Sea Ltd SE (former Garena)

[winston]

not vested

Margin recovery in sight

SE is increasingly embedding AI across its ecosystem; we see this as a structural driver of efficiency gains and long-term monetisation uplift.

Our positive FY26F expectations:
a) e-commerce margins improve as reinvestment bears fruit;
b) financial services grow with loan book expansion.

Reiterate Add, with an unchanged TP of US$195.

Attractive entry point with upside skew after 42% share price correction since Sep 25 peak, in our view.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... FAE6F2BA88

[winston]

not vested

Balancing growth and margins to deepen its moat

We expect 4Q25F group adj. EBITDA to be in line with consensus estimate of USD843mn, affected by normalisation of Gaming adj EBITDA to USD355mn (-24% q/q) and supported by e-commerce at USD208mn (+12% q/q) and Fintech at USD298mn (+15% q/q).

We project FY26F adj group EBITDA of USD4175mn in FY26F implying 20% growth (vs 27% earlier).

Our revised projections are 6% below consensus due to flat e-commerce margins in FY26F (vs higher margins earlier) as Shopee focuses on scale and investments in an otherwise improving competitive environment.

BUY with a revised TP of USD175 (prev USD205) as we lower the e-commerce multiple to 2.5x EV to 12m sales (vs 3.5x earlier).

Currently, its e-commerce business is trading at 12m forward EV to sales of just 1.0 x at a ~60% discount to e-commerce peers.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=29583

[winston]

not vested

Rise of AI commerce: assessing risks and upside

AI: Shopee uncertainties; Monee opportunities

AI commerce is gaining momentum, which is raising increasing concerns over Shopee’s demand ownership & monetisation durability.

We have analysed Shopee’s unit economics under multiple AI commerce scenarios.

The outcomes are asymmetric: in our best case (AI -additive demand), Sea’s TP could rise to USD186 (up 21%), while bear case (logistics-utility risk) implies downside to USD72 (down 54%).

Despite the AI-related Shopee uncertainties, we see Monee well positioned to benefit from AI-driven payments while also capturing a portion of Shopee’s monetisation upside.

BUY, TP: USD156 (SoTP)

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/515170.pdf

[winston]

not vested

Sea shares drop after earnings fall short on tough competition

By Olivia Poh

Posted net income of US$410.9 million (RM1.61 billion) for the three months through December. While that was an increase of 73% from a year earlier, analysts predicted US$442 million on average.

Outside of its home market, competition is intensifying in Brazil and other parts of Latin America, where Sea faces off against TikTok, Shein and Temu in a fight for market share.

Source: Bloomberg

https://theedgemalaysia.com/node/794816

[winston]

vested

2025: A Strong Finish With Confident Outlook; Maintain Conviction BUY

2025 revenue of US$22.9b (+36% yoy) beat our forecast by 5%, while net profit of US$1.6b (+260% yoy) was in line with our forecast but missed consensus estimate by 11%.

Shopee delivered strong 4Q25 GMV growth of 29% yoy (+14% qoq) with continued take-rate expansion, while Monee’s loan book surged 80% yoy.

Maintain BUY with a 10% lower target price of US$181.18 (from US$200.18).

Source: UOBKH

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

[winston]

vested

Weak EBITDA Guidance but core drivers remain strong

4Q25 group adj EBITDA of USD787.1mn (+33% y/y, -10% q/q) was ~6% below the consensus’ due to lower-than-expected Adj EBITDA from E-commerce and FinTech

FY26F e-commerce guidance implies 30+% cut to FY26F consensus adj EBITDA for E-commerce of USD1.38bn, Consensus also likely to lower FY26F fintech adj EBITDA by 15% due to lower margins.

SE is front-loading opex over the next 6-7 months to increase its wallet share and customer base.

Maintain Buy with a lower TP of USD151 (prev USD175).

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=29911

[winston]

Headwinds from TikTok Shop are priced in

Shopee’s adj 1Q26F EBITDA could be 3-4% lower than consensus due to rapid growth of TikTok shop in Southeast Asia as evidenced by 80% y/y & 14% q/q growth in the parcel volume of J&T Express in 1Q26F

A potential strategic shift by TikTok Shop to focus on customer retention in late 2026/ early 2027 could act as a catalyst for Sea Ltd.

Maintain BUY with a lower TP of USD138 (previous USD151);

SE trades at 13.3x 12M forward EV/Adj EBITDA, at a 7% discount to GRAB’s 14.4x (versus 2-year average discount of 23%).

While we like Sea Ltd, GRAB is our preferred near-term pick.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=30516

[winston]

not vested

Sea reports 6.2% increase in Q1 earnings to US$427.9 million

The group’s revenue is up 46.6% year on year at US$7.1 billion

by Benjamin Cher

Revenue for e-commerce arm Shopee grew 44.4 per cent to US$4.5 billion, from US$3.1 billion a year earlier;

Monee, reported a 57.8 per cent increase in revenue to US$1.2 billion in Q1 2026, from US$787.1 million a year earlier.

Garena's revenue rose 40.6 per cent to US$696.6 million, from US$495.6 million a year earlier.

Source: Business Times

https://www.businesstimes.com.sg/compan ... -9-million

[winston]

not vested

Accelerating monetisation

A positive surprise was strong gaming booking revenue from IP collaboration, for which we expect the momentum to continue with double-digit growth.

Shopee monetisation continues to pick up; we project margin recovery in 2H26F driven by higher take rates and logistics scale benefits.

Maintain Add on stronger 2H26F earnings momentum from Shopee margin recovery, DFS growth and sustained Garena engagement.

TP: US$195

Source: CGS

https://rfs.cgsi.com/api/download?file= ... a406932b5f

[winston]

not vested

First take - 1Q26 profitability beat to lift the share price

1Q26 group adj EBITDA of USD1.03bn (+9% y/y, +31% q/q) was ~16% above consensus, driven by stronger-than-expected Gaming and E-commerce profitability

Shopee GMV grew 30% y/y (+2% q/q) to USD37.3bn, ~3% above consensus, while Gaming bookings rose 20% y/y (+39% q/q) to USD931mn, 23% ahead of consensus.

We see a sharp Shopee GMV as a clear sign of duopoly as TikTok Shop has achieved an explosive 90-100% y/y GMV growth in 2025 vs an estimated sector growth of 15-20% in Southeast Asia.

Maintain BUY with an unchanged TP of USD138

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=30922