Shopee, Garena Free Fire Stock up 421% in 2020

"Stonks Only Go Up" ~ Dr Parik Patel

SEA Limited is the most valued company in Singapore with a market cap of around $140 Billion dollars which it achieved in just 10 years. In this newsletter, I will be writing about how SE Stock increased by around 400% in 2020 and and where it will go from now and whether it could it reach a trillion dollar market valuation in the next 10 or even 5 years.

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Quick Summary

Sea limited is a company founded in 2009 by Forrest Xiaodong Li in 2009. They started off as a game development company under the name "Garena" and Garena is home to many popular games such as Garena Free Fire released in 2017 and Call of Duty Mobile first released in 2019.

Garena Free Fire been downloaded over 500 million times making it the third most downloaded game of all time.

Under Sea Limited, there is also an E- commerce company called Shopee.

Shopee was first launched in Singapore in 2015 as a social first and mobile centric marketplace where users can browse, shop and sell.

It serves users mainly in Southeast and East Asia. Shopee has doubled its revenue year on year from 2017 and it is estimated to have hit 3.5B in revenue in 2020 alone which is crazy.

Sea Limited is also backed by Tencent which now has a 20% stake in the business. Tencent is a Giant Chinese corporation valued at almost a trillion dollars.

Sea Limited has increased by 500% in the past year alone and has a market cap of $140B which is insane. It looks like it is going to become the Tencent, Amazon and AliBaba of South East Asia

E - Commerce Shopee Analysis

Limited looks like it is going to increase especially as Shopee and Garena Free Fire continue to dominate the market. Shopee has increased especially so because of increase in e-commerce during the pandemic and managed to beat out its competitors to become the number one ranked app in the shopping category because of its very unique and effective marketing initiatives.

Although the 4th quarter earnings has not been revealed yet, if we take a look at previous quarters in 2020, we can see that total sale and marketing expenses especially for Shopee was up by 54% in q4 to $307 Million US dollars.

It has been estimated to spend 1.7B dollars on sales and marketing in 2020. This is quite crazy as amazon spends 22B in advertising with 386B in revenue but SE spends almost 2B in advertising with just around 1.5B in revenue from Shopee alone but with a combined revenue of 3.5B. And while Shopee spends a crazy amount of money on marketing, it has played out well.

Mobile Game - Garena Free Fire Analysis

When we take a look at the Free Fire game that Garena makes, we also see that it has performed incredibly well in 2020. Free Fire was the highest grossing mobile game in Latin America and and in Southeast Asia throughout 2020 and these are places with a huge amount of people. Latin America has a population of 650M while SEA has a population of around 672M.

Also if you take a look at YouTube Gaming Stats, the most watched game in the world is Free Fire beating GTA 5 and Fortnite while being right behind Roblox and Minecraft. This game could soon end up becoming more popular than Roblox and Minecraft at current rates which is quite insane to think about.

And so the question is, is SE a great company that would become the next Tencent , Amazon or AliBaba in South East Asia? Based on the data available, SE limited is such a great company and it would'nt really surprise me if it ends up having a trillion dollar market cap within the next 10 or even 5 years with the amazing work done by its founder/CEO Forrest Li who started this company in 2009 and now its the most valued company in Singapore and all of SEA.

I would recommend you to checkout this video to learn more about the interesting life of Forrest Li and Shopee and the lessons that can be learned.

Stay Epic! ✌🏽

Sharvesh

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