$SE SEA Group – Insane earnings. Good Southeast Asia/Brazil exposure

$SE just had a monster quarter, seems like they took a beating due to a few quarters of horrendous earnings misses. A few things that stood out to me in the latest earnings/strategic commentary:

1. Re-accelerating growth, crazy beat on topline. TikTok did NOT kill them
2. Profitability ok despite tough TikTok competition. Over the last year where TikTok basically caught up in share in key markets and Forrest & Chris in the earnings call said that they needed to reinvest for share gains, which the market hated since they interpreted it at growth at all cost. But now they showed that they can still grow while growing the bottom line and maintain share. Doesn’t seem like a zero-sum game anymore and long-term a duopoly is emerging
3. Consumer flywheel is working, Monee + Shopee is an obvious one. Enable financing so can buy more stuff on your platform. I.e. the typical America consumerism playbook. They‘ve also started to do some smarter collaboration w/ Garena and targeting their younger gamer base (new traffic & audience expansion for Shopee)
4. SEA exposure, VN is one of the fastest growing economies right now and one of their key markets (10% GDP growth target this year). It‘s a good international portfolio hedge

It‘s currently at ~$97 in after-hours (still 50% off 1 year highs) but with current levels likely to run $100+ easily. Targeting $150+ for my exit.

What‘s most interesting to me about SE is that the market is waiting to see whether TikTok would kill Shopee and they revert back to their ‚growth at all cost‘ operating mode, but seems like they‘ve been able to hold share quite well for the past quarter (mainly Lazada / other local players losing share to TikTok). So long-term it‘s a strong story if the duopoly emerges and margins stop compressing. They‘ve also successfully been able to continue to improve their take rates with aggressive seller fee increases without affecting their topline, so perhaps we haven‘t reached the seller take rate ceiling yet.