Sea Ltd SE (former Garena)

[winston]

not vested

What is really driving the share price?

Over the last 12-months, Gaming has pipped E-commerce as the key share price driver while Loan-book growth has also begun to drive the share price

Gaming is a big beneficiary of AI and could surprise in FY26F if “Free City” performs well;

Fintech is the fastest growing business with higher adjusted EBITDA than E-commerce

BUY with a higher TP of USD241 (previous: USD204) led by higher growth and valuation of Gaming & Fintech segments

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=27797

[winston]

not vested

Sep 10, 2025

From scale to monetization; Reiterate Buy

All cylinders firing; Raise TP to USD238 from USD205 Shopee raised seller commission by ~1-1.5ppt (2nd in 12 months) with minimal pushback

ASEAN survey shows only 13% cut spend, most see online as cheaper, and 2/3 sellers neutral/positive.

We expect 0.1 – 0.2ppt margin lift, with bigger upside from faster offline-to-online transition and fintech (BNPL) monetization.

Garena is sustaining Free Fire via collaborations, an elevated publishing pipeline while AI adoption allows for costs control.

We raise our adjusted EBITDA estimates by 10 - 13% and lift our TP by 16% to USD238.

SE trades at 2.9x EV/sales, and 24.1x EV/EBITDA — in line, but at a 13–35% growth-adjusted discount. BUY.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/485132.pdf

[winston]

not vested

Sep 09, 2025

JPMorgan maintains Sea Ltd stock rating, cites rising e-commerce take rates

Investing.com - JPMorgan has reiterated its Overweight rating and $208.00 price target on Sea Ltd. (NYSE:SE), highlighting significant take-rate increases across major e-commerce platforms in ASEAN markets.

The stock, which has delivered an impressive 79.61% return year-to-date, currently trades at $190.57.

According to Investing Pro data, analyst targets range from $165 to $241, with the company maintaining a GREAT financial health score.

The investment bank noted that Shopee, TikTok Shop and Lazada, have all raised their Marketplace and Mall effective take rates in several ASEAN countries, with TikTok Shop implementing the most substantial increases and now leading in take-rate in many countries.

JPMorgan views these industry-wide changes as reflecting "increased focus on profitability and sustainable growth" in the ASEAN e-commerce sector, potentially allowing platforms to reinvest higher revenues into growth initiatives.

While the firm observed that Shopee appears to be discontinuing its opt-in shipping fee program in some countries and offering shipping discount vouchers to all sellers, suggesting the take-rate increases might not fully translate to margin improvements in the near term.

JPMorgan’s FY26E adjusted EBITDA forecast for Sea Ltd. remains more than 20% above consensus estimates, with the bank suggesting that "scale benefits and growth in ad revenues, are likely to drive positive revisions" to Sea’s revenue and margin expectations in the mid-to-long term.

In other recent news, Sea Limited reported its second-quarter earnings for 2025, delivering a mixed financial performance.

The company missed its earnings per share (EPS) forecast, posting an actual EPS of $0.65 compared to the projected $0.77, a shortfall of 15.58%.

However, Sea Limited’s revenue exceeded expectations, reaching $5.3 billion, marking a 38% increase year-over-year against the forecasted $4.55 billion.

Despite the EPS miss, the strong revenue growth fueled positive investor sentiment.

In another development, Bernstein SocGen Group raised its price target for Sea Limited to $210 from $180, while maintaining an Outperform rating on the stock.

The firm highlighted Sea Ltd.’s notable recovery, emphasizing the stock’s significant increase over the past 18 months. These recent developments underscore the company’s strategic initiatives and market performance.

Source: investing.com

https://www.investing.com/news/analyst- ... CH-4230607

[winston]

not vested

Sea Stock Steadies After Analyst Upgrades View To Buy Following Sell-Off

by RYAN DEFFENBAUGH

Sea's Shopee is the dominant e-commerce platform in Southeast Asia but competes with MercadoLibre in some Latin American markets including Brazil.

JPMorgan attributed the decline to "increased investor concerns about e-commerce margins and new market expansion for Shopee.

Source: IBD

https://finance.yahoo.com/m/76ed2ed3-3d ... after.html

[winston]

Reinvestment for growth

Shopee entered a reinvestment phase and Monee expanded its loan portfolio, which could drag near-term margins but support long-term growth.

3Q25F adj EBITDA likely fell qoq with lower margins from e-commerce and digital financial services amidst solid bookings revenue from Garena.

We expect short-term share price weakness but upgrade to Add with a higher TP of US$185 on anticipated margin improvement in FY26-27F.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 006790f90b

[winston]

not vested

Growth takes precedence over margins; Downgrade to HOLD

Take a pause until margin trajectory gains clarity

We lower our 2025–27E earnings for SE by 8–24% on softer margin assumptions across key segments and cut our target price by 28% to USD172.

With Shopee pursuing a more growth-oriented strategy amid slight competitive pressures, we expect margin improvement to slow.

We forecast Shopee adj. EBITDA-to-GMV margins to decline 20bps in 2H25 (vs. 1H25) and improve by only about 30bps per year in 2026–27.

Monee (DFS) margins are likely to fall 170bps over two years due to lower interest yields and higher S&M spend, while Garena margins face pressure from growth investments.

Pending clearer visibility on margin trajectories, we downgrade SE to a non-consensus HOLD.

Our adj. EBITDA forecasts are 67% below consensus.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/491885.pdf

[winston]

not vested

Lower Margins in 3Q25F - Watch out for Three Share Price Drivers

3Q25F group adj. EBITDA likely to be 3-4% below consensus (USD885mn) primarily due to lower e-commerce margins. Watch out for Top 3 share price drivers.

We think Shopee is encouraging more online sales in the face of new tax burden on sellers and pro-actively defending its share from a cash rich TikTok Shop.

We cut FY25F/26F group adj EBITDA by 10%/9% on lower margins in e-commerce and fintech.

BUY SE with a reduced TP of USD221 (previous: USD241) with e-commerce comprising 60% of our valuation (Prev 63%).

We continue to value e-commerce on EV/Revenue and rest of the business on EV/EBITDA.

Potential M&A activity in smaller e-commerce players could be a significant catalyst.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=28284

[winston]

MELI’s 3Q25: lower free shipping threshold is working

MELI’s 3Q25: key read-throughs

In 2Q25, MercadoLibre (MELI) made several competitive moves to solidify its dominance in Brazil’s e-commerce market, particularly in the low ASP segment where Shopee has a stronghold.

Key initiatives included a ~40% fee cut for items priced between BRL79–L200 and a drop in the free shipping threshold from BRL79 to BRL19.

These changes were combined with a ~47% YoY increase in marketing spending across its markets in 2Q/3Q25. These measures drove a sharp increase in buyer activity in 3Q25 — with items sold in Brazil growing to 42% YoY in 3Q vs 26% YoY in 2Q25.

Despite lower free shipping threshold, shipping unit cost in Brazil fell 8% QoQ due to scale leverage and better use of “slow shipping” capacity. However, these growth initiatives came at a near-term cost, with 3Q25 operating margins declining 70bps YoY/240bps QoQ and missing street expectations by 5%, as MELI prioritized user growth and platform engagement over profitability.

Management noted it’s willing to sacrifice near-term margins for long-term market share and scale.

TP: US$172

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/493483.pdf