[SINGAPORE] A potential listing for Monee, the digital financial services arm of Sea, could be positive for the parent company, but “real” hurdles around the listing and its upside remain, said DBS Group Research.
The Singapore-headquartered tech conglomerate, which is listed on the Nasdaq in the US and offers Singapore Depository Receipts on the Singapore Exchange, is planning the Monee listing according to an internal memo on Tuesday (Oct 20) that was seen by Reuters.
Sea will also launch an artificial intelligence enterprise platform business, said the memo.
DBS on Tuesday maintained a US$105 target price and issued a “hold” call on Sea’s stock in the wake of the news.
Analyst Sachin Mittal estimated that Monee could be valued at between US$18 billion and US$22 billion, based on 12 to 15 times its projected 2027 adjusted earnings before interest, taxes, depreciation and amortisation of about US$1.5 billion.
Sea’s current share price implies a valuation of only US$6 billion for the fintech arm, which means a successful spinoff could potentially unlock an upside of US$18 per share for Sea, or 21 per cent.
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Despite strong top-line growth, with Monee’s second-quarter 2026 revenue rising 58.9 per cent year on year to US$1.4 billion and its loan book expanding by 62.5 per cent to US$11.1 billion, the division is facing mounting credit loss provisions, noted DBS.
Provisions jumped 75 per cent on year to US$554 million in Q2 2026 – an increase Sea management attributed to off-Shopee SPayLater lending and exposure to riskier markets such as Brazil, which accounted for roughly 15 to 16 per cent of its total loans.
A listing before 2027 is unlikely due to regulatory hurdles in the eight markets where Monee operates, said DBS. In Singapore, any investor acquiring more than a 5 per cent stake in MariBank, a subsidiary of Monee, requires approval under the Banking Act.
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Meanwhile, new regulations from Indonesia’s Financial Services Authority (OJK) will cap debt-to-income ratios for buy-now-pay-later services at 40 per cent from 2027, and MariBank Philippines secured its digital banking licence only in July.
Additionally, a standalone Monee would be required to trade at arm’s length with Shopee, said DBS, complicating a relationship where the fintech arm currently benefits heavily from the e-commerce platform’s user base and advance customer payments.
Sea shares fell 9.1 per cent to close US$8.04 lower at US$80.43 on Tuesday.