SEA (formerly known as Garena)

[weijian]

On a related note, it is 9/9.

My wife was doing some shopping for a new lego set and after comparison, Lazarda came out to be the winner this time around, in terms of price. In prior shopping sprees and years where we shop for birthday presents, it would always be Shopee for the last 1-2 years.

I guess the fight for e-commerce in SEA, isn't going away soon. This is reminiscence of the fight a couple of years back with on demand taxi between Grab and Uber.

These guys are funding deflation measures for the average man on the street.

[weijian]

SEA reminds me of Tesla, in a way that it is able to raise huge sums of capital. IMHO, this is currently SEA's greatest moat as it is able to create a virtuous cycle with the raised capital - "get capital --> burn it --> create revenue growth --> create stock price growth --> get more capital".

It has great products, so does its competitors. It has deep pockets, so does it competitors.

Sea Ltd’s 2021 Third-Quarter Results

Second, investors love Sea. The company has already taken advantage of this by raising US$1.35 billion in 2019, US$2.6 billion in 2020, and more than US$6 billion in its latest stock and bond offering announced in September this year.

https://www.thegoodinvestors.sg/sea-ltds...er-results

[CY09]

Yea, i love Sea as well.

For info, you can collect shopee coins where you can redeem 10 shopee coins to get a $1.50 off from bengawan solo with no min spend. So i get my egg tarts, cake slices for free. why? they cost $1.50 or less. This applies to Nam Kee Pau.

Chang Cheng mixed rice stalls also have $1 off for those coffee shops run by them. So now my lunch costs $2 instead of $3.

I wonder who is paying for such product subsidies

To be honest, Sea is trying to grow GMV without care to its margins. The current market narrative love revenue growth more than net margins. Just look at Palantir who grew its margins well but missed revenue growth expectations.

[dydx]

The problems about the sea include it is of varying depth and you can't see what is at the bottom, the currents underneath the water surface can be treacherous even though the sun is up and the wind above the water is benign, and occasionally there are deadly sharks and poisonous jelly fishes.

[CY09]

Mr Market surfs on irrationality and rides the waves more than anything else.

No matter how treacherous or deep a sea is, it will create waves of news for people to ride on such as matching Alibaba on revenue. The only question is when will the wave crash and reveal who has been swimming naked all along

[weijian]

Mr Market surfs on irrationality and rides the waves more than anything else.

No matter how treacherous or deep a sea is, it will create waves of news for people to ride on such as matching Alibaba on revenue. The only question is when will the wave crash and reveal who has been swimming naked all along

I would like a slight variation to the above.

- What looks like irrational to one (eg. someone with a bias towards value), may jolly well be rational to someone who is a dreamer.

- The world needs sceptics to keep us grounded. It also needs dreamers to help us to progress. Who is to say that sceptics are wrong? Who is to say that the dreamers are wrong? Either party will only be proven right or wrong on hindsight.

- Let's not forget that Mr Market is more often right than wrong! If Mr Market surfs on irrationality but is right most of the time, where does that bring us? Is it time for us to put down our biases, put on multiple lenses and check out the basis of Mr Market's irrationality?

- It is easy to be a sceptic, if you are one. And been a sceptic always sound intellectually brilliant. It is easy to be a dreamer, if you are one. And been a dreamer always give one big bragging rights if you are the "lucky one". As an investor, the hard part is always (1) accepting one may be wrong, (2) seeing the arguments on the other side, whichever side you are on.

[Wildreamz]

So much poetry in this thread. Interesting.

Right now, SEA depends a lot upon their gaming division, so they do not bleed too much cash as they get to scale.

Unlike AWS for Amazon however, game development is risky (a game might be a hit or a flop) and usually each title have a limited life-span, I don't think it's a reliable, ever-growing profit driver. That said Garena has been executing brilliantly last few years, I will not count them out completely to keep delivering hit games.

The runway for SEA's e-commerce to get to scale and profitability might be shorter than most think. Though there is definitely a path to get there. I think there are safer bets with larger upside. Eg. some of the FAAMNNG names.

2c.

(not vested, not investment advise)

[BlueKelah]

So much poetry in this thread. Interesting.

Right now, SEA depends a lot upon their gaming division, so they do not bleed too much cash as they get to scale.

Unlike AWS for Amazon however, game development is risky (a game might be a hit or a flop) and usually each title have a limited life-span, I don't think it's a reliable, ever-growing profit driver. That said Garena has been executing brilliantly last few years, I will not count them out completely to keep delivering hit games.

The runway for SEA's e-commerce to get to scale and profitability might be shorter than most think. Though there is definitely a path to get there. I think there are safer bets with larger upside. Eg. some of the FAAMNNG names.

2c.

(not vested, not investment advise)

Not sure about SEAs future, but now the number 1 online crypto game pay to play is Axie infinity by Sky Mavis vietnamese startup. They have a fast expanding userbase and revenue and income as well. I missed out on getting in their AXS token which has gone from $4 to $100 now since June July. Recently they have started adding LAND NFT as well.(one of the limited land 220 parcels sold for 2.5m recently , pretty sure theres some element of money laundering there.)

However theres many upcoming competitors now and Axie "cutesy" game avatars are a bit like MapleStory so I am not sure how long they can survive, but so far they have a really good ecosystem set up with even their own small "exchange" which links up their own Ronin wallet which allows easy low fee conversions of SLP game token/AXS crypto token/USDC token and WETH token, plus a staking function(though long term i think the math doesnt work out as its like 160% return per year???) They also have own marketplace to trade their in game characters and other items(NFTs) easily.

So pretty tight ecosystem, but only problem is the game is just like a pokemon type card game, not all gamers will like to play. And other than their crypto token going to the moon you can only make around 10-20USD daily playing for most players( excellent for developing nation players as thats like double their daily minimum wage)

Too bad not listed yet, i think is all venture cap funding at the moment.

[Wildreamz]

Not sure about SEAs future, but now the number 1 online crypto game pay to play is Axie infinity ..

Hi BlueKelah,

Actually SEA has very little to do with "play-to-earn" Crypto games so I'm not sure why you'd bring it up in this thread.

They have completely different gamer base, negligible DAUs, unsustainable economics and doesn't directly compete with SEA at all.

[CY09]

https://www.straitstimes.com/business/co...for-lazada

Lazada looks intent to fight Shopee in South East Asia e commerce market with an aim to grow its GMV to $100 billion which is triple what Shopee musters now. They are backed by a partner who has strong logistics network in Cainiao and connections to China Merchants (the world factory) on the alibaba network. Shopee on the other hand has an agile management who has a billions in cash to burn.

Shopee is likely going to park the bus with its cash, capitalize on its current 3-0 lead at half time and hope lazada runs out of time to score the winner

Grab your popcorns or buy it from Lazada!