Raised Sea's Fair Value Estimate by 29% Following Strong Results, Shares Undervalued

We expect Shopee to be Sea’s main valuation driver for the long term. E-commerce as a percentage of retail sales was only 10% in Southeast Asia in 2023 as per eMarketer, leaving ample room for incumbents and new entrants to expand. We assume Shopee’s gross merchandise volume, or GMV, to grow at 10% CAGR during 2023-28, versus eMarketer’s projection of 8% for Southeast Asia.