Sea Ltd Reiterate OW post 1Q26 but lower mid-term forecasts on higher cost of growth

Research evidence excerpt

Sea Ltd Reiterate OW post 1Q26 but lower mid-term forecasts on higher cost of growth

Ranjan Sharma, CFA AC Asia Pacific Equity Research

(65) 6882-1303 14 May 2026 J P M O R G A N

ranjan.x.sharma@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

We anticipate SE to deliver strong revenue and earnings growth.

Shopee is prioritizing growth. Our calculation shows that

Shopee possibly has negative working capital and, hence,

growth objectives could be supported by relatively low capital

from SE. A larger scale enables lower unit costs, a stronger

competitive position and better pricing power, and unlocks ad

revenues. A larger platform eventually allows for multiple

avenues to improve profitability. Moreover, as Shopee and

Monee build larger businesses with a larger customer base and

YTD 1m 3m 12m deeper customer engagement, SE should be able to generate

Abs -26.7% 8.2% -12.4% -39.3% more data for its AI products and services. However, it is unclear

Rel -31.1% 8.1% -10.9% -55.8%

at this stage what AI products and services SE could pursue. We

Company Data recommend OW on SE.

Shares O/S (mn) 633

Valuation52-week range ($) 199.30-77.05

Market cap ($ mn) 59,185 Our June 2027 price target of $163 is based on our sum-of-the-

Exchange rate 1.00 parts valuation. We value Garena’s gaming business at 13x P/E,

Free float (%) -

3M ADV (mn) 5.17 at a discount to the peer average due to the risks associated with

3M ADV ($ mn) 469.0 a quasi-single title franchise. We value SE’s ecommerce

Volatility (90 Day) 57 franchise at 15x EV/EBITDA, higher than peers and inline with

Index NYSE COMPOSITE

BBG ANR (Buy | Hold | Sell) 34|3|0 MELI. We value the fintech franchise at an EBITDA multiple of

15x, higher than peers' average on the faster growth of Monee.