Maybank Investment Bank has reduced Singapore-based tech giant Sea‘s FY26-27 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates by 8 percent to 10 percent on lower margin assumptions.
The research house said in a note on Wednesday that in the fourth quarter of 2025, Sea sustained strong growth momentum, with Shopee gross merchandise value (GMV) and Monee’s loan book expanding 28 percent and 80 percent year on year, respectively — 3 percent to 5 percent ahead of expectations.
However, it noted their EBITDA margins softened both year on year and quarter on quarter, resulting in the quarterly adjusted EBITDA coming in 6 percent below consensus.
“The miss was primarily driven by calibrated investments to reinforce structural moats, which we believe position the company for long-term gains and greater resilience in an artificial intelligence (AI)-driven landscape,” said Maybank.
According to the research house, Shopee is advancing “Phase 2” logistics, extending beyond 30 million+ daily SPX parcels into warehousing to enable same/next-day delivery.
Fulfilment penetration stands at 2 percent to 3 percent in Brazil and high-single digit in Southeast Asia, with a target to double/triple by end-FY26.
“Investments are largely operating expenditure (OPEX)-driven and upfront, pressuring near-term margins, but management expects visible return of investment (ROI) by the fourth quarter of 2026 — resetting the margin base and paving the way for recovery in FY27,” said Maybank.
It added faster delivery lifts buyer spending (about 15 percent), supports higher take rates and ad yields (2 percent to 3 percent versus 4 percent to 6 percent in China), and builds a logistics moat difficult for competitors or AI agents to bypass.
“Management reiterated its long-term margins target of 2 percent to 3 percent. We trim our FY26 Shopee adjusted EBITDA/GMV margins to 0.7 percent, rising to 1.4 percent by FY28,” it said.
Meanwhile, Monee delivered a strong FY25 with revenue of $3.8 billion (+43 percent year on year), with loan book surpassing $9 billion (+80 percent year on year) and 90-day non-performing loan (NPLs) stable at 1.1 percent, reflecting disciplined underwriting.
Its active credit users reached 37 million (+40 percent), with offShopee SPayLater loans surging more than 300 percent year on year to more than 15 percent of the portfolio (Malaysia: 30 percent).
Its margins, however, moderated in the fourth quarter of 2025 due to product and country mix shifts, expansion into lower-yield markets and deliberate return on assets (ROA) optimization to capture scale.
Indonesia remains core, while Brazil and the Philippines are scaling rapidly.
“Medium term, (its) AI-led underwriting and standalone app expansion should drive sustainable growth while preserving asset quality,” said Maybank.
Maybank highlighted that Sea enters FY26 prioritizing growth, but unlike FY23–24 when it slipped into losses, investments are disciplined with clear profit guardrails.
It noted Shopee targets about 25 percent GMV growth with FY26 EBITDA no lower than FY25’s in absolute dollars, despite upfront OPEX-led fulfilment investments.
“Competitive intensity remains rational across markets, reducing risk of subsidy-led spirals,” it said.
It also said Monee expects strong loan growth, although margins may compress driven by higher growth coming from lower interest-yielding markets.
“Garena guides for high single- to double-digit growth post a blockbuster 2025, signaling sustained momentum into Free Fire’s 10th anniversary in 2027,” it added.
Overall, Maybank forecasts FY24-27 revenue compound annual growth rate (CAGR) of 25 percent for Sea, driven by all its three business segments.
The firm’s adjusted EBITDA is expected to grow at a 42 percent CAGR, helped by e-commerce business and digital financial services.
Maybank also estimated its ASEAN GMV to grow at a 19 percent CAGR over 2030.
It opined that the firm’s own logistics and strong balance sheet remains key competitive moat.
Risk of TikTok disruption is abating while cross-border platforms have unfavorable unit economics in ASEAN, it added.
Although Sea’s gaming business is highly dependent on Free Fire, Maybank sees it is a defensive franchise with its position in less crowded and budget conscious emerging markets.
Stronger-than-expected user growth (across all businesses); share buybacks and seller take rate increases and ad penetration leading to better than expected margins improvements, are the firm’s potential upsides.
However, its potential downsides include weaker-than-expected consumer spending in the region amid macro uncertainties hurting Shopee’s GMV growth; slowing user growth metrics, especially if this is due to increasing competition across Southeast Asia’s offerings.
Higher-than-expected credit costs for SeaMoney due to a slowdown in economic growth; new entrants which could intensify competition in the Southeast Asia e-commerce industry, are also its potential hurdles.
Sea is a Singapore-founded internet company with businesses in digital entertainment, e-commerce, and digital financial services. It has dominant e-commerce market share in ASEAN and Taiwan.