Tencent-backed Sea’s sales double in 2Q

by BLOOMBERG/ pic credit: Sea Ltd

SINGAPORE • Sea Group Ltd, the Singapore-based Internet company backed by Tencent Holdings Ltd, said revenue doubled in the second quarter (2Q), driven by strong growth at e-commerce platform Shopee and gaming arm Garena.

Its stock gained about 8.6% in pre-market trading in New York after reporting total revenue rose to US$882 million (RM3.69 billion) in the three months ended June. Its net loss widened to US$393 million from US$280 million.

The robust topline numbers underscore how Sea became the world’s best-performing large-cap stock over the 18 months to August, stoking debate over whether the gaming, e-commerce and payments company is the next Internet colossus or Exhibit A in a tech bubble destined to burst.

Swelling optimism the loss-making company may one day become both the Tencent and Alibaba Group Holding Ltd of South-East Asia boosted its New York shares by more than 880% during that period.

Revenue at Garena rose to US$384 million from US$229.5 million, fuelled by the popularity of Free Fire, the first self-developed hit game at the company.

Revenue at Shopee and other services climbed to US$364.7 million from US$165.7 million.

SeaMoney, the company’s digital financial unit, gained traction, with mobile wallet total payment volume topping US$1.6 billion during the quarter. There were 15 million paying mobile wallet service users.

Sea’s total sales and marketing expenses in the 2Q increased 95% to US$386.3 million.

Shopee registered more than 260 million orders in Indonesia in the 2Q or a daily average of over 2.8 million orders, up 130% from a year ago.

Shopee also ranked first in Indonesia by average monthly active users, downloads and total time spent in the app on Android in the shopping category, according to App Annie.

Sea’s US depositary receipts, which have gained 234% this year, closed at US$134.28 in New York on Monday.