SINGAPORE, Singapore – 2021: A large shop logo at the entrance to the e-commerce platform headquarters in Science Park. (Exact date of photography unknown due to incorrect camera settings)
Kokkai | Istock unpublished | Getty Images
Shares of Southeast Asian e-commerce and gaming firm C Group popped up on Tuesday after losing first-quarter revenue analysts’ expectations.
Sea-based U.S. stocks rose 14% to close at .2 80.21 after Singapore-based Internet firm reported exceeding analysts’ expectations in the first quarter of this year.
Here’s how the New York Stock Exchange-listed company did between January and March:
- Revenue: $ 2.9 billion vs. $ 2.76 billion, according to analysts’ expectations, according to Refinitive.
- Net loss: $ 580.1 billion vs. $ 722 billion as analysts expect, according to Refinitive.
Sea revenue rose 64.4% from the same period a year earlier, but fell nearly 9.5% from $ 3.2 billion in the previous quarter, a sign that, after two years of epidemic-driven sales, growth is starting on the plateau.
It has grown even more slowly with the opening of online shopping platforms Shoppe and gaming arm Garena Countries.
The company warned that inflation and disruptions in the supply chain could affect business, even at a loss.
“As we enter a new era, we recognize that current macro trends and uncertainties could affect our region and the world in the near future,” said Forrest Lee, CEO and co-founder of Ocean at the Income Call.
Both Shopie and Garena, the two main money-making segments of the ocean, faced lower revenue than in the previous quarter.
The e-commerce revenue generated by Shoppe was $ 1.52 billion in the first quarter, down from $ 1.59 billion in the previous quarter. The loss was 810 million due to heavy logistics and marketing costs – $ 131 million less than in the previous quarter.
The company revised its full-year revenue guidelines for Shopie from $ 8.5 billion to $ 9.1 billion, citing “advanced macro uncertainty.”
Yanjun Wang, chief corporate officer at Sea, noted that the agency was not reducing its guidelines, but was widening it as a precautionary measure. Its previous guidance was $ 8.9 billion to $ 9.1 billion.
But according to Christine Lau, an analyst at research firm Third Bridge, the amount people spend on each order can be downward.
“The effect of inflation on discretionary spending is one,” he said, referring to unnecessary items such as entertainment and luxury goods.
“For a lot of high-frequency items or necessities that people had to buy online – either it was offline offline or it was more understandable to use the shop when everything was in lockdown – I think a lot of that would be redistributed to offline retail,” he said. Lau added.
Garina, the longest-serving offshore profit maker, has sold 1.1 billion. Gaming Arm’s net profit rose 52.2% (or 432 million) over the same period a year ago, but down 23.5% (or $ 859 million) from the previous quarter.
Quarterly active users were down 32.9 million a year, while quarterly paying users fell more than 18 million to 61.4 million from 79.8 million a year ago, in line with concerns that there is now a weak demand for mobile games in the post-epidemic world. .
In India too, sanctions can cause a lot of damage. Earlier this year, India blocked Gariner’s hit mobile game Freefire, along with 53 other apps linked to China.
Chinese technology giant Tencent Sea is a major shareholder. In January, Tencent sold শেয়ার 3 billion worth of ocean shares, which fell 18.7% from 21.3%.
Sea shares have suffered losses due to larger tech sales. Its stock fell more than 80% from its October 2021 high when it reached $ 366.99. Prices fell to a two-year low of around $ 57 earlier this month.
Investors are also concerned about its cash-burning model, spending hundreds of millions, even billions of dollars, every quarter on marketing, especially to attract consumers and merchants to shop, which competes with Amazon, Alibaba’s Lazada in Southeast Asia. , And Latin American Mercado Libre.
The shop has a presence in 13 countries and is located in Southeast Asia, Latin America and Europe. It pulled its shoppy business from India and France in March this year, just months after entering the two countries.