 13% amid a rally in major U.S-listed Chinese technology stocks on hopes of Beijing easing its regulatory crackdown on the internet sector.
Sea, which operates Shopee, SeaMoney and gaming unit Garena, said first-quarter e-commerce revenue grew 64.4%.
After a meteoric run in 2020 and part of 2021, with multiple quarters of triple-digital revenue growth and expansion into newer markets including Mexico, Spain and South Korea, Sea's growth tapered as the pandemic-fuelled boom in e-commerce and digital entertainment waned.
In the reported quarter, the company pulled out from India and France, while rising costs and supply chain issues added to its troubles, driving Sea shares 70% lower this year.
"Shopee has continued to gain market share amid intense competitive pressure, although country re-openings across ASEAN and Taiwan are likely to drag on gaming and e-commerce segment earnings," said Kristine Lau, analyst at research firm Third Bridge.
Sea widened its full-year 2022 e-commerce revenue outlook range to between $8.5 billion and $9.1 billion from $8.9 billion to $9.1 billion forecast earlier.
"We still think the original guidance is achievable," Chief Legal Officer Yanjun Wang said on a post-earnings call, adding that Sea's key Southeast Asian markets have so far been more resilient to Covid-19 outbreaks, while inflation has also been under control in the region.
First-quarter total revenue rose 64.4% to $2.90 billion, topping analysts' expectations of $2.76 billion, according to Refinitiv IBES data.
Net loss, however, widened to $580.1 million from $422.1 million. Excluding items, the company reported a loss per share of $1.04, compared with analysts' average estimate of a $1.23 loss.
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