SESeaBullishSeaMELIMercadoLibreBullishMercadoLibreCPNGCoupangNeutralCoupang

Today on

I’ve been looking at the latest $CPNG $SE and $MELI earnings. These three are all stocks in my current portfolio. They’re often grouped together as “emerging-market e-commerce.” I think that misses the important part. The difference is what happens after the GMV shows up. $MELI is turning commerce into payments, credit, logistics and advertising. $SE is starting to show real operating leverage at Shopee. $CPNG is still trying to prove that its enormous logistics advantage can translate into better economics. That distinction matters. Coupang grew revenue 7% in Q3, but gross profit fell 6%. Product Commerce adjusted EBITDA fell 45%, and TTM FCF went from +$1.27B to -$409M. The fulfillment-center fire clearly hurt. But even excluding the fire, Product Commerce EBITDA margin fell from ~8.8% to 4.6%. That's not a revenue problem. It's an economics problem. Sea is almost the opposite. Revenue grew 43%, gross profit 51%, and net income 34%. Shopee GMV grew 23%, but core marketplace revenue grew 51% and EBITDA grew 45%. That's the kind of operating leverage I want to see. The catch is Monee. Loans outstanding are up 60% to $12.6B, while 90+ day NPLs increased from 1.1% to 1.3%. The marketplace is getting better. The credit book needs watching. Then there's MercadoLibre. Revenue +45%. GMV +38%. TPV +53%. Fintech MAUs +29%. Credit portfolio +62%. The interesting part isn't just the growth. It's the ecosystem. A customer who shops, pays, borrows and keeps money inside MELI is worth substantially more than a customer who just places an order. That's a much more interesting moat than simply having a large marketplace. But MELI isn't a free lunch either. Operating income actually fell 6.5% despite 45% revenue growth. And management is spending heavily to deepen the ecosystem. I think that can be rational. But eventually those investments have to become shareholder returns. So I don't view these as three interchangeable e-commerce stocks. MELI has the strongest ecosystem. SE may offer the most interesting combination of growth and valuation. CPNG has a valuable logistics network, but still needs to prove it can generate attractive returns on that investment. I own all three, but I don't assign them the same valuation or level of conviction. Growth gets customers onto the platform. Unit economics determine whether shareholders actually benefit. I'm particularly interested in how other investors are underwriting these businesses. Is Shopee's improving monetization being underestimated? Is MELI's ecosystem worth the premium valuation? And what would it take for you to become more constructive on Coupang? Interested in hearing the fundamental arguments, not just which stock you like.

SESeaBullishSeaMELIMercadoLibreNeutralMercadoLibre

Yesterday on

$SE - Q3 results made me more bullish on the business—but not blindly bullish on the stock. Bought some during pre-market hours around ~$72 a share. Shopee is the standout: GMV +23% Core marketplace revenue +51% Adjusted EBITDA +45% That’s real operating leverage. Sea is monetizing transactions much faster than it’s growing them. Garena is quietly becoming a monster cash generator too: EBITDA +46% to $458M. The problem is Monee. Loans receivable reached $12.6B, up 60%. Credit-loss provisions jumped 82%. 90+ day NPLs rose from 1.1% to 1.3%. That doesn’t mean Monee is bad. It means the business is now large enough that underwriting matters enormously. ($MELI has similar issues) Sea also spent $4.4B on loans receivable through 9 months while buying back ~$1B of stock. So the question isn’t whether Sea can grow. It clearly can. The question is whether Shopee + Garena + Monee can turn that growth into high incremental returns on capital. That’s what I’m watching. But i sure do love the price point.