Sea Ltd (NYSE:SE) stock rose 0.19% (As on March 5, 11:13:16 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 23 and a better-than-expected 2024 outlook, suggesting it’s making headway in fending off hard-charging rivals including TikTok and Alibaba’s Lazada. Further, SE’s e-commerce unit will likely drive positive revisions in the Singaporean conglomerate’s near-term outlook, according to analysts at JPMorgan. Sea, a tech giant in Southeast Asia comprised of its Shopee e-commerce business, SeaMoney financial services arm, and Garena gaming division, posted its first-ever profitable year. Sea said its annual performance was bolstered in large part by “meaningful” market share gains by Shopee. In a note to clients on Tuesday, the JPMorgan analysts improved their rating of Sea to “Overweight” from “Neutral,” citing Shopee’s strong returns despite stiff competition from Alibaba-backed Lazada and Indonesia’s Tokopedia. In the current competitive environment, [Sea] is likely to continue increasing e-commerce commissions while reducing the intensity of sales and marketing spend,” the analysts wrote. However, the analysts flagged that higher take-rates — or how much money Sea makes from e-commerce transactions — could lead some third-party sellers to seek out alternative platforms. Earnings expectations could subsequently prove to be volatile, they argued, adding that Sea’s share price performance could in turn be choppy.

Moreover, E-commerce gross merchandise volume, or the value of goods sold, climbed a better-than-expected 29%. Sea now predicts GMV will increase in the “high teens” this year, helping it report a profit before interest, taxes, depreciation and amortization. The results alleviate some concerns about the prospects for online retail arm Shopee, which is vying with ByteDance Ltd.’s TikTok, Alibaba Group Holding Ltd.’s Lazada and newer entrants like Temu in a slowing Southeast Asian arena. In December, TikTok restarted its hit shopping app in Indonesia after signing a pact with GoTo Group’s e-commerce unit Tokopedia, creating a partnership that threatens Shopee’s dominance.

SE in the fourth quarter of FY 23 has reported the adjusted loss per share of 19 cents, beating the analysts’ estimates for the adjusted loss per share of 25 cents. The company had reported the adjusted revenue growth of 4.8 percent to $3.62 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $3.55 billion. The company has posted $126.7 million in adjusted earnings before interest, taxes, depreciation and amortization for the fourth quarter through December.