Investor Presentation September 2018
Disclaimer This presentation by Sea Limited (“Sea”) contains forward-looking statements. These statements are made under the “safe harbor ” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “guidance,” and similar statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations, the business, financial and market outlook and projections from its management, as well as Sea’s strategic and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development, financial condition, financial results, and results of operations; the growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the region, including segments within those industries; changes in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the growth of its digital entertainment, ecommerce and digital financial services platforms; the growth in its user base, level of user engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries; and general economic and business conditions in the region. Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this presentation is as of the date hereof, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law. This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the U.S. (“GAAP”), including “adjusted revenue,” “total adjusted revenue,” “adjusted net loss,” “adjusted EBITDA,” and “total adjusted EBITDA. ” The reconciliation of those measures to the most comparable GAAP measures is contained within this presentation. The non-GAAP measures have limitations as an analytical tool and you should not consider them in isolation or as a substitute for an analysis of Sea’s results under GAAP. This presentation does not contain all relevant information relating to Sea or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of Sea. Nothing contained in this presentation shall be relied upon as a promise or representation as to the past or future performance of Sea. Certain data in this presentation was obtained from various external data sources, and Sea has not verified such data with independent sources, and such data involves risks and uncertainties and is subject to change based on various factors. Sea and its respective subsidiaries and consolidated affiliated entities and the directors, officers and employees of the foregoing (“Covered Persons”) make no express or implied representation or warranty as to any information or data contained in this presentation, such representations and warranties are expressly disclaimed, and none of the Covered Persons shall have any liability with respect to such information or data. 1
We Are One of the Leading Internet Companies in Our Region Digital Entertainment #1 Market Share in Our Region by Revenue 1 #1 Market Share in Our Leading Digital Region by GMV and Payments Provider Total Orders 2 Digital Financial E-commerce Services 1. #1 position is derived from mobile and PC online game market rankings as estimated by Newzoo and Niko Partners, respectively, for the full year ended December 31, 2017 2. Gross merchandise value (“GMV”); according to Frost & Sullivan’s estimates for the full year ended December 31, 2017, three months ended March 31, 2018, and three months ended June 30, 2018 2
Our History Garena Interactive Holding Limited is Expanded Garena Launched founded; launched to all seven e-commerce business, digital entertainment markets in our Shopee, in all seven business, Garena markets in our region region May 2009 Launch September 2012 Milestone June 2015 Launch 2010 Milestone April 2014 Launch Listed October 2017 First Launched digital investment financial Sea is publicly from services listed on the Tencent business, AirPay NYSE 3
Investment Highlights 1 Southeast Asia and Taiwan: Enormous Growth Opportunity 3 2 Home Court Advantage: Global Experience Alongside Deep Local Knowledge #1 in Digital Entertainment 1 and E-commerce 2 in Our Region 4 3 5 4 Robust Business Performance 1. #1 position is derived from mobile and PC online game market rankings as estimated by Newzoo and Niko Partners, respectively, for the full year ended December 31, 2017 2 . According to Frost & Sullivan’s estimates for the full year ended December 31, 2017, three months ended March 31, 2018, and three months ended June 30, 2018 4
7 Key Markets in Our Region: Strong Market Potential 1 Our Region at a Glance 1 Taiwan 23.6 million pop. Vietnam 93.6 million pop. The Philippines Thailand 105.3 million pop. 69.1 million pop. Malaysia 32.1 million pop. Singapore Indonesia 5.6 million pop. 262.0 million pop. Total Population: 591.3 million GDP: US$3.2 trillion 1. According to IMF World Economic Outlook as of April 2018 (calendar year ended December 31, 2017) 5
Massive Market Opportunity in Our Region 1 Online Game Market Size 1 E-commerce GMV 2 US$ Billions US$ Billions 7.8 82.8 3.7 31.9 2017 2021E 2017 2021E Payment Infrastructure Will Serve As A Key Enabler In The Expansion Of These Markets 1. Refers to the aggregated market size of the the mobile and PC online game markets according to Newzoo’s Global Games Market Report as of July 2018 2. Gross merchandise value (“GMV”); according to Frost & Sullivan’s estimates as of 2Q18 6
Strong Home Court Advantages 2 Shared Local Market Local Partners Local Team Infrastructure Knowledge Local data centers Game player behavior Local cybercafé partners Staff dedicated to and preferences using Garena's localization, marketing Central data science capabilities Localized content proprietary system and operations Local eSports events Local community and Garena Strong online security league organizers Regulatory understanding and Shopper tastes and Local sales & Local Shopee Mall preferences marketing staff partners licenses Customized product and Shopee University Local logistics partners category management teams in every market Finance Customized user experience for seller on-boarding Shopee Local shopping events Legal Local use cases Large number of On-the-ground team Custom mobile partner operated to service counters user interface counters and merchants Local merchant partners Local banks integrated AirPay with AirPay App for direct top-up 7
Deep Relationship with Tencent 2 Invested in every round Local market knowledge Preferential access content to On-the-ground local leadership portfolio Leading PC online game: Proven execution track record League of Legends 1 Leading mobile game: Local payments & distribution Arena of Valor 2 Strong relationship and board Success in e-commerce presence Co-development opportunities Co-development opportunities 1. League of Legends is developed by Riot Games, Inc., a wholly-owned subsidiary of Tencent 2. Developed in collaboration with Garena 8
Garena DIGITAL ENTERTAINMENT
Key Stats 3 US$139.1mn 2 Popular IPs Garena Adjusted Revenue #1 Market Share in Our in 2Q 2018; Region by Revenue 1 19% YoY Growth 160.6mn QAUs 3 Content Development Extensive eSports 90.6mn MAUs 4 Capability with Platform- Capabilities 6.6mn QPUs 3 Centric Approach 1. #1 position is derived from mobile and PC online game market rankings as estimated by Newzoo and Niko Partners, respectively, for the full year ended December 31, 2017 2. Calculated as 2Q 2018 Digital Entertainment (“DE”) GAAP revenue + 2Q 2018 change in Digital Entertainment deferred revenue 3. Quarterly active users (“QAUs”) and quarterly paying users (“QPU”), for the three months ended June 30, 2018 4. Monthly active users (“MAUs”) during the month of June 2018 10
We Work With Top Developers Globally 3 Developer Partners Benefits to Garena Garena’s Value Add Exclusive Publishing Rights Massive Captive User Base Integrated Payment Processing Network Game Curation and Marketing Content Localization Localized Operation Offline eSports Events and Online Streaming Retain 65%-80% of Data Analytics Gross Billings 11
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