2025-06-09-花旗集团-Sea_Limited（SE）_Sea公司（股票代码_SE.N）_越南投资者活动要点；保持建设性态度_15页_714kb

Sea (SE.N) Investor Event Summary

Core Content

Citi co-hosted a Sea Investor event in Ho Chi Minh City on June 5, 2025, which provided insights into Sea's strategic initiatives and growth opportunities in Vietnam. The report concludes with a Buy recommendation and a Target Price (TP) of US$182, based on the company's strong execution and structural growth potential in the Southeast Asian market.

Main Points

• Economic Growth and Government Support:
  Vietnam is experiencing solid economic growth, with a GDP growth rate of 7.1% in 2024 and a target of 8% in 2025E. The government remains supportive of foreign businesses, including Shopee, despite US tariff concerns. This creates a favorable environment for Sea's operations and expansion.

• Market Structure and Opportunities:
  Vietnam's market is characterized by a relatively even distribution of growth across 1st, 2nd, and 3rd tier cities, supported by a large, young, and skilled labor force. This makes it an attractive market for Sea's e-commerce and logistics expansion.

• Shopee's Competitive Position:
  Shopee faces competition from TikTok in Vietnam, but the company is optimistic about its growth potential due to a strong user base, increasing purchase frequency, and larger base of sellers and buyers. Shopee also benefits from a healthy live-streaming and content commerce ecosystem, which is in its early stages of adoption.

• Logistics and Delivery Optimization:
  Sea's logistics arm, Shopee Express (SPX), has been expanding and optimizing its operations. In 2025, SPX aims to further reduce delivery costs and improve speed consistency through automation and better operational efficiency. The zero-shipping fee initiative has already shown positive results in boosting order volume.

• Content Ecosystem Development:
  Shopee has been investing heavily in its content ecosystem, including Shopee Live and Shopee Video, which are driving user engagement and GMV growth. The company is collaborating with KOLs and MCNs to expand its live-streaming capabilities, which are still in early stages compared to the more mature Chinese market.

• Fintech Potential:
  While Vietnam's fintech environment is not as developed as in other regions, there is significant upside potential for Sea's digital financial services (DFS) business. The company is working on integrating its e-wallet services with Shopee, and there is a potential to convert Shopee users into Monee users.

• Financial Performance and Valuation:

  • Revenue Growth: Expected to grow steadily from US$13,064m in 2023 to US$28,541m in 2027E.
  • Gross Margin: Projected to improve from 44.7% in 2023 to 44.8% in 2027E.
  • EBITDA Margin (Adj): Expected to rise from 9.0% in 2023 to 16.9% in 2027E.
  • Net Profit (Core NPAT): Projected to increase from US$954m in 2023 to US$3,721m in 2027E.
  • Valuation Ratios:
    • P/E (2025E): 40.4x
    • P/B (2025E): 8.8x
    • EV/EBITDA (2025E): 24.6x
    • Free Cash Flow Yield (2025E): 0.6%
  • Target Price (TP): US$182, reflecting a 9.9% expected share price return.

Key Focus Areas for 2025

• Improving Buyer Experience:
  Enhancing purchase experience through better logistics, competitive pricing, and user-friendly platforms.

• Strengthening Logistics Network:
  Further streamlining delivery processes and reducing costs through automation and increased market presence.

• Expanding Content Ecosystem:
  Deepening engagement with KOLs and MCNs, and enhancing marketing systems to drive growth in live-streaming and content commerce.

• Fintech Expansion:
  Exploring new fintech products and services, leveraging the growing adoption of digital payments.

Investment Strategy

• Buy Rating: Citi maintains a Buy rating on Sea, citing proven management, improving growth visibility, and stabilizing competitive landscape.
• Valuation Approach: A sum-of-the-parts (SOTP) approach is used to evaluate Sea, with the target price of US$182 derived from:
  • Digital Entertainment (Garena): US$24.3 per share, based on a 15x 2026E PE multiple.
  • E-commerce (Shopee): US$114.3 per share, based on a 13% normalized take rate and 4.0x 2026E P/S multiple.
  • Digital Financial Services (DFS): US$32.3 per share, based on a 5x P/S multiple.
  • Net Cash per Share: US$11.0 as of 1Q25.

Risks

• Market Share Loss: Shopee could continue to lose market share if competition intensifies.
• Subsidy Dependency: Continued reliance on subsidies may hinder sustainable growth.
• Performance of Free Fire: A weaker-than-expected performance of the game could impact overall results.
• Regulatory and Political Risks: Operating in seven regulatory jurisdictions and potential changes in the political landscape could affect operations.

Summary of Key Financial Metrics

Metric	2023	2024	2025E	2026E	2027E
Sales Revenue (US$m)	13,064	16,820	20,888	25,034	28,541
Gross Profit (US$m)	5,834	7,205	9,767	11,078	12,777
EBITDA (Adj) (US$m)	1,179	1,962	3,816	3,975	4,819
Pre-tax Profit (US$m)	432	779	2,366	2,535	3,271
Net Profit (Core NPAT) (US$m)	954	1,160	2,611	2,935	3,721
Market Cap (US$m)	98,044	98,044	98,044	98,044	98,044

Conclusion

The Citi report concludes that despite intense competition, Sea's execution and structural growth opportunities in Vietnam are strong, supported by economic growth, government support, and a vibrant consumer base. The company is expected to maintain its competitive edge through logistics optimization, content ecosystem development, and fintech expansion. The Buy recommendation is based on positive growth outlook, improving margins, and strong market position.