SEA Earnings Call: My Notes

SE Q1 FY21 Quarterly Earnings Call Analyst Questions
May 18, 2021 7:30 AM Central Time (SEA is a Singapore-based company)

For financial results and prepared remarks, see written results at

Analyst Q/A:

Q RE: ecommerce business in Brazil and drag on drag on EBITDA
A Very early in Brazil and continuing to observe the trends and focusing on growing the business. Too early to talk about drag on EBITDA.

Q Conditions in India during Covid. Do you see the spend increasing or negative impact on the business during this time.
A India will be a top grossing company. See rising pay ratio here. See this as very long runway. RE: Food delivery, they see Shopee engagement growing thru strong execution and user engagement. For food, they see it as a complementary offering to ecommerce here.

Q Shopee in Brazil and Latin America, please share how you see the rest of Latin America re:
A Too early to get too much detailed information there. Currently observing trends at this time.

Q Update on Shopee in Greater SE Asia. Sales and marketing spend was higher than expected, and was Brazil a key driver of this?
A Top line exceeded expectations, so as a percent, Sales was actually lower percent as a means of growing revenue. Runway is very, very high. Not a zero sum game, rather, their market leadership is growing and at a faster rate than their competitors, so they continue to invest in this an expect it will benefit shareholders in the future.

Q In the ecommerce business Ecommerce and
A Logistics, approach has been consistent by working w/ 3rd party logistics providers to increase the level of service in shipping and logistics. Implications of competitive mergers of ___ and ____ companies. 3 of the largest consumer ecommerce players actually expands the size of the pie and they think they stand in the best position of their competitors to expand their business.

Q Where do you see expanding user base further. Beyond Wallets, how will you expand this part of the business.
A See opportunity to expand their penetration rate and as they continue to expand their community engagement, they think there are ample opportunities to expand their user footprint. RE: SEA Money, they continue to focus on expanding this program that facilitates wallet usage and ecommerce platform and provide better service on top of which they can build additional wealth management and other financial related services.

Q RE: Ecommerce, give color re: which segment is doing best. In indoneasia as well and have you launched Free Fire Max and any color you can provide. Digital financial services: How much of $3.4B was related to ecommerce.
A Continuing to see hypercharged growth among all major markets and categories. This quarter’s results were the highest they’ve seen. Goal is to have different offerings for users with different preferences. RE: Gamer increases, they don’t pre-announce these. Best way to grow Shopee pay is to expand their ecosystem, which will drive this along with expanding offerings such as wealth management.

Q Gervina, why did margins decrease in light of business expansion. How prepared is SE to deal with this?
A Previously believed that EBITDA would be impacted. Overall, they think this will iimprove. RE: Covid impact, there has been a resurgence of cases in the SE Asia region. SEA is well prepared to deal with this and their teams have demonstrated their ability to do so in the past. With further proliferation of Covid, they expect people will further need their ecommerce services.

Q Please talk about gaming expansion in the US.
A Expanded usage and growth of SEA’s gaming services engagement in the US across age, gender, experience, etc. Seeing strong organic growth. In terms of gaming guidance, they will continue to observe the trends and adjust guidance as required.

Hope this is helpful information.


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