Matthews International Capital Management Dumps $18 Million Worth of Sea Limited (NYSE:SE) Shares: Has the Stock Run Too Far?

Matthews International Capital Management disclosed selling 106,055 shares of Sea Limited (SE) in Q3 2025, an estimated $18.17 million transaction. Despite this reduction, Sea Limited remains the fund's second-largest holding, valued at $38.11 million and comprising 8.87% of its 13F AUM. This sale is interpreted as a portfolio rebalancing strategy following SE's significant stock appreciation, rather than a negative view on the company, which continues to exhibit strong operational performance and growth.

Analysis

Matthews International Capital Management disclosed the sale of 106,055 shares of Sea Limited (SE) in Q3 2025, an estimated $18.17 million transaction. This reduced their position to 213,226 shares, valued at $38.11 million, yet SE remains their second-largest holding, comprising 8.87% of their 13F AUM. This divestment is primarily interpreted as a strategic portfolio rebalancing following significant appreciation, rather than a negative outlook on Sea Limited's operational performance.

Sea Limited's stock has demonstrated robust performance, tripling since early 2024 and surging 63.68% over the last year to $162.65, outperforming the S&P 500 by 54 percentage points. Matthews' decision to reduce its share count by two-thirds, while still maintaining a substantial allocation, reflects a prudent management of concentration risk after considerable gains.

Operationally, Sea Limited exhibits strong fundamentals, reporting TTM revenue of $19.42 billion and net income of $1.20 billion. The company achieved 29% sales growth over the past year and consistently generates positive net income and free cash flow across its digital entertainment, e-commerce, and digital financial services segments.

Despite trading at 41 times forward earnings, which is considered slightly expensive, Sea Limited's integrated ecosystem and strong growth trajectory in emerging markets position it to potentially outgrow this valuation. Its comparison to MercadoLibre with an added gaming segment underscores its diversified revenue streams and market leadership.

Key Decisions for Investors

• Investors should closely monitor Sea Limited's future earnings reports and segment-specific growth, given its strong operational performance and potential to outgrow its current valuation.
• Evaluate portfolio concentration, as Matthews' rebalancing highlights the importance of managing risk after significant gains in high-growth assets like SE.
• Consider Sea Limited's long-term potential for exposure to emerging markets and digital transformation themes, given its integrated ecosystem and strong presence in Southeast Asia and Latin America.