Sea Ltd SE (former Garena)

[winston]

not vested

Playing the long game

3Q25 results beat estimates, thanks to strong gaming momentum despite the e-commerce segment coming in below Bloomberg expectations.

Management reiterated that it is prioritising revenue growth and expects gradual yoy margin improvement for FY26-27F.

Reiterate Add with a higher TP of US$195 as we believe investment initiatives will yield results and lead to operational efficiency in coming years.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... eb5823a2ba

[winston]

not vested

3Q25: Minor Reinvestment To Unlock Bigger Potential Highlights

3Q25 results were below expectations as Shopee’s higher S&M spend compressed margins despite top-line growth across all segments.

Monee’s rapid scaling and Garena’s rebound offset e-commerce margin dip.

We believe minor reinvestments in 3Q25 could unlock stronger future growth.

Maintain BUY with a 2% lower target price of US$200.18 (from US$204.85).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

not vested

Sea announces first share buyback of up to US$1 billion

by Shikhar Gupta

May buy back up to US$1 billion of its American depositary shares.

The move comes a week after the company reported a 144.6 per cent rise in its third-quarter earnings to US$375 million, from US$153.3 million in the year-ago period.

Source: Business Times

https://www.businesstimes.com.sg/compan ... s1-billion

[winston]

not vested

Thoughts on USD1b share repurchase program

What’s new? Sea Ltd announced a USD1bn share repurchase authorisation, signalling confidence in its long-term outlook.

The company may buy back ADSs via open-market trades, private deals, block trades or derivatives.

The timeline for the buyback was not disclosed.

Given the stock’s market cap of USD90b and average daily trading value of ~USD700m, the program is meaningful but not large relative to market cap and liquidity (1.1% of market cap and 1.4x of average trading value).

Retain HOLD rating and USD156 TP.

Source: Maybank

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mkefactsettd.maybank-ke.com/PDFS/498461.pdf

[winston]

not vested

How to value E-commerce?

The share price has declined 25% from its recent peak, on FY26F e-commerce margin concerns.

GMV growth is more important than margins at this stage to improve its AI and delivery moat to accelerate the exit of small players in our view.

Management is optimistic about e-commerce margins to improve in FY26F despite continued investments.

E-commerce business is trading at just 1.7x 12-month forward EV/Revenue, at a ~40% discount to its, peers ignoring its revenue growth potential (22% CAGR vs peers’ 13% over FY25F-27F).

BUY SE with a revised TP of USD205 (previous: USD221) as we value e-commerce at 3.5x 12-month forward revenue vs 4.0x earlier to reflect a drop in the peer average.

Key catalysts would be share-buyback (mandate of USD1bn) and potential exit of smaller players

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=28711

[winston]

not vested

Correction overdone; upgrade to BUY

Risks priced in; growth pillars mostly intact

After a ~36% share price correction from its 2025 peak, we see an attractive risk-reward skew for Sea.

Ongoing investments in the VIP program & fulfilment strengthen Shopee’s competitive position in ASEAN, while Lazada’s continued decline points to a more rational 2-player market – paving way for lift in 2027 monetisation.

In our bear case, intensified competition in Brazil & VIP-related spend reduce Shopee margins by ~30bps; already largely priced into street cuts.

While nearterm Shopee monetisation is partly deferred, incremental upside can accrue via Monee.

Garena-related single franchise valuation risk is contained by its ~15% SoTP weight. We Upgrade Sea to BUY and retain our USD156 TP.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/505527.pdf

[winston]

not vested

Investor discussion takeaways; thoughts on stock weakness

BUY; weakness offers an attractive entry point

Sea Ltd’s share price has retraced sharply, giving up all its early-2026 gains and falling ~13% in the past six trading sessions.

Following our 2 Jan upgrade (Correction overdone; upgrade to BUY) our investor discussions have focused on questions around the rationale for higher seller commissions in Brazil and the lack of near-term catalysts ahead of highly anticipated 2026 Shopee margin guidance.

In contrast to early 2025, Shopee’s 2026 seller take-rate adjustments in ASEAN have been modest but broadly within expectation.

While some concerns persist, we do not view them as sufficiently incremental to justify the recent de-rating.

With the stock now 37% below 2025’s peak, we believe Brazil and margin-related risks are largely priced in, while easing competitive pressures in Taiwan—following Coupang’s cyber incident and management changes (link, link)—are incrementally positive.

We view the pullback as an attractive entry opportunity. Retain our BUY rating and SOTP-based TP of USD156.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/507323.pdf

[winston]

not vested

Investor discussion takeaways; thoughts on stock weakness

BUY; weakness offers an attractive entry point

Sea Ltd’s share price has retraced sharply, giving up all its early-2026 gains and falling ~13% in the past six trading sessions.

Following our 2 Jan upgrade (Correction overdone; upgrade to BUY) our investor discussions have focused on questions around the rationale for higher seller commissions in Brazil and the lack of near-term catalysts ahead of highly anticipated 2026 Shopee margin guidance.

In contrast to early 2025, Shopee’s 2026 seller take-rate adjustments in ASEAN have been modest but broadly within expectation.

While some concerns persist, we do not view them as sufficiently incremental to justify the recent de-rating.

With the stock now 37% below 2025’s peak, we believe Brazil and margin-related risks are largely priced in, while easing competitive pressures in Taiwan—following Coupang’s cyber incident and management changes (link, link)—are incrementally positive.

We view the pullback as an attractive entry opportunity. Retain our BUY rating and SOTP-based TP of USD156.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/507323.pdf

[winston]

not vested

TikTok Shop’s hyper growth concerns investors

Sea Ltd’s (SE) share price has dropped ~15% in the last two weeks prompting concerns about sector competition from TikTok Shop (TTS).

Shopee’s GMV is growing near 20%, but TTS is growing much faster in our estimates.

SE’s e-commerce business trading at just 1.1x EV to 12month sales vs e-commerce peers trading near 2.5x.

Maintain BUY on SE with unchanged TP of USD205.

A potential exit of Lazada be the key catalyst for a stable duopoly in SE Asia.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=29268

[winston]

not vested

Competitive easing supports margin improvement outlook

Shopee: pouring in positive news, SE: Reiterate BUY

Recent developments across Shopee-operated markets signal broad-based competitive rationalization, easing investor concerns around margin pressure.

In Brazil, Mercado Livre will lift shipping fees on BRL49–79 items by 14‑21% from Mar‑26, reversing last year’s aggressive subsidies.

In Indonesia, TikTok Shop raised seller commission rates by 0.8 ppt to 9.6%, now ~55 bps above Shopee, indicating more disciplined pricing.

In Taiwan, Coupang faces execution risks following a cyberattack and key executive resignations, with our checks showing softer late-2025 competitive intensity.

Collectively, these trends support a favourable environment for Shopee margin improvement.

Reiterate BUY with SoTP based TP of USD156

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/508700.pdf