Jul-26: Free Fire soft; E-commerce commissions still rising

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M

Idea

August 5, 2026 10:59 AM GMT

Sea Ltd | Asia Pacific

Morgan Stanley Asia (Singapore) Pte.+

Divya Gangahar Kothiyal

Equity Analyst

Jul-26: Free Fire soft; Ecommerce commissions still

rising

Free Fire revenues declined 8% y/y in July but were up 18% m/m.

MAU trends for Shopee and TikTok remained largely steady.

Regional commission hikes continued, with Shopee raising fees in

MY & TH and TikTok in VN.

Eileen Lin

Research Associate

Morgan Stanley Asia Limited+

Gary Yu

Equity Analyst

Eddy Wang, CFA

Equity Analyst

Joanne Lau

Research Associate

Kathy Zhu

Research Associate

Key Takeaways

Free Fire revenue -8% y/y in Jul (Jun: +1%; 2Q: +13%) on a high base formed by

collaboration with Squid Game last year (launched in Jul 18).

FF MAU growth resilient, +13% y/y (Jun: +15%; 2Q: +13%); downloads -4% y/y.

EC MAU trends remained largely steady: 1) ASEAN: Shopee +4% y/y, TikTok +14%

Sea Ltd (SE.N, SE UN)

y/y; 2) Brazil: MELI +16% y/y, Shopee +9% y/y, TikTok +13%.

ASEAN Internet | Singapore

Taiwan: Coupang's MAU growth moderated to 19% y/y (Jun: +23%). Shopee +2%

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 4, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Avg daily trading value (mn)

y/y (Jun: flattish). On a m/m basis, Coupang +3% vs. Shopee flattish.

TikTok raised EC commissions in VN by ~80bps (effective Jul). Shopee lifted

commissions in MY (cashback prog ~225bps) and TH (~205bps) effective Aug.

SE reports next week: We see cash revenue up 38% y/y to US$7.4bn and adj.

EBITDA up 11% y/y to $922mn in 2Q26. We expect continued growth reinvestment

in EC and model EC adj. EBITDA margin of 61bp in 2Q, broadly in line with consensus

(59bp) and buy-side forecasts. Investors are likely to be focused on:

1. EC margin, comments on outlook (exit rates) for 2026 + ASEAN

profitability.

2. EC competition: Mgmt describe competition as "stable." Investors will track

any comments suggesting more rational competitive behavior in ASEAN

specifically. YTD, we estimate Shopee and TikTok have increased

Overweight

In-Line

US$130.00

17

US$111.44

…