Piyush Choudhary

Piyush Choudhary asked about Shopee Logistics, specifically the percentage of orders fulfilled by SPX in Asia and Brazil, how this has changed over the last year, and the extent to which logistics investments are driving increases in the cost of services, along with the outlook for this cost item. Piyush also sought the Garena outlook for 2026 following a successful 2025, including any planned IP collaborations and new game launches.

Answer

Management, primarily Tony Hou (CFO), stated that over half of Shopee's orders are delivered through SPX, a percentage that has been increasing, leading to continuous improvement in cost per order and delivery speed. Forrest Li (Chairman and CEO) expressed optimism for Garena's 2026 outlook, anticipating continued user base growth and more immersive content, building on successful IP collaborations. He highlighted Garena's capability in working with global IPs and the potential of AI to boost creativity and user experience. While new games are in the pipeline, Forrest noted it's premature to project their significant impact on user numbers or revenue at this early stage.

Piyush Choudhary from HSBC asked about Shopee's logistics, specifically the percentage of orders fulfilled by SPX in Asia and Brazil, and how this has changed over the past year. He also inquired about the increase in cost of services driven by logistics investments and the outlook for this cost item. His second question focused on Garena's outlook for Free Fire in 2026 following its successful 2025, including any planned IP collaborations and new game launches.

Answer

Forrest Li, Chairman and CEO, stated that over half of Shopee's orders are delivered through SPX, with the percentage increasing over the last year. He highlighted continuous improvement in cost per order and increased delivery speed, which contribute to growth. Chris Wang, President, expressed excitement about Garena's momentum, noting strong and accelerated growth continuing into 2025. He is optimistic for 2026, expecting continued user base growth and more immersive content, leveraging Garena's capability in global IP collaborations. Wang also mentioned the potential of AI for boosting creativity and user experience. While detailed 2026 plans are in progress, new games are in the pipeline, though not expected to significantly impact financials at an early stage.

Piyush Choudhary asked about the Shopee VIP membership program's potential user base and cost implications, as well as the strategy and costs for the new instant delivery service. He also inquired about the Shopee EBITDA margin outlook for the second half of the year.

Answer

Group CFO Tony Hou explained that the VIP program is in its early stages but is not expected to have a fundamental long-term impact on costs. He noted that instant delivery targets higher-end users and should not negatively affect EBITDA. While acknowledging quarterly fluctuations, Hou stated that the long-term trend of EBITDA margin improvement is expected to continue.

Piyush Choudhary asked about Sea's strategy for incremental capital allocation, particularly whether the Money segment would be funded by its own capital or diversified sources. He also questioned the outlook for the gaming business, asking if the strong Q1 booking growth could be maintained.

Answer

Executive Forrest Li stated that while all businesses are now self-sufficient, the company prefers to diversify its funding sources for the Money segment through partnerships with financial institutions and exploring structured products, rather than relying solely on its own cash. Regarding Garena, he acknowledged the very strong Q1 performance, boosted by the successful Naruto collaboration, but advised to expect some quarterly volatility. He expressed confidence in achieving the full-year double-digit growth guidance for the gaming segment.

Piyush Choudhary asked for the outlook on consumer incentive spending in the Delivery segment and whether the pace of margin expansion might slow. He also requested details on the contribution mix between premium and affordable rides in the Mobility segment.

Answer

COO Alex Hungate projected sequential margin improvement for the Deliveries segment for the rest of the year, supported by growing advertising penetration, and reiterated the 4%+ steady-state margin target. For Mobility, he revealed that 'Saver' rides constitute about one-third of transactions, while premium rides have grown to a double-digit percentage. He confirmed this balanced approach supports the commitment to a 9% steady-state Mobility margin.

Piyush Choudhary asked if Grab has a medium-term target for its Daily Transacting User (DTU) to Monthly Transacting User (MTU) ratio, which currently stands at 16%. He also requested details on monthly order frequency trends in the Mobility and Delivery segments over the past year.

Answer

President and COO Alex Hungate confirmed that management is focused on increasing the DTU to MTU ratio but has not disclosed specific external targets, noting significant headroom for growth in both user penetration and frequency. He reported that order frequency improved year-over-year in both segments; Deliveries hit a new quarterly record despite seasonal headwinds, and Mobility frequency grew 5% year-over-year.