SEA Ltd.: Key debates ahead of Q2 print

研报英文原文证据摘录

SEA Ltd.: Key debates ahead of Q2 print

Equity Research

China Technology

8 July 2026

SEA Ltd.

Key debates ahead of Q2 print

Earnings PreviewWhile we expect SE to report solid Q2 results, we are leaving

our estimates unchanged. Instead, we are highlighting key

medium-term debates; we also include the latest take rate SE OVERWEIGHT

China Technology POSITIVE

table Price Target USD 122.00

Price (16-Jun-26) USD 86.81

Debate #1: Where are Ecommerce margins headed in 2H and, more importantly, in 2027? In Potential Upside/Downside +40.5%

the near-term, for Q2, we expect Ecommerce margins to be stable qoq at around 60 bps. SE Source: Bloomberg, Barclays Research

began its current investment cycle in 2H25, which resulted in ecommerce margins in 2H25

falling below 1H25 levels (1Q, 2Q, 3Q and 4Q margins in '25 were 92bps, 76bps, 58bps, 55bps China Technology

respectively). Ecommerce margins in 1Q26 increased modestly to 60bps, the first sequential Jiong Shao, CFA

improvement in a year. If margins remain stable qoq at around 60bps in 2Q, it would +1 212 526 5562

confirm our view that margins have been bottoming over the past four quarters despite jiong.shao@barclays.com

the ongoing investment cycle. The key debate is whether margins can improve in 2H26, BCI, US

and whether we see a more meaningful step up in margins in 2027 as the company Lian Xiu (Roger) Duan

completes this round of investments. We acknowledge that management highlighted in its +1 212 526 4633

last earnings call continued investment in areas such as fulfillment centers. However, lianxiu.duan@barclays.com

investment cycles rarely follow a straight line. It is possible that the company moderates BCI, US

investments in 2027 to absorb some of the significant capacity added this year, and further Xinyao Song