Ride the new economy wave with SEA, says CGS-CIMB

With Southeast Asia rapidly treading down the path of digital transformation, CGS-CIMB analysts Ngoh Yi Sin and Darren Ong believe that technology firm SEA group is the best vehicle with which investors can reap the profits of the future economy. The pair have thus issued an “add” call on the US-listed stock with a target price of US$126.90 ($174.10). 

The company is divided into online gaming (Garena), e-commerce (Shopee) and digital financial services (SeaMoney) arms, expanding its presence in the internet world’s hottest business trends. The company has built on its mobile-led strategy, strong content localisation capabilities and backing from Chinese tech unicorn Tencent to build gross merchandise value (GMV) market share and diversify into new markets in India and Latin America. 

The core of SEA’s growth comes from Garena, its most established business arm and a leading name in the regional gaming world. It is the exclusive operator and distributor of popular games, including Free Fire, Call of Duty: Mobile and the console version of Dauntless. Its success with Free Fire, -- its first self-developed gaming title developed in 2017 --  is a key positive for its gaming pipeline as it became the most downloaded mobile gaming title in 2019.