Sea Limited, known as "Southeast Asian Little Tencent", will release 2021Q3 results before US stocks open on Tuesday, November 16, US Eastern time.

Galaxy-CIMB Securities said in a research report that Sea is expected to have adjusted revenue of $2.6 billion in the third quarter (+ 8% month-on-month, + 66% year-on-year). Considering the sound operation of Sea's core business and the continuous expansion of the overall potential market through new joint venturesThe brokerage gave Sea an "overweight" rating, raising its target price to $425 from $345.

The specific analysis is as follows:

1. Game business Garena: Q3 revenue is expected to increase by 27.2% year-on-year to US $1.2 billion

Thanks to Free Fire's popularity and continued growth in its player base, the brokerage expects revenue from its gaming business to reach $1.2 billion (+ 1.8% month-on-month, + 27.2% year-on-year). But with the release of "Battlegrounds Mobile" (a revision of the Indian version of "PUBG Mobile") in JulyThe competition in Indian game market is more fierce.The brokerage's expectations for continuous growth are more conservative.

2. E-commerce Shopee: Q3 GMV is expected to grow by 80% year-on-year, and revenue will increase by 112% to $1.3 billion.

As countries in Southeast Asia tighten COVID-19 's prevention and control measures, Shopee's total merchandise trading volume (GMV) is expected to rise again (+ 11.1% month-on-month, + 80% year-on-year), driving a new round of strong revenue growth, reaching $1.3 billion (+ 112% year-on-year).It is expected to overtake Garena to become the largest revenue contributor to Sea.

3. Digital Financial Services SeaMoney: Q3 revenue is expected to increase by 670% year-on-year to US $110.9 million

As more users of the digital financial services division using ShopeePay and SeaBank,Sea are likely to maintain strong growth, the division's Q3 revenue is expected to be $110.9 million (+ 25 per cent quarter-on-quarter, + 670 per cent year-on-year).

Overall, Galaxy-CMC raised its revenue forecast for the 2021-2023 fiscal year by 1.5% to 6.7%, due to the company's strong growth momentum and the expansion of the overall potential market through various measures.However, this may delay the turnaround for Sea, which is expected to make a non-GAAP profit in fiscal year 2023.

The main points to pay attention to in the upcoming Q3 performance conference call are:

The market response of ① "Free Fire Max" and the update of game channels

The latest development of ② e-commerce competition pattern, especially in Indonesia

③ Shopee's market expansion strategy and possible new products.

Risk factors:Increased competition in e-commerce; operational risks in new markets; regulatory risks brought about by the increase in tax regulations.

Bloomberg expects

According to Bloomberg's forecast, Sea 21Q3's revenue was $2.76 billion, up 127.7% from a year earlier, and an adjusted net loss of $317.2 million.

Currently, 30 analysts have a "buy" rating on Sea, with a consistent target price of $400.43 and the current price of $341.29.