Singapore super apps Grab and Sea Ltd face tough earning challenges this year with a combined $71 billion loss in their market values.
Both Grab and Sea are also at the bottom of the MSCI Asean Index, with Grab being one of the biggest losers.
Brian Frietas, an analyst and research contributor at Smartkana, said in a Bloomberg report that passive investors “would have lost a fair bit of money on these stocks.” He estimated the passive holdings of Grab and Sea are close to $280 million and $2.8 billion, respectively.
Sea Ltd’s market value continues to plunge, adding to its $10.4 billion net loss and a $127 billion drop in total market value in Q4 2021. Tencent, Sea Ltd’s biggest investor, faces challenges in India as tension grows between India and China regarding border disputes. The flagship game Free Fire, along with 54 other applications of Chinese origin, were banned from India due to security concerns in February. Shopee also exited India at the end of March, less than six months after it launched there.
Meanwhile, Grab remains in a slump after being listed on the NASDAQ last year. Grab shares plunged 37% to its lowest ever last month and a $1.1 billion quarterly loss posted last March. Grab splurged money on driver incentives and aggressive food-delivery promotions to attract customers, as more people prefer to dine out with the easing of pandemic restrictions.
Nonetheless, both Grab and Sea are making moves to recover their losses and get back on track.
Sea Ltd expects Shopee – its biggest source of income – to continue to grow and bounce back to a 78% increase from 2021 while payments provider SeaMoney is expected to grow by 177% this year. Forrest Li, founder of Garena and Shopee, said in a Forbes report that Garena’s global platform will still be a key strategic asset in the long run.
Meanwhile, Grab is making moves to regain control over its losses – most recently by partnering with McDonalds and Starbucks to ease payment options and enhance the digital experience for their customers.
According to Bloomberg data, both Grab and Sea are expected to see at least a 68% rebound on their stock prices in the next 12 months.
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