Gold bars to be exempt from tariffs, White House clarifies
By Sam Boughedda
Reuters said on Friday that Shopee is closing its operations in Chile, Colombia, and Mexico, leaving only cross-border operations available, and exiting Argentina.
While the report is not yet confirmed, a Morgan Stanley analyst said the firm remains Overweight on Sea Ltd (NYSE:SE) and is keeping its $123 price target on the stock as they view the news as positive as the company refocuses on its core markets.
"We estimate the combined GMV of these countries for 8 months of 2022 was ~US$1.1bn (~3% market share), small vs. our 2022e Shopee GMV of US$79bn. Assuming an average order value of US$7 in these markets, and 50% of GMV is local with a loss per order of ~US$1.50 (our estimates), this implies a saving of ~US$180m per annum by exiting these markets. We forecast Shopee to lose US$1.9bn in Adjusted EBITDA in 2023e vs. US$2.6bn 2022e, and closing these operations could improve this further," stated the analyst.
The analyst added that given MercadoLibre 's (NASDAQ:MELI) pan-regional scope, they "see a positive read-through for it from Shopee's potential Argentina exit and shift to solely cross-border operations in Mexico/Chile/Colombia."
"While Shopee's ramp-up in these countries was earlier-stage than in Brazil, we see the pullback as helping to remove a longer-term competitive risk for MELI," the analyst added.