SEA’s tech giants put to the sword following lackluster earnings

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It was that week in the quarter again, when the household names from Southeast Asia’s tech industry revealed their GDP-sized earnings results, along with guidance on their near to medium-term financial prospects.

Usually, these events signal the strength of tech businesses in the region, but this time around, it left investors wanting more, way more.

These closely watched reports not only provide an insightful view into the current state of a company’s operations but also often send investors either scampering to buy or sell stock and, generally, form the basis of ratings and price target recommendations by Wall Street analysts.

Image credit: Timmy Loen

It’s only fitting to kick off discussions on the recent earnings reports with that of the poster child of Southeast Asian tech businesses: Grab (GRAB, NDAQ). Founded in 2012, the super app has experienced something of a fall from grace since its market debut in December.

A sudden surge of investor optimism heading into its Q4 earnings report quickly went up in smoke, with the Singapore-headquartered firm’s shares plunging well over a third of its value, or roughly 37%, after posting its results.

Grab’s Q4 results hardly paint a pretty picture and, perhaps, has justified investor skepticism over its stock in recent months.

It may be the case that CEO Anthony Tan’s grand plan for Grab needs more time to bear fruit, but the market has no patience under the current macro environment. Grab’s share price has fallen about 70% in the last three months. You can find an in-depth review of Grab’s financial health here.

Another company with a strong claim to being the face of Southeast Asian tech firms’ rapid rise is Sea Group (SE, NYSE), which fared mildly better than its counterpart. This is hardly conciliatory, given that the firm has trimmed over US$130 billion in market value from its peak last November, while its share price hit new 52-week lows last week.

Sea shed about US$10.4 billion in market value after slashing its year-on-year booking guidance for its digital entertainment unit Garena for the first time. India’s ban on Free Fire has been a thorn in Sea’s share price, but as my colleague Simon reports in this premium story, there are glimmers of hope that Sea can pull itself out of a deep hole.

Over in China, Baidu’s (BIDU, NDAQ) investors would be forgiven for fearing the worst after Alibaba’s (BABA, NDAQ) disappointing earnings last month.

However, the search engine, whose stock price has shown resilience in the face of China’s big tech crackdown, bucked the trend. Its rise in quarterly revenue was warmly embraced by the market. Baidu’s share price rose immediately following results, but eventually succumbed to broad market-wide weakness to end the week down nearly 4%.