Why does SE turn losses into profits?
DBS $DBS Group Holdings(D05.SG$ has maintained “buy” with an unchanged target price of US$100, implying a potential upside of 25 per cent. The research team noted that Sea is trading at an enterprise value which is 2.8 times its sales and is also trading at a 35 per cent premium to $Grab Holdings(GRAB.US$. This is because Sea achieved Ebitda breakeven earlier and has a superior Ebitda margin potential.
New York-listed Sea posted US$422.8 million in net income for the fourth quarter ended Dec 31, reversing from the US$616.3 million loss recorded in the year-ago period.
This was partly due to a US$199.7 million net gain on debt extinguishment, and a reversal of US$130 million in previous accruals for certain expenses, amid aggressive cost cuts and layoffs over the past year.
Overall sales and marketing expenses had also fallen by 61.2 per cent year on year to US$474 million, on top of sequential improvements in research and development spending and headquarter costs.
Last week, CGS-CIMB predicted that Sea would achieve better-than-expected Ebitda for the fourth quarter of fiscal 2022, but only expected the group to hit Ebitda breakeven by Q2 2023.
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gary guoli : layoffs+Reduce expenses
yokimOP gary guoli: that‘s right