I write about asymmetric investments that go unnoticed, with a deep focus on emerging markets.
Singapore
Joined August 2018
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It's been almost 16 months since I started publishing my deep dives in public and 6 months since going paid.
I thought it would be a good moment to pause and express my gratitude for the community that has formed around this work.
When I first started writing, there were no expectations beyond wanting to think more clearly by documenting my process, and sharing ideas with like-minded individuals. The response since then has been far more encouraging than I could have imagined.
I also think it’s an appropriate time to take stock of how things have been going and provide some transparency around the performance of these deep dives so far.
I've published 13 deep dives to date, 10 bullish and 3 neutral. I have no interest in being bearish or short. If I don't like a business/stock, I simply don't buy it.
Of the 10 bullish picks, 9 are currently in the green while 1 is in the red. One of the green positions has been closed, while the others continue to be held.
Of the 3 bearish picks, all 3 are in the red as I write.
On average:
- Bullish picks: +38.7%
- Bearish picks: -26.7%
- SPY: +12.2% over the same period
I must also acknowledge that I’ve been fortunate to have started this blog in the middle of a bull market, and the performance to date is by no means a reliable indicator of long-term success.
I’m sector-agnostic, and these names span e-commerce, consumer discretionary, SaaS, infrastructure and more. It's still very early and I've thoroughly enjoyed the process thus far. There will definitely be drawdowns and mistakes ahead. As always, I'll stay transparent and share both the research and the outcomes, good and bad.
Thank you to everyone who has been part of the journey, in particular to paid subs who continue to place their trust in an anonymous person from a tiny country in Southeast Asia. I hope to continue rewarding that faith by producing high-quality research grounded in facts, not hyperbole. ❤️
“The idea that Amazon CEO Jeff Bezos has pioneered a new business paradigm is silly”
There’s just so much to learn from history, if you’re willing to.
Published my latest article on $SE
Sea Limited: Potential Monee IPO
Why Sea Might Be Willing to Give Up 20% of Its Most Promising Business
gabgrowth.substack.com/p/sea…
$SE
Give this a read, couldn't have said it better myself.
Anyone who follows the company closely would know that management is making a conscious decision to re-invest in the business.
Shopee is a massive cash cow in the waiting.
I think people are not aware of what $SE Sea Limited is building. I’ll just take Shopee, the e-commerce arm.
Some context to understand the unit economics behind it.
Shopee’s Gross Merchandise Value (GMV) is expected to be around $ 160bn in 2026.
The core marketplace take rate (ads + commissions) went from 8.6% to 11.1% of GMV from Q2'25 to Q2'26, +250bps. Yet EBITDA/GMV fell from 0.76% to 0.67%.
But the important part is understanding why this happened.
Because they reinvested that money into improving the business for their customers, so they can keep taking market share and winning. Out of those 250bps:
- 73bps went to shipping subsidies. Put simply, Shopee pays for some or all of the buyer’s delivery through free shipping vouchers or member perks, to get people to buy more often.
- 147bps went into cost of revenue. Instant/same-day delivery andd fulfilment: doubling the share of orders shipped from its own warehouses, so more products arrive sooner. Yes, for the impatient ones!
- 58bps went to marketing (S&M from 2.70% to 3.28% of GMV). Growth, growth and more growth.
But here comes the interesting part. Imagine $SE decides to reinvest a little bit less. For every 10bps of GMV kept as profit = c.$160m more EBITDA at 2026 GMV.
Shopee is expected to generate around $ 1bn of EBITDA in 2026. If they reinvested just 10bps less of the 250bps they gained, Shopee EBITDA would be +16%. Keep 50bps and it’s +$810m, about +80% on Shopee’s FY26 EBITDA and ~+20% on the whole group’s.
Are people aware of how fast this can turn into a money-printing machine? I don’t think so.
$GRAB
Taiwan's Fair Trade Commission has rejected Grab's proposed US$600m acquisition of Foodpanda's Taiwanese operations, primarily because of Uber's existing 13.1% equity stake in Grab.
For context, Taiwan's food delivery market is currently dominated by Uber Eats and Foodpanda. Grab does not operate in Taiwan today, so the acquisition would have effectively allowed Grab to replace Foodpanda as Uber Eats' main competitor.
The regulator's argument is that Uber's economic interest in Grab creates a potential conflict. If Uber Eats aggressively competes on pricing, it could hurt Grab's profitability and consequently the value of Uber's investment. Conversely, Grab might also be less inclined to compete aggressively against a company with which it has longstanding financial and commercial ties.
Even though Uber only holds approximately 3.9% of Grab's voting rights, the regulator concluded that this was sufficient to raise competition concerns.
What I find interesting is that this is not a conventional antitrust problem.
Grab isn't acquiring a competitor to consolidate market share. It is attempting to enter a new market by acquiring an incumbent, theoretically preserving the existing two-player market structure.
The concern is that the two players might not compete as aggressively because of their financial relationship.
There is some merit to this argument, particularly given the history between Uber and Grab.
However, I also think it raises an interesting question: how much does a minority investment actually influence competitive behaviour when neither company directly controls the other?
For Grab shareholders, I see several implications.
First, this is obviously a setback to Grab's ambitions to expand beyond Southeast Asia. Taiwan would have provided immediate scale in a developed food delivery market without requiring Grab to build its operations from scratch.
Second, I don't necessarily see the failed acquisition as a major negative for the underlying investment thesis. Grab's existing Southeast Asian operations remain the primary driver of its value, and spending $600M to enter a new market would have introduced additional execution risks.
Third, and perhaps most importantly, Uber's ownership of Grab may increasingly become a strategic constraint rather than simply a legacy investment relationship.
If Grab intends to expand into markets where Uber operates, this ownership structure could continue to attract regulatory scrutiny. That could eventually create pressure for Uber to reduce its stake.
As someone who has become more cautious on Grab's capital allocation strategy, I don't think retaining $600M of acquisition capital is necessarily a bad outcome.
What matters is whether management can generate better risk-adjusted returns by deploying that capital into its existing businesses instead.
JUST IN: Taiwan regulators have blocked $GRAB's acquisition of FoodPanda Taiwan, citing competition concerns.
Grab said it was disappointed by the decision.
"Grab's core business across Southeast Asia remains robust. We will continue to focus our capital and resources on executing our growth roadmap and empowering communities across our regional footprint."
$SE
One thing that even I, as a bull, have to admit is that the announcement of Monee IPO and Sea Cloud was terribly handled.
It could be excused if it was an internal memo that was leaked, but the letter was literally shared and published on the SEC website. They should understand the implications of dropping these 2 pieces of unexpected news and not elaborating.
But again, this is a concern for the short-term stock price and not an issue at all for the business.
I'm looking forward to the next earnings, with them hopefully giving us more information to work with!
It's time for my take on the $SE memo:
a) Monee IPO and the capital to grow:
As I said in my earlier Monee piece, Shopee and Monee have been competing for growth capital over the last few years. Monee's current deposits are far from sufficient to fund its current growth.
I also didn't expect Monee to be planning an IPO, but it does make sense for them to sell some Monee shares to get more funding.
I think listing Monee (with $SE still holding the majority of the ownership) could also build more trust in the funding market, as it would reveal a lot more financial information.
Plus, standalone businesses focused on a single vertical usually get better valuations! Don't forget that $SE's Monee digital banking business has more than 40M clients and more than 40M active creditors!
And it's still growing very fast.
I've always wondered whether Monee can enter new markets without Shopee's presence. Perhaps now, as the banking business enters a more mature stage and Monee builds out more playbooks and products that don't rely on Shopee's distribution, it's time for them to try new markets.
b) Sea Cloud:
This is the main reason for yesterday's crash. It basically signals huge CAPEX and a spending spree over the next few years.
As I shared a few days ago, $SE will produce enormous profits in 2027 and 2028 if TikTok Shop doesn't renew the pricing war.
And it's basically impossible for a group of "young" founders who have successfully built a series of great products across different countries, with enormous capital from the capital markets, to suddenly become conservative nice boys within the AI trend.
That's not the $SE I know, and I've also expressed some frustration at seeing them not being aggressive enough.
Frankly, I like the idea of building a great new, big organization. $SE has always had a series of experiments running in parallel. That's basically what "other services revenue" is in the earnings release. $SE is always doing a ton of experiments, and that's what makes them successful in the first place.
But I think they handled the announcement awfully, terribly. I think announcing a brand-new, capital-intensive project without a detailed explanation in the press release is simply awful. How could we, as investors, even think about $SE's valuation as a group?
But to be fair, I do see the potential for $SE to become a decent cloud provider. I believe they do have decent and differentiated know-how in underdeveloped nations and the Global South.
First, with eCommerce, live commerce, and video commerce, they've already built great infrastructure to support huge spikes in traffic.
With fintech, they've already built infrastructure with great cybersecurity and local compliance muscle.
With Garena, they specialize in real-time streaming on low-cost Android phones.
Now they're partnering with dozens of public cloud providers around the world and also have quite a data center footprint globally. They now manage 40+ data centers around the world (a lot of them are colocation facilities, I believe).
They've already built out a distributed network of computing infrastructure that is also very cost-oriented, which I believe is quite differentiated from the U.S. giants, which are more centralized and performance-oriented.
I think they do have a decent chance of serving developing nations that are rather fragmented and cost-sensitive.
In the future, when hardware faces fewer constraints, I believe AI/computing will become less and less CAPEX-intensive, and the ones that capture more of the value will be in the application layer.
And the future won't unfold equally everywhere. AI is obviously spreading everywhere in the U.S., but it will take quite some time for the trend to spread to less wealthy nations. And when that time comes, they'll also need a lot of localization.
And localization has never been the strength of global giants, but it's one of Sea Limited's core specialties. They're super good at building local solutions for every single small and mid-sized market.
And as AI becomes more and more regulated, I believe localization will become more and more important. Every government will want data to stay on its own soil.
I think Sea Limited has zero chance of winning if it competes head-on with the tech giants in developed nations. But if they play a cost-oriented and localization game, they have a decent chance of winning.
That doesn't mean I think this new adventure has zero risk. I think it's still something very concerning, especially since they've never been successful in B2B businesses. I don't think they have any of the B2B muscle yet.
Sea Limited did try B2B businesses before with enterprise software (Sea Talk) and POS (Ocha). They simply weren't successful.
It takes very different genes to serve consumers versus enterprises.
All in all, I'm decently optimistic about the business. I feel that $SE is back! The aggressiveness is back!
But I'm also worried about the valuation prospects. As I shared earlier this year, I did buy back a small number of shares near the lows earlier this year and will buy more if it continues to trend down.
I'm planning to stick to the plan.
$SE
I think people still underestimate the expertise of this management team, which is crazy to me given their track record.
This is a team that joined the e-commerce war a few years late, usurped a $BABA backed giant, an Indonesian national champion, and now has >50% market share, the most dominant of any region in the world.
Also launched a FinServices firm that brings in over $1B in EBIT today.
Runs one of the most successful mobile game of the past decade with over 600M MAUs, 100M DAUs and is wildly profitable.
Started a food delivery business where they went from zero to the 2nd largest player in the region within 4 years.
Owns the 2nd largest logistics platform in the region, handling billions of parcels yearly.
Now they’re about to launch Sea Cloud. Based on that track record, what are the odds it fails?
Seeing many bearish takes on $SE now at $80, while those same people were bullish much higher.
I don’t think fundamentals have worsened at all. In fact, it’s gotten stronger.
There are legitimate reasons to be worried if Sea Cloud becomes a CAPEX burning machine, but we don’t know the details yet. It is too early to speculate.
This is where trust in management comes in. Forrest and Co. have created 5 startups within the group, 4 of which are dominant winners in their respective fields, while Shopee Food is on track to be a duopoly.
I would not bet against them, and I do trust their judgement.
$SE Sea Cloud has been used internally for over a decade now.
This is what management shared in a blogpost a month ago:
At Garena, AI is used to enhance the experiences of players and gaming communities, supporting our efforts to create engaging, inclusive, and safe spaces that bring people together around their shared passions. For example, teams have created more than 1,300 AI chatbots, workflows, and agents, while developing in-game AI companions that can understand and respond to player intent in real time.
At Shopee, AI is helping sellers reduce the time and effort required to create informative product listings, improve product discovery, and deepen customer engagement, while enabling better-informed business decisions. For example, in the first quarter, these AI-generated content tools supported a 14% year-on-year improvement in purchase conversion rate. By helping sellers connect with customers more effectively and grow their businesses, these capabilities can enable more entrepreneurs to participate in and capture the benefits of the digital economy.
At Monee, AI is being applied in areas such as fraud detection and credit risk assessment, supporting our ability to deliver simple, accessible, and inclusive digital financial products and services. For consumers and small businesses with limited access to traditional financial services, these capabilities can help broaden access to the financial tools they need. For example, Monee’s latest credit-risk models use transformer-based architectures trained on behavioral and transactional data across Sea’s ecosystem. Recent enhancements have lifted approval rates by around 10% while maintaining a similar level of risk.
JUST IN: Taiwan regulators have blocked $GRAB's acquisition of FoodPanda Taiwan, citing competition concerns.
Grab said it was disappointed by the decision.
"Grab's core business across Southeast Asia remains robust. We will continue to focus our capital and resources on executing our growth roadmap and empowering communities across our regional footprint."
$SE
In hindsight, there were signs of Sea Cloud being announced.
In September, it was announced that $SE became the first enterprise in Southeast Asia to adopt $NVDA's Vera Rubin platform.
Just 5 days ago, they published a blog post sharing that they partnered with Google AI Futures Fund, granting teams across Sea to selected frontier models by Google. This was Google Lab’s first partnership with an external lab.
$SE
Right, let’s discuss this. The stock is down another 6% today off 2 pieces of news:
1. Monee IPO
2. Sea Cloud launch
The common worry i’ve seen among investors today is why management feels the need to spin-off the business when there are clear synergies with Shopee/Monee.
In my view, this is very unlikely to be a spin-off in the traditional sense. Instead, it’s an opportunity for Sea to $SE as a conglomerate to be re-evaluated. The second reason is liquidity, which is possibly related to the 2nd point of discussion.
What this also proves, is that Monee is probably much less reliant on Shopee today for growth, a huge improvement from a few years ago.
On Sea Cloud, I think it’s worth distinguishing between the logic of the move and how attractive the business could eventually become.
Sea already has an internal cloud platform. It has been supporting Shopee, Garena and Monee for years, and this simply brings that internal capability into the enterprise market.
In my view, there is a sensible starting point here. Sea has experience operating large consumer platforms across emerging markets. If the infrastructure and tools it developed solve problems for other businesses, commercialising them could create another revenue stream from capabilities it already needs internally.
The obvious parallels are AWS and Alibaba Cloud.
The biggest question for me is what Sea Cloud actually intends to sell.
If the focus is helping regional businesses deploy AI applications using infrastructure and tools Sea has already developed, I can see the opportunity. Shopee’s merchant ecosystem could also provide a potential distribution channel, although merchants would still need a compelling reason to pay.
If the ambition requires substantial new spending on data centres and GPUs ahead of proven external demand, I would be more cautious. The capital requirements and execution risks would be very different.
My interpretation is that some of today’s concern comes from uncertainty over capital allocation. Investors want Shopee’s growth to translate into stronger profits and cash flow. A new business introduces questions about how much of that cash will be reinvested, and how long shareholders will wait for returns (especially in the face of several years of delayed profitability).
I remain undecided on what Sea Cloud means for now until we got more information. It makes sense, but the scale of the commitment matters and I think Sea needs to balance between profitability and growth.
Overall, I think the memo is great news for the business as a whole in the medium and long-term. But of course, the market is short-term focused, and this likely drags down profitability estimates in the 1 year time frame, which is all that sell-side analysts care about.
As a long-term focused investor, I am not concerned. Happy to hear pushback and where I might be wrong, as always, cheers!
