Sea Limited Is The Template For Mobile Gaming Success

On May 18, 2021, Sea Limited released its fiscal first-quarter 2021 results for the quarter ending March 2021. The Company reported an earnings-per-share (EPS) loss of (-$0.62) missing analyst estimates for (-$0.56), by (-$0.06). Total GAAP revenues rose 146.7% year-over-year (YoY) to $1.8 billion beating $1.68 billion consensus analyst estimates. Gross profits came in at $645.4 million , up 212.1% YoY. Total adjusted EBITDA was $88.1 million versus (-$69.9 million) in the year-ago same period. Digital Entertainment bookings rise 117.4% YoY to $1.1 billion. Quarterly active users (QAU) rose 61.4% to 648.8 million. Quarterly paying users rose 123.5% to 79.8 million representing 12.3% of QAUs versus 8.9% in Q1 2020. Average bookings per user was $1.70 compared to $1.30 for Q1 2020. Free Fire was the highest-grossing mobile game in Latin America, Southeast Asia, and India. E-commerce GAAP revenue was up 250.4% at $922.3 million. Adjusted EBITDA was (-$412.9 million) compared to (-$264.1 million) in year ago same period. Shopee ranked #1 in the Shopping category in Southeast Asia and Taiwan. SeaMoney’s offerings continue to see strong adoption and growth with mobile wallet total payment volume exceeding $3.4 billion in Q1 2021, up over 3X for Q4 2020. Quarterly paying users for mobile wallet services surpassed $26.1 million.

Sea Limited CEO Forrest Li, set the tone:

He spoke of the numerous philanthropic efforts pushed by the Company in Asia assisting the acceleration of COVID-19 vaccinations as well as helping small and medium-sized businesses. Their flagship Garena World event had an audience of 1.2 million with more than 40 million views from social media channels.

He went on:

CEO Li also pointed out how Shopee reported 1.1 billion gross orders, up 153% YoY and general merchandise value (GMW) of $12.6 billion, up 103% YoY as GAAP revenues also rose 250% YoY. Shopee is the leader in its largest market Indonesia. He concluded:

Using the rifle charts on the weekly and daily time frames provides a precision view of the playing field for SE shares. The weekly rifle chart shows a uptrend with rising 5-period moving average (MA) support near at $274.81. The rising 15-period MA is at $252.72. Shares peaked out near the $297.32 Fibonacci (fib) level forming a weekly market structure high (MSH) trigger on the breakdown below $269.77. There is also a secondary weekly MSH trigger under $225. The weekly market structure low (MSL) buy triggered on the breakout through $240. The weekly stochastic has a mini pup attempt at the 90-band.

The daily rifle chart is in a breakdown with a falling 5-period MA at $277.78 as the stochastic mini inverse pup falls to the 40-band. The daily lower Bollinger Bands (BBs) sit at the $255.49 fib. Risk-tolerant investors can monitor for opportunistic pullback levels at the $266.85 fib, $259.67 fib, $255.49 fib, $249.60 fib, $246.07 fib, $242.50 fib, $225.28 fib, and the $212.44 fib. The upside trajectories range from the $309.55 fib up towards the $379.04 fib level. Shares can be thinly traded with wide spreads so be sure to keep a stop-loss in place.

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