Starting a SE thread

Here’s the current thread for my June review: https://discussion.fool.com/stocknovice39s-june-portfolio-review….

Since the last few replies have started to veer off into a discussion on Sea Ltd (SE), I thought I’d start a separate thread. I don’t know much about SE, but believe it has tentacles in payments, ecommerce and gaming. Doing a quick search (nice new search functions!), I found this thread from May 2020:

https://discussion.fool.com/a-look-at-sea-limited-se-34520074.as…

and another from July 2019:

https://discussion.fool.com/sea-ltd-se-great-performance-high-ri…

Since the stock has already been reviewed in depth here a couple times, please read these first before we keep digging this rabbit hole. I know I passed on it the first time around because I’m not interested in a foreign company. However, that doesn’t mean it’s not worth discussing for others. I just want to make sure whatever discussion we do have isn’t simply a repeat of tidbits that have already been hashed out.

Carry on…

29 Likes

I looked into last month because of a dividend notice I read. However I see it’s in China and I don’t trust any financials coming from them, so I will pass it on to other brave souls.

Lucky Dog

5 Likes

However I see it’s in China and I don’t trust any financials coming from them, so I will pass it on to other brave souls. – Lucky Dog

Singapore is most definitely NOT China.

From Wikipedia: “For several years, Singapore has been one of the few countries with an AAA credit rating from the big three, and the only Asian country to achieve this rating. Singapore attracts a large amount of foreign investment as a result of its location, skilled workforce, low tax rates, advanced infrastructure and zero-tolerance against corruption.”

Nevertheless, I would not assume any company is lily pure.

Rob
Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

22 Likes

If Singapore being in China was only reason you wouldn’t invest, I’d maybe revisit that?

New York city is closer to being in Los Angeles than Singapore being in China. Now if don’t trust foreign companies, okay.

We all have are specific criteria within our broad based criteria.

Long SE 4%

2 Likes

FYI Singapore

Singapore is the 4 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International.

https://tradingeconomics.com/singapore/corruption-rank

3 Likes

Sorry should have included I have a 7% position in Se after a gain of 127% YTD.

2 Likes

Singapore is the 4 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International.

https://tradingeconomics.com/singapore/corruption-rank

And just for comparison, the U.S. is ranked 23rd: https://tradingeconomics.com/united-states/corruption-rank

7 Likes

In the interest of returning this to a deeper exploration of SE I wanted of offer the following:

SE is on the shortlist for a digital banking license in Singapore, and the only one applying for the “full bank” license that is not part of a consortium.

I haven’t seen any discussion of this elsewhere and since this will be decided before the end of this year seems like a very meaningful opportunity for SE

-About-
MAS ( Monetary Authority of Singapore) will issue up to 5 digital banking licenses: 2 digital full bank and 3 digital wholesale bank licenses.

"The 2 digital full bank licensees will allow non-banking entities to take deposits from retail customers.

Meanwhile, the 3 digital wholesale bank licenses will enable the companies to serve small and medium-sized businesses and other non-retail segments"

The article also a provides some brief information about the different applicants: https://www.smallcapasia.com/digital-banking-singapore-who-a…

And this has a nice visual of the applicants

https://blog.seedly.sg/singapore-digital-bank-licenses/

-opportunities-
This seems like it offers good synergy between the e-commerce and epay components. As far as the paid-up capital, with the recent run-up in the share price it seems like this would be very feasible:

“The online-only banks are expected to operate at lower costs and offer services that differ from local incumbents. Retail bank license holders will need S$1.5 billion ($1.1 billion) in paid-up capital.”

https://www.reuters.com/article/singapore-banks/update-2-gra…

-anecdotally-
I am based in Thailand and the usage of mobile ‘everything’ (banking, payment, games) is so different from what I’ve experienced in the United States.

Thais across education and socio-economic levels use their phones for ‘everything’. Furthermore, nearly every merchant, from street vendors to mall stores, accepts epay.

There has been some discussion on this board and elsewhere about SE being spread too thin between its three major components: epay, games and e-commerce. I don’t feel this is a liability at all since it actually reflects consumer patterns in Southeast Asia and demonstrates that there is an ecosystem across these components that SE is capitalizing on.

The recent buy sell hold segment in
TMF premium videos on SE featured some insights from a user in the Philippines who said that there isn’t really an alternative for delivering to all the islands there. A friend who lives in Taiwan has told me that he gets almost everything, including groceries on Shopee. He also said that many of his students are on shopee as merchants as part of a student project.

As far as Lazada (Alibaba) vs Shopee in Thailand, most people have accounts for both and use them interchangeably

Hope this spurs some further discussion and analysis!

More info
https://www.businesstimes.com.sg/banking-finance/14-digital-…

18 Likes

I will add that, in Taiwan, there is a strong anti-Chinese sentiment. Therefore Shoppe will continue to hold the online shopping market in Taiwan over Chinese based companies such as TaoBao and Lazada. There is an older local platform called Ruten, but it has failed to keep up with the user experience as SE has done with Shoppe.

SE Asia aficionado, Jeffery Townson, has a wonderful, in-depth analysis of the Shoppe user experience, “Can Shopee / Garena Beat Lazada? Tencent vs. Alibaba In SE Asia.” (https://jefftowson.com/membership_content/can-shopee-plus-te…)

When I speak with local Taiwanese about Shoppe, the most often answer is “oh, I am always on Shoppe.” Jeffery Town explains in his podcast above the strategies that Shoppe is using to keep the user engaged on the app, taking from plays in the immersive video gaming arm and Tencent. It also seems that the CEO has very high credibility.

SeaLimtied in SE Asia appears, to me, to be a positive, perfect storm of success. Taiwan still remains to be a cash-based culture; but I suspect that will rapidly change with the powerful incentives/rewards that card and contact payments entice consumers with.

Finally, Shoppe is building quite a brand. They sponsor a Taiwanese baseball team. I have come across online profiles of smart, young Taiwanese that work for Shoppe locally. The infiltration, at least in Taiwan, is strong and growing.

10 Likes