Sea Ltd. jumped 9% after reporting a doubling in revenue, providing more ammunition to investors betting the Singaporean company backed by Tencent Holdings Ltd. could become the next Asian internet colossus.

See also: At $65.5 bil, loss-making Sea overtakes DBS in market value and DBS and Sea: Two ends of a barbell?

Sea’s total revenue rose to US$882 million ($1.20 billion) in the three months ended June, driven by growth at e-commerce platform Shopee and gaming arm Garena. Its shares gained their most in a month even though it reported net losses widened more than 40% to US$393 million, cementing its position as the world’s best-performing large-cap stock over the past 18 months.

See also: The world's hottest stock is a money-losing tech giant soaring 880%

Swelling optimism the loss-making company may one day become both the Tencent and Alibaba of Southeast Asia boosted its New York shares by more than 810% during that period. That amazing rally, which has minted three billionaires over the course of its run, has stoked debate over whether the gaming, e-commerce and payments company is the next internet colossus or Exhibit A in a tech bubble destined to burst.

See also: How Singapore nurtured foreign trio who became billionaires

“This gives us further confidence that the rapid shift to digital lifestyles is, in fact, a permanent and irreversible change that will drive significant growth opportunity for Sea over the long run,” Chief Executive Officer Forrest Li said on a conference call on Tuesday.

Since its initial public offering in New York in 2017, Sea has been encouraging investors and analysts to focus on financial metrics that are not in compliance with the generally accepted accounting principles, or GAAP. Sea’s executives have said in the past it was aimed at helping its investors evaluate its operating performance. Executives said Tuesday it will stop reporting “adjusted” revenue and make other changes to its accounting methodology in response to Securities Exchange Commission inquiries

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

What Bloomberg Intelligence Says

Gross merchandise volume (GMV) growth may remain above pre-pandemic levels through 2H, even with lockdowns easing, as its strengthening market share means it disproportionately benefits from a more-rapid adoption of digital services in Southeast Asia.

-Matthew Kanterman, analyst

sea limited

Key Insights

  • Revenue at Garena rose to US$384 million from US$229.5 million, fueled by the popularity of Free Fire, the first self-developed hit game at the company.
  • Revenue at Shopee and other services climbed to US$364.7 million from US$165.7 million.
  • SeaMoney, the company’s digital financial unit, gained traction, with mobile wallet total payment volume topping US$1.6 billion during the quarter. There were 15 million paying mobile wallet service users.
  • Sea’s total sales and marketing expenses in the second quarter increased 95% to US$386.3 million.
  • Shopee registered more than 260 million orders in Indonesia in the second quarter or a daily average of over 2.8 million orders, up 130% from a year ago. Shopee also ranked first in Indonesia by average monthly active users, downloads and total time spent in the app on Android in the shopping category, according to App Annie.
  • Free Fire attracted as many as 100 million daily active users and was the highest-grossing mobile game in Latin America and in Southeast Asia. It ranked third globally by downloads in the mobile games category during the second quarter, according to App Annie figures cited by Sea.
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  • Sea’s US depositary receipts, which have gained 263% this year, closed at US$145.98 in New York on Tuesday.
sea limited