Sea Limited ($SE (-3.79%) ) is a versatile company from Singapore that has developed a super app has built a strong ecosystem of e-commerce, gaming and FinTech. After explosive growth in recent years and a subsequent fall in the share price, many investors are asking themselves: Does Sea Ltd still have potential for a turnaround?

Overview: What does Sea Limited do?

Sea Limited is active in three core areas:

✅ Shopee (e-commerce): One of the largest e-commerce platforms in Southeast Asia, Taiwan and Brazil. Competition for Alibaba (Lazada), Tokopedia and MercadoLibre.

✅ Garena (Gaming): Developer of the globally successful mobile game Free Fire. Formerly the engine of growth, now weakening.

✅ SeaMoney (FinTech): Digital financial services, including lending and payment processing, strongly integrated into Shopee.

Sea Limited pursues a vertical business model where the different divisions reinforce each other - Shopee drives SeaMoney, while Garena used to deliver high profits to fund expansions.

Competition: Who are the competitors?

🔸 Alibaba $BABA (-1%)
(Lazada.) & Tokopedia - Strong e-commerce competition in Southeast Asia.

🔸 Amazon
$AMZN (-2.23%) - A growing threat, especially in markets such as Brazil

🔸 MercadoLibre $MELI (-2.34%) - The market leader in Latin America and a direct opponent in Brazil.

🔸 Tencent $TCEHY (-3.14%)
& NetEase
$NTES (+2.65%) - Strong competition in the gaming segment, especially in China.

🔸 Revolut, Grab $GRAB (-0.89%)
& Ant Group - FinTech competitors that offer similar services.

Opportunities: Why could Sea Limited be a comeback story?

✅ E-commerce remains strong: Shopee remains the market leader in several Asian countries. Despite economic uncertainties, online retail is growing in the long term.

✅ SeaMoney as a silent winner: The FinTech segment is growing steadily and can become a new source of income for Sea Ltd through digital payment services and loans.

✅ Profitability focus: After years of aggressive growth with high losses, the company is now focusing more on cost reductions and profitability - a sign that Sea Ltd wants to operate more sustainably.

✅ Expansion in Latin America: Shopee has grown particularly strongly in Brazil. If the company can establish itself there permanently, that would be a big plus.

✅ Gaming as untapped potential: If Free Fire stabilizes or Sea Ltd develops new successful games, Garena could become a growth driver again.

Risks: What could continue to weigh on Sea Limited?

⚠️ Declining gaming sales:
Free Fire was once the biggest profit generator, but user numbers are falling. Without a new hit, Garena could continue to weaken.

⚠️ Competitive pressure in e-commerce: Alibaba, Tokopedia and Amazon are putting massive pressure on Sea Ltd in Asia and Latin America. Defending market share will be expensive.

⚠️ Regulatory risks: In Asia in particular, there are always new regulations for FinTechs and online retailers that could slow down Sea Ltd's growth.

⚠️ Macroeconomic uncertainties: Rising interest rates and weak consumer behavior could have a negative impact on business - both in e-commerce and in the lending business.

⚠️ Cost cutting vs. growth: Sea Ltd is trying to become more profitable while expanding into new markets. The balancing act between growth and cost control is not easy.

Conclusion: turnaround opportunity or value trap?

Sea Limited is still one of the most exciting technology companies in Asia. The focus on profitability is positive, but success depends heavily on whether the company can stabilize its gaming division and defend Shopee against the competition.

Those who believe in the long-term potential of the Southeast Asian market and are prepared to accept short-term volatility could find a promising turnaround in Sea Ltd could be a promising turnaround opportunity.

What do you think? Is Sea Limited on its way to a comeback or is it still a risky bet?🚀

Outlook for next week.

Monday

• Mizuho Financial Group ($MFG (-4.21%) ), XP Inc. ($XP (+4.89%) ), Sun Life Financial (SLF), Tyson Foods ($TSN (+0.25%) ) and AECOM ($ACM (-0.28%) ) present their quarterly reports are presented.
• Publication of the New York Fed Consumer Inflation Expectations (October).

Tuesday

• The Home Depot ($HD (-2.83%) ), Sumitomo Mitsui Financial Group ($8316 (-2.57%) ), Mitsubishi Financial Group ($8306 (-1.05%) ), Nu Holdings ($NU (+0.53%) ), Sea Limited ($SE (-3.79%) ) and Tencent Music Entertainment Group ($TME (-0.81%) ) report their quarterly results.
• Publication of the NFIB Small Business Optimism Index (October) and the Consumer Price Index (CPI) (October).

Wednesday

• Cisco Systems ($CSCO (+0.06%) ), TJX Companies ($TJX (-2.51%) ), Palo Alto Networks ($PANW (-0.4%) ), Target ($TGT (+0.04%) ), JD.com ($JD. (+1.91%) ), XPeng ($XPEV (+3.39%) ), Catalent ($CTLT ) and Tetra Tech ($TTEK (+3.77%) ) present their quarterly figures.
• Publication of the Producer Price Index
  (PPI) (October), the New York Fed Empire State Manufacturing Index (November), the Business Inventories (September) and the Retail Sales (October).

Thursday

• Walmart ($WMT (-4.12%) ), Alibaba Group ($BABA (-1%) ), Applied Materials Inc. ($AMAT (+0.51%) ), NetEase Inc. ($NTES (+2.65%) ), Ross Stores ($ROST (-2.32%) ), Warner Music Group ($WMG (+0.53%) ), NICE Ltd. ($NICE (+0.03%) ), Bath & Body Works ($BBWI (-7.22%) ), The Gap Inc. ($GPS (+1.92%) ), Macy's ($M (+5.2%) ) and Spire Inc. ($SR (+0%) ) present their quarterly reports.
• Publication of the Industrial Production (October) and the National Association of Home Builders Housing Market Index (November).

Friday

• BJ's Wholesale Club ($BJ (+2.9%) ), Atkore Inc. ($ATKR (-0.68%) ) and Spectrum Brands Holdings ($SPB (+0.73%) ) present their quarterly figures.
• Deadline for funding of the US government.
• Publication of the Housing Starts (October).

𝙈𝙖𝙧𝙠𝙚𝙩 𝙉𝙚𝙬𝙨 🗞️

𝙕𝙤𝙤𝙢 𝙖𝙪𝙛 𝙏𝙖𝙡𝙛𝙖𝙝𝙧𝙩 / 𝙋𝙖𝙮𝙥𝙖𝙡 𝙜𝙧𝙚𝙞𝙛𝙩 𝙖𝙣 / 𝙍𝙤𝙗𝙞𝙣𝙝𝙤𝙤𝙙 𝙫𝙤𝙧 𝙋𝙧𝙤𝙗𝙡𝙚𝙢𝙚𝙣

𝙀𝙭-𝘿𝙖𝙩𝙚𝙨 📅

Today is the deadline for Electronic Arts($ERT (+1.35%)), Goldman Sachs ($GOS (-2.85%)), Kraft Heinz ($KHNZ (+1.83%)), McDonald's ($MDO (+2.23%)) and Nvidia ($NVD (-0.92%)).

For dividend hunters today, Annaly Capital Management ($AAY) and Realty Income ($RY6 (+0.95%)) ex dividend.

𝙌𝙪𝙖𝙧𝙩𝙖𝙡𝙨𝙯𝙖𝙝𝙡𝙚𝙣 📈

Netease ($NEH (+2.65%)), Flatexdegiro ($FTK (+1.56%)) and Crowdstrike ($45C (-5.89%)) will open their books today. Especially Crowdstrike the analysts expect a lot.

𝙈𝙖𝙧𝙠𝙚𝙩𝙨 🏛️

𝙕𝙤𝙤𝙢 - $5ZM (-0.73%) The company was able to crack $1 billion in revenue in Q2 and report earnings per share of $1.36. Analysts were expecting earnings per share of only $1.16. The outlook, however, disappointed. For example, the IT company states that revenue will be lower in Q3, and user acquisition will also be more difficult. The first signs of this were already seen this quarter, as Zoom was able to win fewer lucrative major customers than expected.

𝙋𝙖𝙮𝙥𝙖𝙡 - $2PP (+2.42%) Attack on Robinhood ($7KY (-7.76%)). The payment service provider plans to open a stock trading platform for its US customers. However, to enable trading, the company first needs SEC approval. This can take up to three quarters of a year, which would indicate that PayPal is looking for a partner or an acquisition in this area.

A few weeks ago, PayPal already started to expand crypto trading on an international level.

𝙎𝙀𝘾 - The US Securities and Exchange Commission concretized the ban on a "payment for order flow (PFOF)" business model. Thus, according to Gary Gensler, chairman of the SEC, a ban is already on the table. This would now have to be tested and could then be presented as a recommendation.

In the PFOF model, brokers forward orders to larger houses because they often offer better prices on their own off-exchange trading platforms than an order on the stock exchange. According to Handelsblatt, Robinhood generates more than a quarter of its revenue with the PFOF model.

𝘾𝙧𝙮𝙥𝙩𝙤 💎

𝙉𝙁𝙏 - The "Rare Pepe" collection, which emerged in the mid-2010s, is finding buyers at staggering prices. For example, the Rare Pepe Nakamoto could change hands for 111 Ethereum ($ETH-USD (+2.49%)) it changed hands. At this point, that's €315,465. It is argued that the prices often arise because of the historical significance for the crypto market and reflect a part of the subculture.

Enjoy your Tuesday 😊

𝐂𝐡𝐚𝐧𝐜𝐞 𝐯𝐬. 𝐑𝐢𝐬𝐢𝐤𝐨? Trade-off between ambitious tech companies and a strong-regulatory government? The Chinese government is banning an entire industry from making money, and for investors, the question is what next? China is known for its tough education system and sense of duty, which makes education and thus e-learning a high priority in the Chinese market. According to iiMediaResearch and iResearch, e-learning revenue exceeded $60 billion in 2020, and the Corona crisis has pushed the e-learning market up to a 100 billion valuation. 𝐃𝐨𝐜𝐡 𝐆𝐞𝐥𝐝 𝐥ä𝐬𝐬𝐭 𝐬𝐢𝐜𝐡 𝐣𝐞𝐭𝐳𝐭 𝐝𝐨𝐫𝐭 𝐤𝐚𝐮𝐦 𝐯𝐞𝐫𝐝𝐢𝐞𝐧𝐞𝐧, as over the weekend the Chinese government reformed or away-regulated and announced to take away the business basis of e-learning platforms. According to this, companies that teach school curriculum programs are no longer allowed to make profits or go public. Furthermore, children under the age of 6 may no longer be taught at all and the programs must be discontinued.

News regarding economic intervention must always lead to a re-evaluation of one's portfolio. In the short term, many investors remain in the dark and the confidence to make money with China stocks, especially in the tech sector, has definitely disappeared. We do not like the interventions at all, of course, nevertheless, the strong correction can be used at the moment for optimistic investors and enter the Chinese market countercyclically. 𝐖𝐢𝐞 𝐛𝐞𝐰𝐞𝐫𝐭𝐞𝐭 𝐢𝐡𝐫 𝐝𝐞𝐧 𝐜𝐡𝐢𝐧𝐞𝐬𝐢𝐬𝐜𝐡𝐞𝐧 𝐌𝐚𝐫𝐤𝐭? 𝐒𝐞𝐢𝐝 𝐢𝐡𝐫 𝐢𝐧 𝐜𝐡𝐢𝐧𝐞𝐬𝐢𝐬𝐜𝐡𝐞 𝐓𝐢𝐭𝐞𝐥 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐞𝐫𝐭 𝐮𝐧𝐝 𝐰𝐞𝐧𝐧 𝐣𝐚 𝐰𝐢𝐞 𝐛𝐞𝐰𝐞𝐫𝐭𝐞𝐭 𝐢𝐡𝐫 𝐝𝐢𝐞 𝐚𝐤𝐭𝐮𝐞𝐥𝐥𝐞𝐧 𝐌𝐚ß𝐧𝐚𝐡𝐦𝐞𝐧?

A small video recommendation can be found here from CNBC, who conducted an interview with John Rutledge (Safanad Chief Investment Strategist):

https://www.youtube.com/watch?v=vsJnITbNpFU