Entering text into the input field will update the search result below

Love Of Sea In The Time Of COVID-19

Mar. 06, 2020 12:43 PM ETSea Limited (SE)TCEHY12 Comments
Nick Cox profile picture
Nick Cox


  • Sea's three operational areas of online gaming, online shopping and digital financial services are favorable in this virus emergency environment.
  • Short-term indicators of company are satisfactory and long-term indicators are very promising.
  • Q4 results showed continuing financial improvement but online shopping subject to continuing cost increases.
  • Application for Digital Banking Licence in Singapore a promising further revenue possibility.
  • There are other companies where forthcoming developments in China might make them Buys at this stage but Sea is the lowest risk in my estimation.

The old mantra is "sell in May and go away". Those who adopted "sell in February and remain very wary" will be pleased with themselves. The best advice in this viral epidemic may well be just to hunker down and wait for the epidemic to come under control.

For those of a more adventurous bent there are options. The best Asia play I know would be for Sea Ltd. (NYSE:NYSE:SE). Its triple focus on online gaming, online shopping and digital financial services is about as good as you can be in this crisis. There is likely to be a "stay at home" economy for months to come.

Its recent results have been impressive. Its "Garena" gaming platform and its "Shopee" platform have gained a lot of traction around Asia.

It has applied for a digital banking licence in Singapore. It is one of 21 companies to do so and it is expected that 5 will be chosen. The company hopes its existing financial services division will be a persuasive factor. Its Singapore domicile may also help.

There are other possible COVID-19 plays with Chinese connections which I mention briefly below, but Sea is the most promising.

Sea the Company

My article in January emphasized how the Q4 earnings would tell us a lot more about progress towards profitability on its loss-making shopping platform. The article also detailed the advantage the company has through its focus on the growth areas of S-E Asia in particular. Its backing from Chinese giant Tencent (OTCPK:TCEHY) is a great source of financial strength and future growth. This should not be under-estimated.

As elsewhere around the world, Tencent and Alibaba (NYSE:BABA) are fighting it out through client companies. This is a bit like the colonial empires of old dealing through client States. Tencent seems to be winning

This article was written by

Nick Cox profile picture
Nick Cox is a long-time entrepreneur and investor,currently living in Singapore.He has lived and worked in the Asia-Pacifci region for many years.He is a graduate in modern history and economics from University College,London University. His investment strategy is centred around finding long-term growth companies in the region based on inspiring Management and businesses at the cutting edge of new growth areas. Asia is the leading driver of worldwide economic growth today and for the medium term.

Analyst’s Disclosure: I am/we are long SE TCEHY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (12)

I was initially bullish on ecommerce, mobile gaming when covid19 broke out. However, after the data came out on IQiyi, Alibaba and JD, I realize that I was mistaken (and the market is right to sell off all these names). What happened is that even though people are stuck at home and spend more time on the phone, they end up spending LESS. They play more games but spend less, because they have less income. They bought a lot more groceries and essentials (FMCG) but bought less discretionary items like clothes, beauty, electronics. So all the ecommerce platforms will see lower profit during virus lockdown. Gaming will also see lower revenue (even though with more hours played) and Online ad revenue and movie subscriptions will fall. This was the reality for China during its lockdown and it will be the reality for Europe, US and SE Asia as they go through their lockdown now.
Nick Cox profile picture
@ursa warrior
Your point is a good one.
I don't really agree with it but it is too early to say if you are right or I am right.
It's a trade-off between people spending more time on gaming and online shopping,against whether they will have enough money to spend on these items if they are out of a job.
nope i was totally wrong, nick
A buddy from mine sold half of his portfolio about 2 weeks before stuff hit the fan.

As for Sea, I agree. Buy.
Nick Cox profile picture
With this corona virus its tough to make short term clever buys but long term SE should be very strong, so I reckon it's good to buy now but even better to buy in a few weeks time as I reckon the virus will hit stock markets a lot more the next couple of weeks...but no-one knows of course.
@Nick Cox How much lower do you think that sea will go?
Nick Cox profile picture
I don't think there is any intelligent way of assessing the market during this corona virus.I do think it will be a lot worse than most people think.I also think that SEA will continue tone less badly hit than most stocks.
Se is a good company that gets little media attention
Nick Cox profile picture
Yes it does not get much media attention, even in Singapore in fact.
Yeah, I'm a Singapore Local and only recently i know This company is listed.
I'm long SE. The growth here is real without the virus
Nick Cox profile picture
I agree.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.