Sea Predicts Sales Doubling as Online Shopping Boom Persists

Sea Ltd. expects e-commerce revenue to double in 2021, sustaining its torrid pace of growth as Southeast Asia’s most valuable company counts on regional online shopping demand to persist after the pandemic.

Revenue rose to $1.6 billion in the last three months of 2020 from $777.2 million a year earlier, Singapore-based Sea said Tuesday in a statement. Net loss widened to $523.6 million from $283.8 million.

Sea, backed by Tencent Holdings Ltd., has emerged as a stock-market sensation since its initial public offering in New York in 2017, as investors bet the company can establish itself as a leader in e-commerce and gaming in Southeast Asia. Among companies valued at $100 billion or more, the stock is the No. 1 performer in Asia since the start of last year and only trails Tesla Inc. globally.

It’s also trying to establish fintech as a third growth driver. Sea said Tuesday it’s acquired Composite Capital Management, a Hong Kong-licensed global investment management firm. The company will deploy $1 billion toward Sea Capital, a newly established platform to manage its overall investments. Composite Capital founder David Ma -- a former partner at Chinese private equity giant Hillhouse -- becomes Sea Capital’s chief investment officer, reporting to Sea Chief Executive Officer Forrest Li.

“Sea’s growth prospects remain promising, riding on the growing digital economy in the region,” Citigroup analysts led by Alicia Yap wrote. “Guidance could prove conservative.”

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Key Insights

The pandemic is helping to spur demand at Sea’s e-commerce business Shopee, with fourth-quarter sales increasing 178% to $842.2 million. Sea forecast 2021 revenue at Shopee of $4.5 billion to $4.7 billion, up from $2.2 billion in 2020.Hit mobile game Free Fire is fueling growth at Sea’s digital entertainment service Garena, whose sales last quarter rose 71.6% to $693.4 million.