Sea to post first profitable year since IPO: CEO

INTERNET company Sea, the parent of e-commerce platform Shopee, is on track to post its first profitable year since becoming a public company, chief executive Forrest Li told staff in a memo on Friday (Dec 22).

Sea, listed on the New York Stock Exchange, booked a profitable Q1 and Q2 this year but sank back into a loss in the third quarter ended September.

Li said the group will likely achieve its first profitable year in 2023, without revealing any details about Q4 financials.

Sea’s milestone comes as the company faces its fiercest rival yet. Earlier this month, TikTok’s e-commerce unit staged a comeback in Indonesia by striking a deal with the country’s biggest tech company GoTo.

Shopee will be going up against the merged entity of Tokopedia and TikTok Shop Indonesia, which more than doubled its market share to 11 per cent this year.

Sea’s efforts to retain and grow its e-commerce market share forced it to begin reinvesting in growth halfway through the year. The move dragged the company back into a loss of US$143.9 million last quarter, upsetting analysts who had predicted a consensus profit of US$102 million.

“Competition remains intense, and we are still actively strengthening our market leadership… I see 2024 as being a year we can thrive in, especially since we are entering it from a position of confidence and financial strength,” Li said in an e-mail seen by The Business Times, without naming specific competitors.

He added that by November, the group saw early gains from its reinvestments in growth, and increased its cash position for the quarter after prudent management.

Shares in Sea, which also operates a gaming unit and a financial services arm, have plunged nearly 90 per cent from an October 2021 high.

The group’s counter closed at US$37.97 on Thursday, up 8.2 per cent or US$2.86.