Sea: Transferring Coverage With a Narrow Moat Rating and Valuation of USD 159; Shares Undervalued

We transfer coverage of Sea with a fair value estimate of USD 159 per ADS, representing an EV/EBITDA of 56 times in 2025. Despite the seemingly high multiple, we think shares are undervalued for long-term investors primarily attributed to the long-term growth potential for Shopee and the digital finance services segment, or DFS. We expect operating profit to grow at a 48% CAGR in the coming decade,