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Top Stock Highlights of the Week: Sea Limited, Grab, Sembcorp Marine and ST Engineering

·4-min read

Welcome to this edition of top stock highlights where we feature snippets from various companies.

Sea Limited (NYSE: SE)

Sea released its fiscal 2022 first quarter (1Q2022) earnings that saw revenue continue to power higher.

Total revenue surged by 64.4% year on year to US$2.9 billion, driven by year on year revenue increases in all its divisions.

Revenue from its Digital Entertainment division, Garena, climbed by 45.3% year on year to US$1.1 billion while the e-commerce and other services division, which includes SeaMoney, saw revenue soaring by 94.2% year on year to US$1.5 billion.

The gross margin improved from 36.6% a year ago to 40.4%.

Gross orders for Shopee jumped 71% year on year to 1.9 billion, taking gross merchandise value (GMV) higher by 39% year on year to US$17.4 billion.

However, for Garena, quarterly active users slid 5% year on year to 615.9 million while quarterly paying users fell by 23% year on year to 61.4 million.

This was the second quarter on quarter decline in the number of users for Garena.

The bright spot was SeaMoney, Sea’s digital financial services division, which saw total payment volume for its mobile wallet surge by 49% year on year to US$5.1 billion.

Grab Holdings Ltd (NASDAQ: GRAB)

Grab Holdings also released its 1Q2022 business update this week.

Revenue inched up by 6% year on year to US$228 million while net loss narrowed by 35% year on year to US$435 million.

Grab also reported improved operating metrics, with GMV rising by 32% year on year to US$4.8 billion.

Monthly transacting user (MTU) increased by 10% year on year to 30.9 million while the GMV per MTU also rose 19% year on year to US$155.

On the mobility front, the company has increased its driver-partners by around 220,000 in the last six months, while mobility GMV increased by 32% in the last two months as the economy recovered from the Omicron virus.

On the financial services front, Grab saw an 18% year on year growth in financial services MTU and also saw a five-fold year on year increase in total payment volume from buy now, pay later (BNPL) services.

On this note, Grab and Singtel (SGX: Z74), along with a consortium of partners, recently snagged a full digital banking licence in Malaysia.

Along with its Singapore digital banking licence win in 2020, Grab now has two such licences in the bag that can further its ambition to become a major financial services player.

Sembcorp Marine Ltd (SGX: S51)

Sembcorp Marine Ltd, or SMM, released its 1Q2022 interim business update.

The group completed multiple projects for customers and also secured a landmark win in the renewable energy sector for a wind turbine installation vessel.

At the same time, SMM is working on multiple new opportunities in cleaner offshore and marine (O&M) solutions and renewables.

The group’s net order book at end-March 2022 stood at S$1.75 billion, with renewables and cleaner/green solutions making up 65% of the order book.

With better cash flows from the completed projects, SMM’s net debt to equity ratio has also improved from 0.49 times at the end of 2021 to 0.38 times at the end of 1Q2022.

The group is also pending a merger with Keppel Corporation Limited’s (SGX: BN4) O&M division to create a premier global player in the industry.

Singapore Technologies Engineering Ltd (SGX: S63)

Singapore Technologies Engineering Ltd, or STE, also released its 1Q2022 business update.

Revenue rose 13% year on year to S$2 billion, with broad-based year on year revenue increases across all three of STE’s business divisions.

A total of S$2.4 billion worth of new contracts was secured in 1Q2022, bringing the order book to S$21.3 billion, a two-year high for the group.

STE estimates that revenue from its cloud, artificial intelligence (AI) analytics and cyber business can triple to more than S$500 million by 2026.

Growth will be driven by the increased adoption of hybrid and multi-cloud solutions, along with increased demand for AI, data and video analytics, 5G, and the Internet of Things applications.

Also, the board of STE has approved an interim dividend of S$0.04 per share for the quarter, taking the annualised dividend for 2022 to S$0.16.

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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

The post Top Stock Highlights of the Week: Sea Limited, Grab, Sembcorp Marine and ST Engineering appeared first on The Smart Investor.

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