Top Stock Market Highlights of the Week: Sea Limited, City Developments Limited and IHH Healthcare

Welcome to this week’s edition of top stock market highlights.

Sea Limited (NYSE: SE)

Sea Limited recently reported its fourth quarter and full-year 2023 earnings.

It was the first time that the e-commerce player registered a full-year profit, marking a milestone for the company since it was listed back in October 2017.

Revenue for 2023 rose 4.9% year on year to US$13.1 billion.

Sea Limited’s digital entertainment division led by Garena saw a year-on-year decline in revenue that was offset by higher year-on-year revenue from its e-commerce division, Shopee.

Gross profit improved by 12.5% year on year to US$5.2 million.

Sea Limited ended 2023 with an operating and net profit of US$224.8 million and US$162.7 million, respectively, reversing the previous year’s losses.

The gaming company also generated a positive free cash flow of US$1.84 million, a sharp reversal from the free cash outflow in 2022.

For Garena, the number of quarterly active users rose nearly 9% year on year to 528.7 million for the fourth quarter of 2023 (4Q 2023).

However, the number of quarterly paying users continued to decline, falling by 9.3% year on year to 39.7 million.

Garena’s operating income fell from US$1.97 billion in 2022 to US$1.18 billion last year.

As for Shopee, the division pulled off an admirable performance with gross orders jumping 46% year on year to US$2.5 billion for 4Q 2023.

Over the same period, gross merchandise value (GMV) climbed 29% year on year to US$23.1 billion.

The division narrowed its operating loss from US$2 billion to US$550 million for 2023.

As for its digital financial services division led by SeaMoney, revenue for 4Q 2023 improved by 24% year on year to US$472.4 million.

SeaMoney booked its first-ever operating profit of US$490.2 million for 2023.

Looking ahead, CEO Forrest Li expects 2024 to be another profitable year for Sea Limited.

The company will spend to defend its market share for Shopee and expects full-year GMV to rise by mid-teens percentage year on year.

Its hugely popular Free Fire game continues to be the most downloaded mobile game globally for 2023 and the company projects that the game can garner double-digit year-on-year user base and bookings growth in 2024.

City Developments Limited (SGX: C09)

Mingtiandi reported that City Developments Limited, or CDL, has purchased the Hilton Paris Opera in France from Blackstone for around S$356 million.

The hotel has 268 rooms and this transaction was concluded just ahead of the upcoming Paris Olympics.

Paris is one of the few cities in Europe that witnessed a surge in hotel deals last year, according to data from MSCI.

This deal will mark the blue-chip property group’s third acquisition of a European property from a Blackstone fund.

Other deals include the St Katherine Docks in London last year worth GBP 395 million and the Concorde Opera in Paris back in 2013 for around EUR 153 million.

IHH Healthcare Berhad (SGX: Q0F)

IHH Healthcare released a mixed performance for 2023 but outlined several business initiatives it plans to undertake to grow its business.

Revenue for 2023 increased by 16% year on year to RM 20.9 billion while net profit surged by 91% year on year to RM 3 billion.

Excluding exceptional, one-off items, net profit would have declined by 7% year on year to RM 1.3 billion.

The healthcare player also generated a positive free cash flow of RM 1.8 billion, around 7% lower than a year ago.

IHH declared a second and final cash dividend of RM 0.055, bringing the total ordinary dividend to RM 0.09 when including the interim dividend of RM 0.035 that was already paid out.

The group also paid out a special dividend of RM 0.096 back in June 2023, so the total dividend for 2023 amounts to RM 0.186.

IHH had 12,307 operational beds as of 31 December 2023 and saw a 7% year-on-year rise in inpatient admissions last year.

The healthcare giant intends to expand its bed capacity by adding close to 4,000 new beds in the next five years.

Occupancy will also be increased above the current 69% by driving patient volume growth.

At the same time, it plans to grow its ambulatory care offerings and improve primary care penetration in selected markets while evaluating value-accretive assets for potential acquisition.

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

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