Key insights
- The author is long Sea Ltd (SE) and seeks a bear case perspective. Bullish points include strong revenue and net income growth, profitability across all segments, Shopee's e-commerce dominance in Southeast Asia, and Monee's loan book growth. Concerns involve competition from TikTok Shop, Monee's aggressive credit expansion, and the stock's historical volatility. Upcoming earnings on May 12th are a key event.
Been holding SEA for a while now and down about 24% on my position. Rather than panic selling I've been doubling down on the thesis. Curious what the bears think.
Why I'm holding:
Revenue grew 36% to $23B in 2025, net income up 260% to $1.6B. All three segments profitable simultaneously for the first time. Shopee has ~60% of Southeast Asian e-commerce, a market going from $159B to $350B GMV by 2030. Monee's loan book grew 80% with NPLs stable at 1.1% which honestly impressed me. Garena is printing cash at 54% EBITDA margins from a game people said was dying. İ understand Garena might become less important but İ believe Monee and Shopee will pick up the slack.
Generally, İ am also convinced that Southeast Asia will go through quite some growth, and that SEA might be poised to take a nice position as a local tech stock when the massive population in Southeast Asia will improve economically.
The Q4 selloff that crushed the stock was driven by a tax expense miss, but not really business deterioration as far as İ understand. The actual operations beat expectations across the board.
What concerns me:
TikTok Shop is growing faster than Shopee in percentage terms. Monee's credit expansion is aggressive and could bite in a recession. And the stock has a history of being wildly mispriced in both directions. İ did talk to 2 friends from İndonesia who both prefer Shopee over TikTok Shop, but that's very limited data İ know.
What am I missing?
Happy to be wrong, just want to understand the bear case better before adding more. Excited/scared of earnings may 12th