Eyes on Grab and Sea as analysts stay bullish ahead of FY2025 results

[SINGAPORE] Equity analysts are bullish on Sea and Grab’s upcoming fourth-quarter FY2025 performance, even as their share prices have pulled back in the year to date.

Grab’s share price fell 15.9 per cent or US$0.81 to US$4.27 between Jan 1 and Feb 6. Sea’s share price dropped 17.5 per cent or US$22.95 to US$108.54 over the same period.

Grab is expected to report its results after the US markets close on Wednesday (Feb 11); Sea has yet to announce its reporting date.

Based on a Bloomberg poll, 40 analysts have “buy” calls on Sea, and three have “hold” calls; 28 analysts have “buy” calls on Grab and only one has a “hold” call.

Analysts expect Grab to report higher Q4 earnings before interest, taxes, depreciation and amortisation (Ebitda) and net profit for 2025.

Gross merchandise value (GMV) growth is expected on the back of the festive and holiday season in the last quarter of 2025, as well as new product launches to expand the addressable market for its mobility and delivery segments.

Jacquelyn Yow, analyst at CGSI, said: “Having said that, we believe the Ebitda to GMV margin for both deliveries and mobility segments declined slightly for the Q4 2025 forecast, given higher consumer incentives to capture year-end demand.”

Mobility and delivery demand

Ahead of Grab’s earnings, analysts are focused on mobility and delivery demand, seasonality into the first quarter, advertising growth, margins and subsidies as well as 2026 guidance and consumer sentiment commentary from Grab’s management.

Fundamentals for Grab remain intact, with a rising user base set to feed Ebitda growth, GMV and margins. Grab is expected to continue strengthening its leadership position by rolling out “innovative and affordable products”, said Piyush Choudhary, head of Asia telecoms at HSBC.

Sea has opportunities for its e-commerce arm Shopee, as competitive pressures ease in several key markets.

South Korean e-commerce player Coupang was hit by a data breach resulting in a leadership crisis as its CEO Park Dae-jun resigned in December. This could stall its efforts as a challenger in Taiwan, where Shopee is a dominant player.

Meanwhile in Indonesia, TikTok Shop is hiking seller fees between 1 and 2.5 per cent.

In Brazil, Shopee’s competitor Mercado Libre is also raising logistics fees for items in the mid-price range – that is, between 49 Brazilian reals (S$12) and 79 Brazilian reals for packages under 3 kg. The free shipping threshold has been lowered to 19 Brazilian reals.

Stepping up platform monetisation

Against this backdrop, Shopee has stepped up platform monetisation with a round of seller fee hikes as competition softens. This includes the introduction of a 5 per cent technical support fee for Singapore, Malaysia, Thailand and Vietnam.

Shopee also raised commission fees for Singapore, Indonesia, Malaysia, Vietnam and Brazil from Jan 1.

“We estimate that 65 to 70 per cent of Shopee’s GMV is on the road to recovery with rising take rates in Indonesia, Malaysia, Singapore, Vietnam and Brazil,” said Sachin Mittal, analyst at DBS Group Research.

Shopee’s VIP programme is also expected to drive growth in 2026, offering discount vouchers and exclusive perks that differ from market to market. Shopee GMV is expected to be supported by investments into logistics, content and customer service.

“We believe such investments would drive user stickiness and lead to higher wallet share spend on Shopee,” said HSBC’s Choudhary.

Some analysts remain cautious on Sea’s 2026 outlook following management’s previous commentary on margin expansion, raising questions over whether margins will remain flat in 2026.

“Few investors worry about a scenario of mid-teens GMV growth and stable 2026 margins, which in our view is highly unlikely,” said Hussaini Saifee, equity research analyst at Maybank Research.

Garena – Sea’s gaming segment – is expected to post about 4 per cent growth in 2026 bookings led by its flagship game Free Fire. Slower growth is predicted due to a high base in 2025, with potential upsides from successful collaborations with other brands and franchises.

“We continue to believe investments in Shopee (logistics, content, customer service) will support robust GMV growth and strengthen its competitive moat, while its scale will help to build cost leadership,” said HSBC’s Choudhary.