August Portfolio Update: Purchase of Sea Group

Last year, I did a valuation on Sea Group and concluded "Expecting a 60% total return for owning a stake for 4 years. A worthwhile price to enter Sea Group is US$38."

Since then I have been actively updating my valuation of Sea as and when the quarterly results are released. My valuation of Sea Group has remained roughly the same at the US$45 billion point (US$56-60 share price, after factoring for employee share compensation dilution).

Sea Group indeed fell to US$38 which triggered my purchase. My latest write up, as of Aug 2023, for Sea can be found here

With that, my portfolio has changed slightly.

It is worth noting both PRIME and Keppel Pacific REIT have taken a beating in share prices. However, my evaluation of the sector remains unchanged - neutral with it being hampered by the US office space oversupply. The US vacancy rate is likely to remain high for a time period of 3-5 years.

Keppel Pacific and PRIME should be able to tide through the crisis; PRIME could possibly encounter some need of equity raising due to it being close to the regulatory leverage limits and its office occupancy rate is rather low at 85%. I am interested to see what the REIT manager is doing to backfill its vacated leases.