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Sea, owner of Shopee e-commerce platform, reports wider loss after Tencent cuts stake, Temasek and Bridgewater jump in

  • Shares of Sea Limited tumbled after second-quarter loss widened, firm suspends guidance for e-commerce business citing macro risks
  • Tencent cut its stake in the Singapore-based firm in January, while Temasek and Ray Dalio’s hedge fund bought last quarter

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Shopee’s six-storey headquarters in Singapore. Photo: Handout
Cheryl Heng
Sea Limited, owner of Southeast Asia’s biggest e-commerce platform Shopee, recorded wider losses amid a myriad of market challenges. Its stock has slumped as Tencent Holdings sold, while big guns like Temasek Holdings to Bridgewater Associates jumped in.
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The Tencent-backed consumer technology group said net loss more than doubled to US$931.2 million in the second quarter, missing consensus estimates of about US$655 million based on Refinitiv data. Revenue jumped 29 per cent to US$2.9 billion, driven by a 51 per cent jump in e-commerce revenue.

Its American depositary shares tumbled 14 per cent to US$77.43 in New York overnight. They have plunged 65 per cent so far this year, erasing US$80.5 billion of its market capitalisation and substantially eroding the fortune of its billionaire founder Forrest Li Xiaodong.

Singapore-based Sea Limited declined to provide a fresh guidance on its e-commerce revenue for the full year 2022, citing increasing macro uncertainties. The group in May slashed its guidance to as low as US$8.5 billion from US$8.9 billion in March.

Forrest Li, chairman and group chief executive officer of Sea Limited, in a July 2020 file picture. Photo: Bloomberg
Forrest Li, chairman and group chief executive officer of Sea Limited, in a July 2020 file picture. Photo: Bloomberg

“We are in an environment of increased macro uncertainty, with rising inflation, rising interest rates, local currency depreciations against the US dollar and ongoing reopening trends,” Li, the group chairman and chief executive, said on its earnings conference call. “We think the right thing to do in this time of continuing heightened macro volatility is to prioritise efficiency and self-sufficiency.”

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CGS-CIMB analysts including Ong Khang Chuen downgraded the stock on Wednesday, lowering their target price to US$92 from US$150.

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