© Reuters. Sea Ltd. (SE) lower at Morgan Stanley as e-commerce uncertainty to persist
Morgan Stanley analysts downgraded shares of Sea Ltd. (NYSE:) to Equal-Weight from Obese in a notice Monday, reducing the value goal for the inventory to $47 from $55 per share.
The analysts said that a part of the rationale they downgraded the inventory is as a result of they anticipate the e-commerce uncertainty to persist.
“Competitive intensity in ASEAN e-commerce (EC) has increased since the summer,” the analysts famous. “While the temporary closure of TikTok Shop in Indonesia in early October might have acted as a catalyst to slow down marketing spend by incumbents, it has actually proved quite the opposite, with all players upping the ante to widen their share of the largest EC market in ASEAN.”
“The recent news of the relaunch of TikTok’s EC operations in Indonesia will likely mean that this spend will remain elevated for longer. As such, we think SE’s earnings predictability for the next 6-12 months is quite low,” the analysts added.
Morgan Stanley is shifting to the sidelines on the inventory till it will get extra readability on the aggressive panorama dynamics in Indonesia, the stickiness of GMV as soon as advertising and marketing spend tapers, and the unit economics of live-streaming within the area.
