Another star stock has suffered a sharp drop in stock price under the impact of rate hikes and balance sheet reduction. This time it's Southeast Asia's mini Tencent SE. Since its listing in October 2017, Sea's stock price has been skyrocketing, with a growth of over 23 times in 4 years and an annualized return rate as high as 120.44%. However, since October 20th last year, Sea has plummeted by nearly 70%, seeing it rise to great heights only to come crashing down.
From a performance perspective, SE is still in a high-speed expansion phase, with growth rates exceeding 100% in each of the 13 quarters since its listing, making it a solid super growth stock. However, along with the company's rapid expansion, net losses have increased each quarter, and operating cash flow has deteriorated again in recent quarters as the company aggressively expands into South America, Europe, and other businesses. This is the core reason why the company's stock price has been under continuous pressure recently. In a tightening environment, the market has clearly shown a tendency to abandon companies that are still aggressively burning cash for expansion, and SEA, which is still increasing its losses, is under severe pressure at this stage.
Since the third quarter, from a fundamental perspective, SEA's gaming and e-commerce departments have indeed been on a downward trend.
In the third-quarter report, the user growth rate of the gaming department was almost stagnant. The poor performance in the third-quarter report was reflected in the gaming business (significant decline in revenue growth), with the flat growth of active users compared to the previous quarter being the core reason for the stock price decline after the third-quarter report; and due to the increasing impact of the supply chain, the...