Sea Ltd. Maintains Strong Growth Momentum Across All Segments March 18, 2026

Company Overview

Sea Ltd. is a leading Southeast Asian technology conglomerate operating three core businesses: Shopee (e-commerce), Monee (digital financial services), and Garena (digital entertainment). The company has established itself as a dominant player in the region’s digital economy, leveraging synergies across its platforms to drive user engagement and monetisation.

Financial Performance and Outlook

Sea Ltd. delivered solid fourth-quarter 2025 results with revenue meeting expectations, though profit after tax and minority interests (PATMI) underperformed due to strategic investments in Shopee’s logistics, fulfilment, and user-engagement capabilities. For the full year 2025, revenue and PATMI reached 103% and 89% of estimates respectively. The company demonstrated robust growth with revenue increasing 38% year-on-year whilst PATMI surged 73% year-on-year.

Phillip Securities Research maintains its BUY recommendation with an unchanged target price of US$170, derived from a discounted cash flow model using a terminal growth rate of 4.0% and weighted average cost of capital of 7.6%. The firm has rolled forward valuations to FY26e and reduced FY26e PATMI estimates by 1% to account for increased e-commerce investments.

Strong Performance Across All Business Segments

Shopee continued its impressive growth trajectory with gross merchandise value (GMV) rising 29% year-on-year and gross orders increasing 30% year-on-year. The platform achieved stronger monetisation through advertising, with ad revenue jumping 70% year-on-year driven by a 20% increase in ad-paying sellers and 45% growth in average ad spend per seller. Monthly active buyers grew 15% year-on-year, whilst innovative initiatives like Shopee VIP membership saw subscribers double in just one quarter. Management expects this momentum to persist, guiding for 25% GMV growth in FY26e.

Monee demonstrated exceptional expansion with loan principal surging 80% year-on-year to US$9.2 billion. Active credit users increased 40% year-on-year following the transition from a whitelist model to an “all-can-apply” approach. The 90-day non-performing loan ratio remained stable at 1.1%, supported by enhanced underwriting models utilising ecosystem data and artificial intelligence. Monee’s adjusted EBITDA exceeded US$1 billion in FY25, now surpassing Shopee as a profit contributor.

Garena maintained its position as a durable revenue generator with bookings growing 37% year-on-year to US$2.9 billion. Free Fire achieved two consecutive years of over 30% year-on-year bookings growth, supported by major intellectual property collaborations and newer titles such as EA SPORTS FC Mobile.

Frequently Asked Questions

Q: What is Phillip Securities Research’s recommendation and target price for Sea Ltd.?
A: Phillip Securities Research maintains a BUY recommendation with a target price of US$170, unchanged from previous estimates.

Q: How did Sea Ltd.’s financial performance compare to expectations in 4Q25?
A: Revenue was in line with expectations, whilst PATMI underperformed due to elevated investments in Shopee’s logistics, fulfilment, and user engagement. Full-year revenue and PATMI reached 103% and 89% of estimates respectively.

Q: What drove Shopee’s strong performance in the quarter?
A: Shopee’s growth was driven by GMV increasing 29% year-on-year, gross orders rising 30% year-on-year, and stronger monetisation through advertising revenue growth of 70% year-on-year.

Q: How is Monee’s loan portfolio performing in terms of quality?
A: The 90-day non-performing loan ratio remains stable at 1.1%, supported by improved underwriting models that leverage ecosystem data and AI technology.

Q: What are management’s expectations for Shopee’s growth in FY26e?
A: Management expects momentum to continue and has guided for 25% GMV growth in FY26e, supported by further investments in fulfilment, logistics, and user engagement.

Q: Which business segment is the largest profit contributor for Sea Ltd.?
A: Monee has become a key profit driver with FY25 adjusted EBITDA exceeding US$1 billion, now surpassing Shopee and ranking second to Garena in terms of profit contribution.

Q: How has Garena performed over the past two years?
A: Garena has demonstrated durability with Free Fire achieving two consecutive years of over 30% year-on-year bookings growth, whilst FY25 bookings increased 37% year-on-year to US$2.9 billion.

Sea Ltd. Maintains Strong Growth Momentum Across All Segments

This article has been auto-generated using AI tools. It is based on a report by a Phillip Securities Research analyst.

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