Sea Limited
Background The bull case narrative for SE is known -- SE will win the food fight and dominate the South East Asia eCommerce industry. However, while the narrative is out there, it is unclear how that ties to the ultimate financials and valuation. Is this company still attractive at a $25bn valuation? $40bn valuation? In order to better understand the risk reward, we need to tie the narrative to the financials. This blog post is focus on this. My approach uses a combination of analog and market size estimate to triangulate the company's future earnings profile. Framing Shopee’s upside Formula: E-commerce TAM × Shopee Market Share → GMV × Shopee Take Rate → Shopee Revenue × NTM EV/Revenue Multiple → Shopee’s Value E-commerce TAM I believe that the TAM will be about $122bn in 2025. This was estimated through a combination of third-party sources ( LINK ) and analog in other regions. Note: Taiwan est. TAM ~20bn in 2025 ...