Sea Limited: Good 1Q, partly aided by seasonality, consistent margin uptake key

Research evidence excerpt

Sea Limited: Good 1Q, partly aided by seasonality, consistent margin uptake key

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Sea Limited

Good 1Q, partly aided by seasonality,

consistent margin uptake key

Reiterate Rating: BUY | PO: 120.00 USD | Price: 94.23 USD

Healthy top-line and EBITDA beat across segments 12 May 2026

Sea reported 5-8% revenue beat vs BofAe/consensus and Adj EBITDA at $1bn was a Equity

strong beat vs expectations. Shopee’s 1Q margins were 60bps vs BofAe/consensus at

55bps. Shopee GMV +30% YoY, 5% ahead of BofAe/partly seasonality led. Healthy

Key Changes

growth in paying users led to strong revenue/EBITDA for Garena, ahead of est. Mgmt

reiterated FY26 guide & highlighted Asia & Brazil remain profitable for Shopee. Post 1Q, (US$) Previous Current

we tweak FY26/27E EPS and roll forward our target EBITDA multiples to 2027: 10X for Price Obj. 125.00 120.00

Garena, 15X for Shopee and 10x for Monee. As a result, our PO reduces to $120 (vs 2026E EPS 3.12 2.93

$125 earlier). Reiterate Buy rating, given favorable risk reward. 2027E EPS 4.15 4.05

2028E EPS 5.11 5.70

During con-call, mgmt highlighted that Shopee’s growth was partly led by seasonality

and rest being broad-based across Brazil & SE Asia (slightly faster growth in Brazil). The

platform is seeing more fulfillment in Brazil, as well as more sellers joining the platform Sachin Salgaonkar >> Research Analyst

that contribute to a high-end user segment attractiveness. For Brazil, mgmt does not BofAS India

see any change to profitable growth trajectory going ahead. +91sachin.salgaonkar@bofa.com22 6632 8667

Re-investing take rate rise; Arena of Valor not one-off PankajResearchMehendirattaAnalyst >>

1) A big part of e-com take rate increase reinvested into the market to drive growth but BofAS+91 22India6632 8684