Sea Limited (SE) - Sum-of-parts Valuation, Simple to Complex.
Garena against gaming publishers and developers, Shopee vs 3P and 1P ecom, Monee vs old and new digital banks' loan portfolio and delinquency. Dis: 55% of PA and 22% of SWI.
First of all, Sea Limited's value lies in its ecosystem of three seemingly separate segments. One builds others, and new subsegments (logistics, advertising) are enriching the value it offers to end users.
Garena’s cash and mobile UX / UI built Shopee, an online marketplace for merchants and customers to exchange goods. Monee facilitates payments and adds credit to build more trust and enable more transactions. Logistics further improve convenience and trust. Emerging subsegments, such as advertising and VIP programs, add value to power-sellers and buyers.
Garena is perhaps the odd one out, but it provides stability for management to build Shopee and lay the foundation. Hence, if you remove any segment, the Sea’s ecosystem suffers.
As a result, this valuation is merely an estimate of the value of each segment if sold as a whole. I don’t think the value is worth as much if they are sold separately.
Let’s start
Sea Limited, a 55% position in my PA and 21% of the Sleep Well Portfolio, continued to perform, yet shares dipped 30% from their peak for reasons not aligned with my time horizon and thesis. As a result, I have given extra time to look into valuation to help me and SW investors know why they should be adding shares.
SWI’s SE coverage: [deep dive, 4th buy, 3rd buy, 2nd buy, 1st buy, tariff review, Q3’25, Q2’25, Q1’25, Q4’24, Q3’24, Q2’24 update]
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