Sea Limited upgraded to Buy at Citi ahead of Q4 report

As previously reported, Citi analyst Alicia Yap upgraded Sea Limited to Buy from Neutral with a price target of $50, up from $44. The firm expects Sea to report Q4 result at the end of February or in early March and notes some uncertainty remains about whether TikTok could step up spending following the full integration with Toko app in the weeks ahead of the Hari Raya promotional campaign, which could prompt Shopee to react. The firm says it could see an inflection point in coming months if Shopee successfully maintains its leading position via “diligent spending” while delivering a gradually improving monetization rate with narrowing EBITDA loss. Together with steady gaming bookings on stable EBITDA margins and the Fintech business delivering an improving profitability trend, Sea’s fundamental outlook is “likely to turn more promising,” the analyst tells investors.