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Consumer Discretionary
Felix Wang sees an attractive pair trade around two converging risks for MELI: TikTok shifting more investment towards Brazil and SE’s Monee stepping up the fintech battle against Mercado Pago. TikTok’s Brazil push could pressure MELI through price, assortment and younger consumers, while Monee could challenge Mercado Pago just as MELI’s credit business faces potential NIMAL pressure and a less benign credit cycle. By contrast, if TikTok becomes more selective in Southeast Asia, Shopee could benefit from lower subsidy intensity and better margins. Felix is well below Street forecasts for MELI, he sees annual growth potentially halving next year, and estimates 40%+ upside from the pair trade.
TikTok’s LatAm move has global reverberations
Report by
Blue Lotus Research
Blue Lotus argues that TikTok Shop (TTS)’s entry into Latin America is the largest e-commerce opportunity in developing countries for 2026. Video and live commerce penetration in LatAm remains <5% of GMV vs. 20-25% in SE Asia, despite larger GMV and strong TikTok engagement - creating a wide opening for disruption. TTS’s traffic advantage is expected to pressure incumbent margins, particularly MercadoLibre and Sea, while driving logistics upgrades. J&T Express emerges as a key beneficiary, with LatAm filling a growth gap as China and SE Asia slow. Blue Lotus also sees strategic upside for Kuaishou, partnership optionality for Grab and longer-term opportunities for Alibaba to reposition internationally.
Consumer Discretionary
Shares were up over 30% following a relatively small topline beat of 4.8% and a narrower than expected operating loss of $495.6m - Oshadhi Kumarasiri sees this as a great opportunity to make substantial gains on the short side in the near term as e-commerce and fintech remain unprofitable after cutting down necessary expenses such as logistics facilities and senior management cash compensation. Oshadhi estimates fair EV at ~$10bn (Gaming: $2bn, e-commerce: $5bn, Fintech: $3bn) vs. the current EV of $33.1bn, which implies 66% downside to Sea’s post-3Q22 price.
