Sea’s Garena Snapshot

Some Sea’s Digital Entertainment charts for housekeeping purpose.

User Base


Margin Profile

Talking Points in DE

  • Fully self-developed game, Free Fire, launched on iOS App Store & Google Play Store on December 4, 2017. Free Fire is a battle royale type of mobile game developed in-house by Garena.
    • Daily active user (DAU) from over 130 markets worldwide
      • 1Q20: 80m peak DAU
      • 4Q19: 60m peak DAU
      • 3Q19: m peak DAU (cumulative adjusted revenue reached US$1 Billion)
      • 2Q19: m peak DAU
      • 1Q19: 50m peak DAU (450m global registered users)
      • 4Q18: 40m peak DAU (350m global registered users); (self-dev: 44.5% DE adj rev )
      • 3Q18: 27m peak DAU (200m global registered users)
      • 2Q18: 16m DAU (in June, self-developed game accounted for 13% DE adj rev)
      • 1Q18: 13m DAU
      • 4Q17: 6m DAU
  • Macro Trend
    • Smartphone penetration in the region (4Q17)
  • Strategic Update
    • 2Q18
      • moving from PC-only to mobile-first
      • moving from pure game publishing to both game publishing and development
      • expanding from a regional footprint to a global presence (core -> )
    • 3Q18
      • partnership with Tencent (granted a right of first of refusal to publish its mobile and PC games)


  • Game publishing:
    • 1st party (Free Fire)
    • 3rd party – Tencent under right of first refusal agreement such as Tencent’s Speed Drifters and Activision & Tencent Games’ Call of Duty: Mobile
    • 3rd party – Others such as PUBG Corporation’s PUBG LITE
  • Game development: studio in Shanghai (200+ developers as of 4Q18)

Pinterest – Initial Model

Pinterest (PINS.US)

[October 19, 2019]

Initial Model

Download the work-in-progress model in excel here to play around 🙂

It’s been a while since I put together initial analysis and deck skeleton on Pinterest. However, I have some difficulties to convert my thesis (particularly business development and competition) into numeric assumptions and found it’s not easy to validate those assumptions. So I just built an initial model and decided to wait and see.

More detective works required to build up conviction and to determine margin of safety.


Astral Chain – Social Analytics Exercise on Game Release

Click the tweet below to see the whole thread of tracking Astral Chain.


Country Garden Service – Initial Thoughts

Country Garden Service (6098.HK)

[August 24, 2019]

* Initial Thoughts *


I came across this stock when reviewing post earnings release roadshow schedule. It showed up in various timeslots at different brokers’ venues. This indicates the market is interested in the stock and the company is happy to promote itself publicly.

Country Garden Service is a property management service provider and it has a related party, Country Garden (2007.HK) which is an HK-listed property developer / operator. Due to related party, there are basically two segments in Country Garden Service’s properties under management: 1st party (related party) and 3rd party. Before 1P / 3P mix becoming “balanced” in portfolio, path dependence governs the geographic cluster of properties and market segment of properties and their owners which has impact on the pricing and adoption of services offered.

Business Model

The company provides not only property management service but also property related services among daily demand and along the ownership life cycle. In addition, Country Garden Service engages in other property-related services and trajectory is to penetrate everywhere in the value network.

The business can be described as labor intensive but relatively less capital intensive. It can demonstrate economics of scale in area with high density of property under management and probably on higher geographic level. On the service side, it’s about up-sell and cross-sell to drive revenue contribution on top of basic management fee.

One of key characteristics of this business is high stickiness of customer. Generally, property owner is less likely to change property manager as the switching cost is high. The customer relationship gets deeper as time goes by. Low churn rate and cross-sell / up-sell opportunities will lead to healthy net dollar retention on property level. Long lifetime real estate and the net dollar retention will translate into impressive customer lifetime value. When you have a related party that is doing property development, you probably won’t spend a lot on customer acquisition. CLTV/CAC should be very attractive.

Company Specific before Meeting Management Team

  • I like their presentation. It seems the company has put some efforts on it.

Next Step

  • Basically, every leading property management player should be able to adopt similar business model. So why Country Garden Service? Maybe there are other more attractive targets. This needs a comp analysis.
  • What is the real customer experience? If actually reception is bad, the strong stock price development might attract short sellers with reports distributed.
  • See if I can meet the management team next week.
  • Not sure if on-site visit is needed.

* Related Posts After This *

[2019/8/26] Country Garden Service – Meeting Note 1