Technology company Sea beat third-quarter revenue estimates on Tuesday after its Shopee e-commerce business turned profitable, sending its shares up more than 17% in early trading.
Shares of the Southeast Asian company opened at their highest level in more than two years after more than doubling in value this year.
Shopee reported growth in shopping across Southeast Asia and Taiwan as consumers increased purchases ahead of the holiday and travel season.
The company turned a profit in the third quarter in Asia and Brazil, said Sea Chief Executive Forrest Li.
Shopee is mainly available in Southeast Asia and Brazil, after leaving India, and in some markets in Europe and Latin America.
“As we continue to focus on growth, we expect Shopee to remain profitable in the future,” Li added.
The segment, which represents more than two-thirds of the company’s total business, recorded an adjusted EBITDA of US$34.4 million in the quarter ended September 30, compared to a loss of US$346.5 million the previous year. .
The boost came from a 42.6% increase in e-commerce revenue to $3.2 billion, which far exceeded analyst expectations of $2.92 billion, according to data compiled by LSEG.
While Shopee remains a dominant force in Southeast Asia, it has faced challenges in certain markets due to economic headwinds and stiff competition from rivals such as Lazada and global giant Amazon.
To beat the competition, the company diversified into digital finance and entertainment to take advantage of the growing demand for these services.
The financial services business, which houses digital payments and financial services provider SeaMoney, reported revenue growth of 38%, beating estimates for a 21.7% increase.
Sea’s total revenue jumped 30.8% to $4.33 billion in the quarter, above analysts’ consensus estimate of $4.08 billion.
