Sea(US:SE) 智通财经网·2025-07-31 08:48Core Viewpoint - UBS maintains a "buy" rating for Sea Ltd, reaffirming a target price of $200, indicating a potential upside of approximately 24% over the next 12 months, driven by confidence in the improvement of Sea's core business and a more rational competitive environment in the e-commerce sector [1][2]. E-commerce Business - The competitive landscape in Southeast Asia's e-commerce market is becoming more rational, particularly for Shopee, allowing Sea to maintain growth without sacrificing profit margins [1][6]. - UBS highlights that Shopee's pricing strategy has effectively limited the risk of a new price war, enabling the company to grow at or above the market average while improving profitability [6]. Financial Services - SeaMoney, the digital financial service segment, is projected to grow significantly, with revenues expected to rise from $1.22 billion in 2022 to $3.45 billion in 2025, potentially achieving profitability around 2025 [9]. - Cost control and operational leverage are key factors in the expected profitability of SeaMoney, alongside its synergy with Shopee's ecosystem [9]. Gaming Business - The digital entertainment segment, Garena, is expected to recover slightly after a decline, with revenues projected to rise from $1.81 billion in 2023 to $2.55 billion in 2025, supported by existing game management and new market expansions [10]. - Despite challenges, Garena is anticipated to provide stable cash flow and support overall profitability for Sea [10]. Financial Projections - UBS forecasts Sea's total revenue to grow from $12.70 billion in 2023 to $21.68 billion in 2025, driven primarily by e-commerce and financial services [3][5]. - The company is expected to achieve significant EBIT growth, with projections of $3.05 billion in 2025, and EPS anticipated to increase from $1.83 in 2024 to $4.11 in 2025 [3][5]. Valuation Comparison - Sea's current valuation metrics, such as EV/EBITDA and P/E ratios, are considered attractive compared to peers in the high-growth internet sector, suggesting potential for valuation expansion [4].