Sea(US:SE) HTSC·2025-05-15 03:04Investment Rating - The investment rating for the company is "Buy" with a target price of $168.00 [7][8]. Core Insights - The company's revenue for Q1 2025 was $4.84 billion, representing a year-on-year increase of 29.6%, slightly below the consensus estimate of 31.2% due to deferred gaming revenue and lower-than-expected e-commerce revenue [1]. - Adjusted EBITDA for Q1 2025 was $950 million, exceeding the consensus estimate of $700 million, indicating a positive trend in profitability as scale effects become more apparent [1]. - The management maintains a guidance of 20% growth in e-commerce GMV for 2025, with expectations of double-digit growth in active users and bookings in the gaming segment [1]. E-commerce Segment - E-commerce revenue increased by 28.3% to $3.52 billion in Q1 2025, slightly below the consensus estimate of 30.3% [2]. - The adjusted EBITDA for the e-commerce segment was $260 million, with an EBITDA margin of 7.5%, improving by 8.3 percentage points year-on-year [2]. - The number of e-commerce orders and GMV grew by 19% and 22% respectively, with management focusing on enhancing service quality to drive more merchants to use advertising tools [2]. Electronic Payment Segment - Electronic payment revenue surged by 57.6% to $790 million in Q1 2025, outperforming the consensus estimate of 51.3% [3]. - Adjusted EBITDA for this segment was $240 million, reflecting a year-on-year increase of 62.4%, with an EBITDA margin of 30.7% [3]. - The company rebranded its payment service from SeaMoney to Monee to highlight its synergy with e-commerce, with a loan balance of approximately $5.8 billion at the end of Q1 2025 [3]. Gaming Segment - Gaming revenue grew by 8.2% to $500 million in Q1 2025, below the consensus estimate of 15.0% due to significant deferred revenue [4]. - Adjusted EBITDA for the gaming segment was $460 million, with an EBITDA margin of 92.5% [4]. - The net bookings reached $780 million, up 51.4% year-on-year, with management confident in achieving double-digit growth in active users and bookings for 2025 [4]. Profit Forecast and Valuation - The company has revised its adjusted EBITDA forecasts for 2025, 2026, and 2027 upwards by 15.7%, 14.7%, and 13.2% respectively, reflecting better-than-expected profit release from various business lines [5][27]. - The target price is set at $168.00 based on a sum-of-the-parts valuation, with the gaming segment valued at $38.8 per share, e-commerce at $104.0 per share, and electronic payments at $25.2 per share [30][31].