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Hello reader,
I was looking forward to bringing our readers today’s Opening Bell. It feels good to be the bearer of good news for once – especially in these challenging macroeconomic times.
Southeast Asian tech behemoths, Sea Group (SE, NYSE) and Grab (GRAB, NDAQ), managed to pull off a delicate balancing act between cutting costs and fueling growth to report outstanding third-quarter results last week.
Honestly, it’s a breath of fresh air while layoffs continue to ravage tech industries and inflation still has markets in a bear hold.
Shares of Shopee parent Sea rose a staggering 36% despite the firm cutting its full-year bookings outlook for gaming unit Garena and posting a more than double Q3 adjusted EBITDA loss it booked last year.
Quite a conundrum, isn’t it?
Luckily, today’s first featured piece by Tech in Asia chief analyst Simon Huang dissects how Sea satiated anxious investors by efficiently monetizing Shopee’s gross merchandise value and slashing its sales and marketing expenses.
When it comes to Grab, the ride-hailing and food delivery giant appears to be ahead of its own schedule. The firm’s deliveries segment broke even on a segment-adjusted EBITDA basis three quarters ahead of its forecasts. Q3 revenue more than doubling is the icing on the cake.
In our other featured piece, Simon highlights how Grab plans to build on this promising quarter through an intensified focus on organic growth and expansion through partnerships. He also touches upon the key role its financial services and ads business has to play in the company’s future.
While these two Southeast Asian darlings seem to be regaining some lost ground, they’ve still got a ways to go to reach their lofty peaks, with shares of Sea and Grab down more than 70% and 50% year to date, respectively.
There is an argument to be made that maybe their shares have just bottomed out. However, based on their latest quarterly reports, a turnaround for Sea and Grab may be a lot closer than many predict.
— Shravanth
THE BIG STORIES
Image credit: Timmy Loen
3 Trends to keep an eye on
2 Eye-popping facts
The ones you didn’t see coming
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