Maybank Securities  has reiterated his “buy” rating on US:SE:Sea Limited, while raising his target price from US$186 to US$192, citing Shopee’s strong competitive positioning in Brazil despite aggressive moves from rival Mercado Libre (US:MELI).

Saifee highlights that Shopee Brazil has been gaining rapid traction in the low-to-mid price segment — the very market segment Mercado Libre (MELI) is now targeting. MELI recently launched a major pricing offensive, slashing its minimum order fee in Brazil from BRL79 to BRL19 and reducing seller shipping fees by up to 40%, with MELI absorbing the cost.

While MELI has been growing fast, Saifee believes Shopee is still outpacing it in growth and logistics expansion. “Shopee’s value proposition remains compelling — products are 11% cheaper on average with faster delivery times,” he wrote in a June 17 note.

Shopee is also climbing upmarket, onboarding over 800 major brands and raising average order values. With a 1QFY2025 gross merchandise value (GMV) of US$15 billion, Saifee believes Shopee has overtaken local competitor Magazine Luiza in Brazil.

Shopee now operates 11 distribution centers and a logistics hub in Goiás, alongside its fully managed fulfillment center in São Paulo. Despite intensifying competition, sellers still enjoy lower take-rates on low-ticket items, especially when shipping subsidies are included.

Saifee values Shopee Brazil at US$10 billion, contributing 9% to Sea’s sum-of-the-parts (SOTP) valuation. However, he warns that if MELI’s aggressive strategy significantly erodes Shopee’s market share, the valuation could fall sharply.

In that scenario, Saifee applies a 0.5x EV/sales multiple — the same used during Shopee’s 2023 trough — which would slash Shopee Brazil’s value by 87% to US$1.3 billion and reduce Sea’s SOTP by 8% to US$176.

Upside risks include stronger user and revenue growth, while downside risks are tied to macroeconomic weakness, slowing user metrics, rising credit costs in SeaMoney, and increasing competition across Southeast Asia’s e-commerce landscape.

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