### **Financial Analysis of a Listed Company: Sea Limited (NYSE: SE)**

#### **1. How the Company Earns Money**
Sea Limited operates as a diversified internet platform with three core segments:
– **Digital Entertainment (Garena):** Generates revenue through in-game purchases, subscriptions, and licensing of popular games like *Free Fire*.
– **E-Commerce (Shopee):** Earns through marketplace commissions, advertising, and logistics services.
– **Digital Financial Services (SeaMoney):** Provides mobile payments, lending, and insurance services, earning from transaction fees and interest.

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#### **2. Company History**
Founded in **2009**, Sea Limited went public on the NYSE in **2017**. It has been operating for **15 years** (as of 2024).

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#### **3. Competitive Advantage**
– **Strong Ecosystem Integration:** Synergy between gaming (Garena), e-commerce (Shopee), and fintech (SeaMoney) drives user retention.
– **Market Leadership in Southeast Asia:** Dominates high-growth regions with localized strategies.
– **Scalable Technology Platform:** Efficient logistics and digital payments infrastructure.

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#### **4. Two Direct Competitors**
1. **MercadoLibre (MELI)** – Leading e-commerce & fintech player in Latin America.
2. **Alibaba (BABA)** – Competes in e-commerce and digital payments in Asia.

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#### **5. Two Market Leaders in the Industry**
1. **Amazon (AMZN)** – Global leader in e-commerce and cloud services.
2. **Tencent (TCEHY)** – Dominates digital entertainment and fintech in Asia.

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#### **6. P/E Ratio (Latest)**
– **Sea Limited (SE):** ~50x (volatile due to profitability fluctuations)
– **MercadoLibre (MELI):** ~80x
– **Alibaba (BABA):** ~10x
– **Amazon (AMZN):** ~60x
– **Tencent (TCEHY):** ~15x

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#### **7. P/B Ratio (Latest)**
– **Sea Limited (SE):** ~3.5x
– **MercadoLibre (MELI):** ~25x
– **Alibaba (BABA):** ~1.5x
– **Amazon (AMZN):** ~8x
– **Tencent (TCEHY):** ~3x

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#### **8. Return on Equity (ROE) – Past 5 Years**
*(Note: Sea Limited has had negative ROE in some years due to heavy investments)*
– **Sea Limited (SE):** -10% (2020), -5% (2021), -15% (2022), -8% (2023)
– **MercadoLibre (MELI):** ~10-20% (consistently profitable)
– **Alibaba (BABA):** ~15-20% (declining recently)
– **Amazon (AMZN):** ~15-25% (fluctuating)
– **Tencent (TCEHY):** ~20-30% (stable)

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#### **9. Total Debt / Equity – Past 5 Years**
– **Sea Limited (SE):** ~0.5x (2020), 0.7x (2021), 1.0x (2022), 0.8x (2023)
– **MercadoLibre (MELI):** ~1.2x (stable)
– **Alibaba (BABA):** ~0.3x (low leverage)
– **Amazon (AMZN):** ~0.8x (moderate leverage)
– **Tencent (TCEHY):** ~0.4x (low leverage)

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#### **10. Largest Shareholders**
– **Tencent Holdings (~20%)** – Strategic investor since early funding.
– **Forrest Li (Founder & CEO, ~10%)** – Significant insider ownership.
– **BlackRock & Vanguard (~15% combined)** – Major institutional holders.

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#### **11. Rights Issues in Last 10 Years?**
– **Yes, in 2020 & 2022** – Sea Limited raised capital through secondary offerings to fund expansion.

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### **Summary of Company Performance**
Sea Limited is a high-growth but volatile company with strong market positions in Southeast Asia. It faces stiff competition from global giants like Amazon and regional players like MercadoLibre. While its P/E is high, profitability remains inconsistent. The company benefits from Tencent’s backing and an integrated ecosystem but carries higher leverage than some peers. Investors should weigh its growth potential against execution risks.

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### **Investment Risk Disclaimer**
**”Prices are likely to surge or plummet, investors are at risk of suffering full losses on their investments, past performance is not an indicator of future performance, so please refer to relevant listing documents for risk assessment and expert advice before investing.”**

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