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Aug 142 min read

Shopee-owner Sea Indicates Strong Online Shopping Momentum with Revenue Exceeding Expectations

Sea Ltd surpasses revenue estimates for Q2. Shopee's GMV expected to grow by mid-20% this year. E-commerce revenue up by 34% to US$2.8 billion.


This positive news has propelled its U.S.-listed shares up by 11% on Tuesday.


CEO Forrest Li announced that Shopee is poised to achieve an adjusted core operating profit in the third quarter, with the gross merchandise value (GMV) for the platform anticipated to increase by around 20% this year. This forecast marks a significant improvement from the earlier expectation of GMV growth in the high-teens range by 2024.


Analysts at Bernstein noted, "Sea has been aggressively pushing for growth in its e-commerce segment, which has led to a material increase in GMV growth and reduced losses,"


E-commerce revenue, constituting approximately two-thirds of the company's total revenue, surged by 34% to $2.8 billion, surpassing market projections of US$2.68 billion, as reported by LSEG.


Shopee faces competition from Tokopedia, a subsidiary of Indonesia's GoTo Gojek Tokopedia, and Temu, a branch of China-based PDD Holdings.


Despite facing challenges from a global economic slowdown in recent years, Sea has undertaken measures to streamline its operations and reduce costs, including workforce reductions. The company experienced remarkable growth in 2020 and 2021, benefiting from increased demand during the pandemic and expanding its presence beyond Southeast Asia.


By exiting the Indian market, along with certain European and Latin American markets, and adjusting seller fees on its platform, Sea achieved its first annual profit last year.


In the quarter ending on June 30, Sea's revenue climbed by 23% to US$3.81 billion, surpassing analysts' average estimate of $3.71 billion.


Bookings within its digital entertainment segment, encompassing the gaming unit Garena, saw a stronger-than-expected growth of 21%, while sales from its financial services arm SeaMoney increased by 21.4%, slightly below estimates.


Earnings per share for the company stood at 14 cents, falling short of the anticipated 18 cents. Sea also announced the resignation of CFO Tony Hou from its board of directors.

 

  • Sea Ltd surpasses revenue estimates for Q2

  • Shopee's GMV expected to grow by mid-20% this year

  • E-commerce revenue up by 34% to US$2.8 billion


Source: REUTERS

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