Q4 2021 Sea Ltd Earnings Call
All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation there'll be an opportunity to ask questions. Please note. This event is being recorded I would now like to turn the conference over to MS. Minju song. Please go ahead.
Thank you and Hello, everyone and welcome to your <unk> 2021 fourth quarter and full year earnings Conference call. I mean, you saw from CS Group, Chief Corporate Officer yourself. It before we continue I would like to remind you that we may make forward looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for <unk>.
Aries reasons as stated in our press release also this call includes a discussion of certain non-GAAP financial measures such as adjusted EBITDA and net loss excluding share based compensation.
We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures for a discussion of the use of non-GAAP financial measures a reconciliation with the closest GAAP measures. Please refer to the section on non-GAAP financial measures in our press release.
I have with me Sea's, Chairman and group Chief Executive Officer, Fourthly Group, Chief Financial Officer, Tony Hull, and group Chief Corporate Officer, Andrew way.
I imagine it will share strategy and business updates operating highlights and financial performance for the fourth quarter and up two and for the full year of 2021. This will be followed by a Q&A session in which we welcome any questions you have with that let me turn the call over to forest.
Thank you.
Hello, everyone and thank you for joining today's call.
2021.
Continue to focus on growing and evolving our company.
The address the changing needs of our user community.
We have to invest in.
And the efficiency captured.
Alternatives available to us.
Right.
Do you still have patients.
That's a result.
They deepen our engagement with consumer and small business.
Wow.
Our total addressable market.
Extending our leadership across all of our business.
Moreover, our growing scale.
These are.
Our strong cash.
Means we are well placed.
Collaboration efficiency across already called Pizza.
As we look at.
I would first like to take this opportunity to share with you how we plan to manage that.
Going forward.
We are now in a strong position to match the levers of our business to reach as many people.
Our market.
In 2022 and beyond.
We currently expect shockey to achieve all of these questions.
Adjusted EBITDA before HQ cost allocation in southeast Asia, and Taiwan by this year.
Also Steve.
Key money to achieve positive cash flow next year.
As a result, we currently expect that by 2025, perhaps generate and specialty the money productively will enable me.
Towards substantially self bond with their own long term growth.
And of course, we believe shopping has been money well be generating meaningful cash you know already existing core markets of southeast Asia and Taiwan.
Strong market leader.
While shop, you will also have been achieved.
And the strong market condition in our new growth market of Brazil.
On the path to this inflection point, we plan to continue to invest in shopping and key money efficiently.
We have earned wall.
Cash cash equivalents and.
Sure.
Our balance sheet.
Including close to $7 billion last year, which we intend to invest into the growth shockey see money over the coming years.
Based on our current plan, we believe that we have the financial resources required to grow this business.
The inflection point.
Without having to have any reliable cash generated from digital entertainment piece of it.
Of course.
Additional growing strong arena will be further growth with our institution.
And we remain extremely focused on.
We're looking to arena global platform, which we see as a key strategic asset in the long run.
Let me share with you, how we are thinking about resource allocation or deteriorate.
Broadly speaking shakeel.
In particular as well as R&D would be power talk too.
The areas for investment.
Our investments and the overall impact on the auto glass is likely front loaded.
Unit economics and profitability for our business is generally improved scale.
Well, hopefully we will continue to invest in choppy.
With a forecast upwards.
I'll start it should be much easier operationally for us so just to focus on seven core markets where shops.
However, we strongly believe.
Investing prudently.
Everybody is talking about.
And in Brazil in particular, we will generate.
Value for our shareholders in the long run.
Well, we do not underestimate the challenges of any new market expansion.
I would also like to highlight that.
Established track record several times in the seven highly diverse complex markets of southeast Asia and Taiwan.
When we started in each of those markets in 2016.
Secondly differently that's resources.
No.
As a result of a much more formidable competitive landscape that we currently do in our market expansion.
Moreover, our growth trajectory in existing core markets at Gen.
Generally follows a certain pattern, whereby we are able to manage strong user and order growth.
Efficiency and achieve market leadership and profitability with scale.
As I will share in greater detail when we discuss the segment results.
Shockey, Brazil has already achieved strong user traction meeting for commercialization and improving unit economics.
Two years after entering the market.
This gives us further confidence.
In managing growth in these markets.
Assuming success in Brazil, which is the sixth most popular country for work.
Where does profitability model.
<unk> has also been lawful it.
With the large chunky to substantially expand the total addressable market.
It definitely is enhanced.
Particularly at the global E Commerce platform and further diversify it isn't if it's across the world.
Secondly, our technology and R&D capability.
Really a strong competitive moat for us.
We need to invest in deepening the vantage.
Our scale and market leadership and ability to language Finnish.
Across our entire ecosystem positions us very well to continue to be on cost plus intact.
We intend to Revpar investments R&D to continually provide better at a greater variety of service.
Operator.
The feature to our users.
As well as to maximize our long term growth potential.
The result of some of these investments are already visible across our business in part involving all of our risk in the future.
Such offering and feature rich from UGC tool in free users.
User engagement feature Shockey and.
It had been tech product and there are few months too.
To share technology platform.
Bruce the surety under the risk management infrastructure.
Has the commercialization.
Financial underwriting system.
Just to name a few.
These investments are both necessary for our current operations and the highly important to our future growth.
We strongly believe that our investments in technology will continue to serve as a key competitive moat.
Our spot data.
Casualty cost the near to intermediate term.
Also I'd like to share our longer term view about the future. We are working very hard to work.
As we look ahead.
It's clear that consumer activity.
These are increasingly converging.
In protection of content Commerce and community.
It is also clear.
But that's the whole company.
<unk> successfully tapped into active engaged and social community. We will have a unique advantage estimate move into this new era.
Our three core businesses collectively offer immersive and interactive digital social and commercial experiences with large global community.
Supported by our fastest growing digital financial infrastructure, I think deep online offline operational capability.
We therefore believe that our ecosystem comprises accomplished consumer tech and innovation.
It could be relevant to the new opportunities being presented.
Oh, the business investment and in addition, we are making today are intended to both the fact that the Asia.
Through the changing needs of <unk>.
The growing digital native generation.
Let us now discuss the performance of <unk>.
And in each of our businesses in the fourth quarter and full year of 2021.
Our outlook for 2022.
At the group level.
Revenue increased one 8% year on year to $3 2 billion.
And the gross profit was $1 3 billion.
146% year on year for the fourth quarter.
Meanwhile, for the full year of 2021, GAAP revenue grew by 128% year on year to reach $10 billion.
At the core bank reached $3 9 billion.
189% from 2013.
The arena bookings for the full year $1 6 billion.
And the shopping GAAP revenue reached $5 1 billion.
Both businesses performed in line with our recently raised full year guidance.
For 2022, we currently expect bookings for digital entertainment to be between $2 9 billion and $3 $1 billion.
With many if not with many economies reopening further in the fourth quarter and into this year.
Sure.
Some moderation in all of our activities and the fluctuation and user engagement.
Moreover, due to anticipated government action.
We previously reported in our press release.
<unk> is currently available in the Google play.
Stores in India.
Our guidance therefore take into consideration.
Weighted factors.
The midpoint of the guidance of $3 billion.
Our current expectation that our bookings for 2022.
<unk> will be close to the level in 2020, while also considering the uncertainty in India.
While we will continue to affect the longer term trend as our markets continue to be more we remain highly confident in the long term prospect of our digital entertainment business.
Next week.
We expect GAAP revenue for e-commerce to be between $8 9 billion and a $9 $1 billion representing.
Representing 76 firmed up year on year growth at the midpoint of the guidance.
This drove outlook, particularly against a very high base of 2021.
Our deep presence age bands with consumer and small businesses across our market.
Fleet expanded e-commerce that addressable market and the continued improvement in commercialization.
I'm also excited to share our 2022 outlook, whereas digital financial services segment for the fourth time.
<unk> made strong progress in 2021.
We continue to scale our mobile what is currently at a loss.
And Thursdays, which saw successful adoption across the ecosystem.
We anticipate that this trend will continue.
Hmm.
Growth engine for us.
We expect GAAP revenue for the money for this year to be between $1 1 billion and $1 3 billion.
Representing 155% year on year growth at the midpoint of the guidance.
Let's now turn to our businesses in more detail.
Beginning with digital entertainment.
In the fourth quarter, the arena generated <unk>, one $1 billion.
<unk> up 7% year on year at <unk>.
Adjusted EBITDA was 56% of bookings.
$603 million.
Quarterly active user reached.
$654 million up 7% from a year ago.
Quarterly paying user or <unk> 77 million, an increase of 6% year on year.
For the full year of 2021.
Arena recorded bookings of $4 6 billion.
Up 44% year on year.
Adjusted EBITDA was up 40% compared to 2020 at two 8 billion.
Representing 60% of bookings.
During the fourth quarter I would like to gain momentum moderate somewhat given the reopening your trends in many of our market.
Not that it is worth emphasizing the free fire continues to have one of the largest and most engaged user communities aggregating history.
According to data our AI previously known as <unk>.
For the third year in a row three power was the number one most of them have these mobile game globally in 2021.
Three of our hotels second globally by average monthly active users for all mobile game on Google play in the fourth quarter.
Driven by our wholesale return leadership at the highest grossing mobile games across both iOS and Google play in Southeast Asia, and Latin America for both the fourth quarter and full year.
Based on phase II.
We help them intensively leading position in southeast Asia, and Latin America for consecutive quarters.
Furthermore, <unk> was the highest grossing mobile battle Royale game for the fourth consecutive quarter. According to data AI.
We remain committed to investing in content to <unk>.
I'll steal their spirit and.
At least user engagement.
For that we have a comprehensive pipeline in place that improved partnerships original and the user generated content and esports activities.
For example, this model we have a crossover event with our testing Chris one of the most popular global video game franchise.
And we're also excited to have <unk> one.
The award multiple dreams.
Worldwide alternate universe of Revpar at our global brand and buffer in the coming months.
Additionally, we have been strong engagements with user generated content through lower power plant.
Our recently introduced the management feature.
In March the most of the public there Matt.
Right back close to 40 million user profile.
We will continue to encourage user generated content.
Testing preterm feature.
Entity.
We believe that our strong user reception popular items is a positive indicator of the initial success to encourage user participation in content creation and to build <unk> into an increasingly open platform and is well aligned with major emerging industry.
Such as the macro world.
Besides III strong performance.
The other games in our portfolio continuing to perform well.
For example arena better has it grown it year on year in 2021 across both active users and bookings.
The fifth year of operation.
In 2022 and beyond.
We expect to expand our portfolio with more games across diverse generally.
Multiplayer action Yoplait go play.
Paul and casual games.
Over the long term, our priority agreement sustaining and growing our existing major franchisees.
Diversifying our gaming portfolio.
Our strong and growing self development capabilities will be a key component of this diversification efforts.
Our teams are working on multiple Cortlandt type games.
Different agenda and dangerous.
In June we expect to bring more self developed games to market.
We also continue to actively acquire and invest in top talent and IP to further expand our capabilities across gender and geography.
Meanwhile, we will keep growing our publishing relationships.
Leveraging our unique set of strengths across diverse global market.
We believe that this comprehensive approach to <unk>.
Hollywood diversification.
Allow us to identify and execute around the largest gain in the year to come.
More importantly, with the game, that's one of the most engaging and in market forest.
Containment.
<unk> communities from a cost and work together took place and interact.
That will play a vital role in shaping the virtual spirit of users.
And we are well positioned to capture new opportunities at the right gearing.
Giving our.
Core competency in developing highly social immersive and interactive global game platforms with live operation at scale.
Therefore, we are highly focused on maximizing the long term potential of the arena.
These are key to potentially greater success in the future or where activity.
Interaction.
Consumption.
Pleasingly Marshall.
Now, let's turn to e-commerce .
So you had a great year in 2000, especially one as the business scale and the strengthened market position across both new and existing market.
Fourth quarter shocking GAAP revenue grew 89% year on year to reach $1 billion.
<unk> recorded gross orders of $2 billion.
<unk> up 90% year on year, and the sole GMB grow 53% over the same period rate to reach $18 2 billion.
This strong performance contributed to a strong result for the full year of 2021 were sharply achieved GAAP revenue of $5 1 billion.
133% year on year.
The full year gross orders totaled $6 1 million.
100, and a 17% year on year and <unk> reached 52 5 billion.
An increase of 77% from 2020.
Monetization improved across all revenue component with GAAP revenue as a percentage of total GMB rising from six 1% in 2020 to eight 2% in 2021.
Our strong revenue growth shows how for merchants across the market truck the shopping platform and understand the value we deliver to them.
Our leading market position is also evident in.
Strong brand recognition and engagement from our consumers are shopping.
It was the top E Commerce breath, you about fact that global brands 2021, and the fifth one.
Overall.
In terms of engagement our buyers shops are shockey over six times a month on average in the fourth quarter with Indonesia monthly order frequency.
<unk> eight times.
We are very pleased with the progress made around engaging our buyer.
And well continue to deliver more value.
According to data AI shop.
<unk> ranked first in the shopping category globally by downloads in the fourth quarter.
<unk>.
In the same category for Google play shocking first globally by local tax spending and second by average monthly active user.
Fourth quarter and the full year.
During the same period.
<unk> also continues to be the top ranked app in the shopping category across both <unk> and.
Google play.
Each of Southeast Asia and Taiwan.
By average monthly active user and a total cap spending.
Okay.
Indonesia Xiaomi was ranked the number one across the same metric with cross border growing around eight 8% year on year during the fourth quarter.
We have also scaled our production, Brazil, Germany, the local seller and the buyer.
During the fourth quarter and into full year shopping was ranked first by downloads in the total cap spending and second by average monthly active users for the shopping category. According to <unk> AI.
In the fourth quarter, Shockey, Brazil reported more than $114 million cross border growing close to 100% year on year.
That's more or less $17 million.
Our GAAP revenue.
Our.
Countries and 26% year on year.
We believe our offerings provide a new and fresh online shopping experience.
The patriarch to the under the settlement of the Brazilian market.
We see Brazil, as a new growth market for us.
We are very excited about its growth prospects and the long term value, we can deliver to the ecosystem.
Meanwhile, we continue to see efficiency gain.
For Southeast Asia at the Taiwan.
Adjusted EBITDA loss per order before HQ cost allocation was fifth kicks.
In the fourth quarter.
The improvement of <unk> 21 in the fourth quarter of 2020.
Sure earlier, we believe shockey is on track to achieve positive adjusted EBITDA before HQ cost allocations in southeast Asia, and Taiwan by this year.
Our newer market has also made progress with.
Adjusted EBITDA loss per order before HQ cost allocation.
<unk> consistently in every quarter in 2021.
Specifically in Brazil, our adjusted EBITDA loss per order before HQ cost allocation improved by more than 40% year on year during the fourth quarter to below $2.
Across both of our market.
Our total adjusted EBITDA loss per order was <unk> 45 in the fourth quarter.
<unk> 41.
For the fourth quarter of 2020.
This increase was attributable to the increasing contribution from the newer market, which are at a much earlier stage of development.
These markets are both growing faster and incurring higher adjusted EBITDA loss per order that southeast Asia and Taiwan.
For the full year, our total adjusted EBITDA loss per order across all markets was 42.
Improving 9% compared to 2020.
Over the past couple of years.
Celebrated the grow of Shockey quickly.
Quickly adapting and serving our buyer and seller through the pandemic.
We've also successfully strengthened our competitive position in southeast Asia, and Taiwan as well as Brazil.
Going forward, we expect southeast Asia, Taiwan to keep growing healthily.
While we weather Brooklyn, our market leadership and executing towards profitability.
Our new growth market, Brazil.
We are focused on efficient and sustainable growth.
We continue to scale and improve our service offerings to local seller and the buyer.
Finally, our digital financial services business.
The need for forest, well in the fourth quarter and full year of 2021.
In the fourth quarter GAAP revenue was 100 and the $98 million.
Up several hundred and 11% year on year, driven by the growing adoption of our product in a syringe.
For the full year of 2021, our GAAP revenue grew 673% year on year to reach $470 million.
Quarterly active users across our key money product uncertainty reached $45 8 million.
Up 19% year on year.
In the fourth quarter and full year 2021.
Further expanded our digital financial service offering.
Credit insurance Tech and digital services.
For example, we launched a feedback Indonesia during the better half of the year with strong traction in terms of user growth.
We also booked 10.
<unk> recently.
Pete.
In Indonesia, which has the most comprehensive set of products and services among our market.
20% of the quarterly active users have fueled.
Given the multiple the money product.
For services in the fourth quarter.
We view this as a highly positive indicator of the strong efficiencies, we can leverage in bringing new digital financial service offerings to the large and fast growing user base in our entire consumer internet ecosystem.
In particular with these shockey and seed money at both highly synergistic with one another and enjoy a strong flywheel effect in their daily.
Yes.
The total payment volume of our mobile wallet was close to $5 billion in the fourth quarter up.
Up 17% year on year at.
The $17 2 billion.
For the full year.
120% year on year.
In 2021.
Our mobile wallet services across both on platform and off platform use cases, leveraging our growing ecosystem of product.
<unk>.
This further drive a positive flywheel effect that allows us to bring business to higher growth and better efficiency as we drive adoption across both consumer and the merchant.
In the fourth quarter, we expanded our payment acceptance point to include key merchant.
Our Asia, completing 711 in Malaysia, and <unk> in Thailand.
We believe there are many other market opportunities within our market the seed money.
Correct.
We are looking forward to rolling out.
More digital financial product and services in 2022, as we continue serving the underserved in our ecosystem is technology.
And at the same time as the business grows with our communicated adopting more financial services and the product we.
We are also excited to see that see money is on track to achieve.
Positive cash flow for next year.
To conclude.
I am proud of the progress our team made in 2021, both in building our businesses and.
Serving our communities.
We believe we are very well positioned for continued strengthening our market leadership, while focusing on sustainable and efficient long term growth.
We are highly confident that the <unk>.
And their resilience over the past year.
Wonder to enhance our ability to execute on our long term strategy.
<unk> delivered significant value to our community.
Big holders.
I would like to personally and on behalf of fee.
Sure.
Owners and threat <unk>.
<unk> continued long term support.
We hope to return to trust and investment in Us.
<unk> strong execution at <unk>.
Focused on the long term success of the company.
With that I will.
Slide 20 to discuss our financials.
Thank you and thanks to everyone for joining the call. We have included a detailed financial strength of the scanner with the corresponding management analysis in today's press release and forest as discussed several of our financial highlights.
I'll focus my comments on the other.
So overall total revenue increased 6% year on year to $2 $2 billion in the fourth quarter and 128% year on year to $10 billion.
Full year of 2021.
This was primarily driven by the growing adoption of products and services across our E Commerce increase our financial services businesses.
We continue to deepen engagement with our users as well as the growth of our digital entertainment business.
Digital entertainment moving through <unk>, 7% year on year to one one in London and in the fourth quarter and 44% year on year to $4 6 billion for the full year of 2012.
GAAP revenue was up 104% a year on year to $1 4 billion.
Fourth quarter, and the 114% year on year to $4 3 billion for the full.
Yields without it.
Digital Entertainment adjusted EBITDA was six $603 million in the fourth quarter and $2 8 billion.
With all that.
He covers our fourth quarter GAAP revenue of $1 $6 billion included marketplace revenue $1 2 billion.
<unk>.
104% year on year and gas.
Product revenue of $2 billion.
Up 48% year on year.
For the full year of 2021, GAAP revenue of $5 $1 billion marketplace revenue of $4 1 billion.
156% year on year.
Product revenue of $1 1 billion.
83% year on year.
The story.
Deepening penetration of e-commerce , and our ability to capture significant growth opportunities.
E Commerce adjusted EBITDA loss was $878 million in the fourth quarter and $36 million for the full year of 2021, as we continued our investments to fully capture the opportunities in our markets.
We remain committed to continue investing yes put it in a sustainable manner and the growing ecosystem to serve our users better.
Digital financial services revenue was $298 million in the fourth quarter.
$478 million for the full year of 2021.
This represents year on year growth of 711% at 673% for the quarter and full year respectively.
The growth was primarily due to increasing traction as we continue to expand our suite of services offerings.
Adjusted EBITDA loss will center of $15 million in the fourth quarter and the $617 million for the full year of 2021.
This was primarily due to our continued efforts to drive mobile wallet adoption.
Returning to our consolidated numbers, we recognized a net nonoperating loss of $71 million in the fourth quarter of 2000 and formula.
So our net non operating loss of $124 million in the fourth quarter of 2020.
For the full year, our non operating loss was $113 million in Paris.
$180 million for the full year of 2017.
Operating loss for the fourth quarter full year ended December 31, 2021 was primary due to interest expense on our convertible notes.
We had a net income tax expense of $106 million in the fourth quarter of 2000.
One and $333 million a full year of 2021.
This was primarily due to corporate income tax and withholding tax recognized in our digital entertainment business.
As a result net loss excluding share based compensation was $483 million in the fourth quarter of 2021 and $1 6 billion.
2021.
With that let me turn the call is meaningful.
Thank you for asking Tony.
We are now ready to open the call for questions operator.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
Using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
In the interest of time, we will take a maximum of two questions at a time from each caller.
You wish to ask more questions. Please request to join the question queue again. After your first questions have been addressed at this time, we will pause momentarily to assemble our roster.
Our first question is from Alicia Yap from Citi.
Please go ahead.
Hello, Hi, Good evening management, Thanks for taking my questions I.
I have two questions. The first one on the digital entertainment.
In your guidance.
You are not including any of those new games that you mentioned in the pipeline that potentially you plan to publish in later.
So just want to clarify on that and then related to that as well.
Hum.
Which countries do you think you'll also see some declining trend.
And then second question is on the E. Comm marriage makes a decision to exit strategies.
At what point would you also badly.
Cross border attractions in Poland and Spain.
That you could maybe.
What kind of problem that Youtube moving a habit. So next step one for penetration.
Okay.
Thank you Alicia.
So just chill entertainment.
Our guidance does take into account of games.
We believe might be launched this year of course any new games.
Initial launch stage.
It's more on user growth and market penetration as opposed to getting focus on monetization.
The contribution is probably my come towards the later part of the year or only a part of the stage.
Stage of the development of the game.
And in terms of the trend.
Well I think the overall opening up post Colgate is across all the markets.
And therefore, we do start to see the weakening I think it's a industry wide as well.
So we are still evaluating the data and as a trend at the same time, we are very much focused on the long term success.
We do see it as a very important.
A key strategic asset to us.
Well of course, it is contributing have been asked about cash every year and most importantly, we want to build into our long lasting <unk>.
And with hundreds of millions of active users and fully engaged and socializing.
<unk> different types of games and MAU and also incorporating all.
Over time, <unk> and platform.
The important French site.
We will use as a key to the future development of virtual economy, So I think that.
While there are some headwinds our focus on the long term has not wavered in our view towards this game as a long term play that's not changed.
E Commerce as we shared we have focused on southeast Asia, and Taiwan S. L quite distinct market, which has continued to enjoy very strong growth. Despite.
Despite that I'm sorry.
So comps as I said.
Last year.
Covid and as you can see we are.
<unk> gained significant rounds.
These are the our peers are in Indonesia, we grow more than about 8% a.
The quarter and also in <unk>.
Six countries.
Our goal today is around 280%.
Our growth rate is that meaningfully significantly in fact higher.
Our next peer well we already multiple.
So that is highly encouraging and it does take time.
We are looking at more and more market Tony.
Hospitable ethylene ships it comes outside of adjusted EBITDA.
Before HQ cost allocation.
So this will become the market will not only.
Yeah close engine for us, but also potentially down the road contribute positive cash to fund our global growth and another growth area that we focus plants in Brazil.
Not only we have reached the top rankings in downloads.
And total time spent in seconds and make you just two years after entering the market. We have also achieved 140 million quarterly gross orders.
$170 million.
Revenue in our markets.
We also shared a.
With that kind of when we enter into the market we focus there.
The growth and then what are your goals and then Martin leadership and positive unit economics over time with scale and we have repeated that playbook seven times in seven tiny distinct markets in southeast Asia, and Taiwan, and we are saying that we have already seen strong user.
Attraction strong order growth.
And set to market leadership and also equally classically E unit economics in that market are pointing to another potential market that could essentially double our total addressable market for E Commerce.
With a highly pullback profitability now lets look at southeast Asia, and Taiwan were probably the first.
Large e-commerce player to show profitability in this market in this region.
10 or are they existing major players.
Quite profitable so the profitability model for the market it has proven.
Therefore, I'm very encouraged by the results of our e-commerce and its outlook into our global platform.
Some of the other markets as we shared before these are highly maisons.
Markets, well, we might tend to waters.
From time to time.
Exit some sense again shows while we are open Monday, we're also very disciplined.
In our.
Pilots exercise, so we'll remain disciplined and open minded with spot market again, the focus will be on the existing core southeast Asia power market and our new growth market in Brazil.
Our next question comes from you Sue Newby from Goldman Sachs. Please go ahead.
Your line on mute. Thank you for taking my question.
Okay.
Yes, we can hear you.
Thank you.
Sorry about that.
If I could just ask you about what is built into your forecast for 2022.
For bookings.
Shared with us and how does that potentially change.
Change is India, which could come back on <unk>.
Do you have an expected date.
Potentially if you could just share with us how you're thinking through that that would be we would be grateful.
That concludes it.
This all possible in the gaming business to talk about how quickly you can build up a portfolio of games the news into beta stage with somebody who is good.
That would be fantastic.
To understand how we could expect that traffic.
You can see.
The quarter of 2022 quarter by quarter, and then into 2023.
And third this is a general question on the E Commerce business, where we noticed how the momentum is very positive both from that standpoint.
On the couch with take rate progression as well as a progression towards free cash flow and profitability I Wonder if you could just take a step back and give us a feel for how much further this business could be accelerated into 2020 through 2022 branches added value.
Okay. Thank you piyush.
The upside of that.
The voice quality wouldn't affect it at all.
Question to say that's not clear.
In terms of the <unk>.
Any guidance and we.
Sure.
Hum.
The opening of our markets.
Transfer fees and also.
As expected the government action.
Are we facing so we have taken this into consideration and therefore, we at this point believe Oh tiny chips.
<unk> bookings will probably be close to the level of 2020 that means we're giving back some of the gains we've made.
Partially during the Covid.
And also with some additional.
To reflect the situation in India, which has had it.
Again, I think at this point given that.
These uncertainties, we're facing it's probably more art than science for us.
In terms of our portfolio.
It's focused on diversifying our game genres as we shared before we are looking into and Chavez Jeff.
RPT.
Are there more casualty.
To supplement our existing offering.
I think these will still be only seats.
Also given the size of fleet buyer, which is the.
The largest.
Highest.
Closing mobile games in history it is up.
Hi to come up immediately with a.
Our games that can match.
Please fax, however, everything virtually into a diversified our portfolio and capability and the same time.
Hi.
For the long run while we already had such a big platform of sweet spot that we can incorporate different types of MAU eight months.
And that's H that platform to introduce more content and more types of pain and more IP.
I think we still.
Still with me.
Probably one of the largest stages or phases of work.
So while we have some.
Any heavily on the insights.
Inside our phone.
Okay.
Long run to make sure that we stand ready to capture and that's simply a major opportunity that might come.
Okay.
So far it's been quite strong.
Captured.
Globally.
For example on the TV side with the right legal collections and we are the exclusive publisher that took us to where we initially what at the time of IPO as a gatekeeper.
Southeast Asia one.
In terms of update policy and then we also captured.
Next mobile waves.
With that publishing arena valor developments of fleet buyers that itself, which extended our camp for the.
Southeast Asia.
Market to a global platform.
Then we also captured.
Adam Allowedly wins.
Right the police fire and that significantly enhanced our game side business side of the business and also the overall strength.
I think I'll check back at Sun speak for itself. So what we are doing now.
Do you get them ready and strengthened our capability to capture the next major wins that might come our way.
In terms of.
Take rates.
So we are as we have shared before we believe a Ah hi.
High single low double digit rate is that achieving both of them upfront.
I believe that's in there as you can see we're progressing well towards that lease E. Most of the markets. We already are getting a high single digit rate. Yes. So we believe this will continue.
Continue to rise although.
We think a gradual and there won't be.
And progression or will it be.
That's it for our business and even the long run.
And also for the newer markets such as Brazil, I think I've seen the prevailing.
Market.
Well at that 15% to 18% charge to back some of the leading players. So it is a very high take rates market also.
Not particularly worried about the e-commerce take rates.
In terms of profitability as we shared we believe our southeast Asia, and Taiwan, a little cheap.
Cheap out positive I guess, the EBITDA before HQ cost allocation.
I did hear that means more and more market will break even on that time over time this year and maybe go into next year.
That will give us also has come flooding in further growing our other you've lost market is actually at the spot.
Profitability has lumping footprint.
Our next question comes from Gian show from Barclays. Please go ahead.
Hi can you hear me.
Yes, I can hear you.
This is Roger one on behalf of Joe. So I have two quick questions first of all is can management management talk a little bit about your <unk>.
View on the 'twenty to 'twenty two G M D growth.
And the second is can the management help to us.
Sort of a breakdown the rough mix of Asia, and new markets in terms of EBITDA loss this quarter. Thank you.
Yeah.
Yeah, So we don't give guidance.
PMT.
Did you give guidance on a GAAP revenue for E Commerce we.
We believe that.
It reflects our view about the potential growth rate and I also mentioned that in terms of the taper increase it'll be a while we will continue to increase take rate the painesville eat moderating.
Well the measure.
Oh, we don't also through the give the breakdown in terms of the EBITDA.
So we have given the order number for fourth quarter on top of the Hill and also the EBITDA loss.
Allocation order in Brazil, So I think you can do the math.
Yeah.
Our next question comes from Joe.
Chubb Choudhary from HSBC, Singapore. Please go ahead.
Yeah, Hi, thanks for the opportunity two questions.
Firstly on e-commerce .
Your guidance to achieve positive adjusted EBIDTA in your core market.
It would be driven by one key factors is it higher or lower sales and marketing and any color over there would be helpful. And if you can throw some light on the competitive landscape in go to market.
Secondly, your cash and cash equivalents went down by one 6 billion quarter on quarter to pinpoint two can you highlight what factors drove that decline is there any other investment.
Thank you.
Sure in terms of I E.
E Commerce.
EBITDA in Southeast Asia, Taiwan.
This is a I think I saw the fault of the higher take rates and also cost efficiency as we scale.
We always mentioned that.
Platform the marketplace model that we are pursuing.
Joy is slow.
Flywheel effects and some economy of scale.
We continue to grow our business are the unit economics are just keeps improving and is actually still a breakeven point and then same time as you can see we have been blockade dumping that takeaway, especially on the high margin takeaway he comes to US a transaction fee.
And revenue as well as advertisement.
Odds are probably talking more types of sellers I'm glad to say anything that takes away.
Tesla Fellas nice place and at same time, more importantly, voluntarily sellers are adopting more of our free shipping program and what types of programs and they all have to pay more to our business that business at scale platform to facilitate a foot.
But it will stop there.
At the marketplace.
Is that right.
Profitability is quite clear that.
But it takes time and investment and time to get there and we believe would probably has the longest ones to get there as a major e-commerce player in this region.
We are very happy that.
Same time, they are still growing at a very strong rates despite the tough comps.
And against the current period and are extending.
Our market leadership needs that's evolved here.
I would like to invite Tony to attempt to second question, Yeah sure above the cash position.
<unk>.
You know are trying to optimize the cash yield.
Vesting into.
Sure sometimes deposit that's all of which are a little carousel three months like this.
<unk> categorized as short term investments.
About two.
Two are quite significant to eight hundreds of about half of it. So if you add that but actually the cash position. So for example of it.
Yes.
Yes.
As Justin said that the cash has gone its just upgrade to our subsea vas.
The next question comes from Ranjan Sharma from Jpmorgan. Please go ahead.
Hi, good evening and thank you for the.
For the opportunity.
Two questions from my side.
Firstly, if you can talk about.
New game development, we know there's a lot of talent available in China. No are you changing your hedging strategies too.
At our new game development.
And second question I know its a bit sensitive, but instead are closest.
Closest to get.
The band or the Vulcan, India on three five thank you.
In terms of the UK developments I think I was checking has been quite consistent.
We have studios globally, the state and also I can see.
For Asia, and Korea, and other parts of Asia. So.
So we are focused on in cost development and at the same time, we have been investing globally HQ.
A strong set up mid teens and IP.
With our partnership agreements that type two such investments that also augment our organic pipeline.
Of course, there so that the publishing side. So we continue to work with and so well.
Discuss punish upsell with a global game developers to bring top IP to our region.
And he comes on FIFA in India.
It's still we're still working on it other than what's been publicly disclosed and we don't have much more to share at this point. Thank you.
Yeah.
This concludes our question and answer session I would like to turn the conference back over to MS. Zhu song for any closing remarks.
Thank you. Thank you all for joining today, we look forward to speaking to all of you again next quarter. Thanks appreciate it.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
[music].