BofA upgrade $SE from neutral to buy this morning with TP $340 derived through SOTP valuation:

-E-commerce $240/share (valued at 1.4x EV/sales

- Gaming $70/share
(13x EV/EBITDA in line with global peers)

- DFS $30/share
Bull points:

1. Shopee Latam entry has been a success to date.

Now #1 in Brazil by MAU & app downloads, although $MELI still commands a higher market share.

Trajectory is in right direction for $SE
2. Growth acceleration in Shopee in SE Asia with rising take rates too
3. Free Fire continued strength - all time record month in May
4. Free Fire amassing incredibly high viewership in esports competitions

Multi year cash driver thesis from Free Fire firmly intact
5. Sea Money rapid growth with proliferation from SM platform with many global QSRs like $DPZ & $WEN adopting its e wallet payment services
BofA have been one of the few on the Street to be less positive on $SE for the last 6 months primarily on valuation grounds.

A change in sentiment from 1 of only 2 brokers to not have a Buy rating (Stifel being the other: Neutral $260 TP)

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More from @MrBuyside

24 May
Bob Farrell’s 10 Market Rules

These rules are particularly poignant in the current market climate

We had the fun over the last year & nobody believed these rules, but as history has told us on every single occasion, these rules always prevail

10 important rules 👇🏽👇🏽
1. Markets tend to return to the mean over time
2. Excesses in one direction will lead to an opposite excess in the other direction
Read 12 tweets
29 Apr

Revenue $108.5B vs Cons $104.51B

-Online Stores $52.90B vs Cons $51.54B
- Physical Stores $3.92B vs Cons $4.28B
- 3rd party Seller Services $23.71B vs Cons $21.69B
- Subs. Services $7.58B vs Cons $7.32B
- Other $6.91B vs Cons $6.16B
Segment results:
North America
- Revenue $64.37B vs Cons $63.12B
- Operating income $3.45B vs Cons $2.25B

- Revenue $30.65B vs Cons $28.14B
- Operating income $1.25B vs Cons $145.7M

- Revenue $13.50B vs Cons $13.23B
- Operating income $4.16B vs Cons $3.87B
Operating income $8.87B vs Cons $6.04B

Operating margin 8.2%
Cons 5.8%
Q1’20: 5.3%

Current unearned revenue $9.71B and $10.54B in Q4

Paid units +44% and +32% in Q4

EPS $15.79 vs Cons $9.54 🔥
Read 4 tweets
20 Feb
🏆📈24 Rules for Success & to have a long and happy life😁🏅

Richard Jenrette co founded the investment bank Donaldson, Lufkin & Jenrette in 1959 & spent 4 decades on Wall St

He died aged 89 & left behind in his desk 24 rules to succeed in finance & life titled “What I Learned”
1. Stay in the game
- That’s often all you need to do - don’t quit.
- Stick around! Don’t be a quitter!

2. Don’t burn bridges (behind you)

3. Remember- life has no blessing like a good friend!
- You can’t get enough of them. Don’t leave old friends behind, you may need them
4. Try to be nice and say thank you a lot

5. Stay informed

6. Study- stay educated
- Do you homework & KEEP LEARNING

7. Cultivate friends of all ages - especially younger

8. Run scared - over-prepare
Read 9 tweets
14 Feb
📈Ritholtz Rules of Valuation 📈

Barry Ritholtz has several simple rules he has accumulated on valuation, which will ring true for many investors

1. Overvalued stocks and markets can continue to get overvalued, often for a long time. Cheap stocks can get even cheaper.
2. Ratios such as price to earnings or price to book are merely pictures;

What you need to consider is the full context — the film version as opposed to pictures
3. Fair value is an abstract concept, which stocks just wave hello to as they career past on their way toward becoming dirt cheap or wildly overvalued.

However, I am hard-pressed to recall an extended period when stocks stayed at fair value for any appreciable period of time.
Read 8 tweets
24 Jan
1/ The Law of Diminishing intent states that:

“The likelihood of doing something diminishes the further away you get from the initial moment of inspiration”
2/ As we have moved from 2020 into 2021, with the changing of the Gregorian calendar many people set out with new goals and new inspirations. But the reality is most end up in same old routines & look back 12 months from now and realise those big ambitions set in January had not
3/ been realised to their full potential. Why is this the case...?
It largely comes down to inaction; “I will start on Monday...I will start next week...I’m too busy right now but will make a start when I have some free time...”
Read 13 tweets
15 Jan
Twitter is the best global platform to experience and study a huge array behavioural finance biases, because they are on display in such a prevalent manner!
🚨Which behavioural finance pitfalls can you identify with? Here are some common examples🚨 /1
👏🏼 Overconfidence/ self attribution bias- (“stock x is up 50% in 3 days, I was pounding the table on this last week, kudos to everyone taking my advice”, inserts meme)

🐄 Herd Mentality- (popular tweeter: “I like this stock”....Herd: “never heard of this one, I like it too”) /2
📈Illusion of Control bias- (“my newsletter made a stock pop 20%”)...unlikely given institutional flows are 85% on said stock and I doubt institutions are reading a twitter newsletter /3
Read 12 tweets

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