Shopee-owner Sea posts upbeat results on e-commerce strength

Besides Shopee, Sea operates digital payments platform SeaMoney and gaming unit Garena. PHOTO: REUTERS

SINGAPORE (REUTERS) - Singapore-based Sea Ltd on Tuesday (May 17) 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 per cent amid a rally in major US-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 per cent.

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 per cent 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 US$8.5 billion and US$9.1 billion from US$8.9 billion to US$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 South-east 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 per cent to US$2.90 billion, topping analysts’ expectations of US$2.76 billion, according to Refinitiv IBES data.

Net loss, however, widened to US$580.1 million from US$422.1 million. Excluding items, the company reported a loss per share of US$1.04, compared with analysts’ average estimate of a US$1.23 loss.

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