$Sea Ltd(SE)$
Sustaining Profitability Trends
In the fourth quarter of 2024, Sea Limited reported a 37% increase in sales, reaching $4.95 billion, and an EPS of $0.39, surpassing expectations . The e-commerce segment, Shopee, experienced a 41.3% year-over-year revenue growth, contributing to a positive adjusted EBITDA of $152 million, a significant turnaround from a $225 million loss in the previous year. Management has expressed optimism for 2025, projecting a 20% growth in Shopee's gross merchandise value (GMV) while continuing to improve profitability .
Given the company's strong performance in 2024 and its strategic focus on profitability, it is plausible that Sea Limited can maintain its positive trajectory. However, sustaining this trend will depend on continued operational efficiency and market conditions.
Impact of Tariffs on Business Operations
Sea Limited's primary markets are in Southeast Asia and Latin America, regions less directly affected by U.S.-China trade tensions. While recent U.S. tariff announcements led to a temporary decline in Sea's stock price, the company's operations are not significantly impacted by these tariffs . In fact, Sea's competitors, such as Lazada and Temu, may face more substantial challenges due to their exposure to affected markets, potentially providing Sea with a competitive advantage .
Nevertheless, broader macroeconomic uncertainties stemming from global trade tensions could influence consumer spending and operational costs, which may indirectly affect Sea's business performance.
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