Sea's Monee Loan Book Hits US$12.6 Billion, Eyes Listing

Sea Ltd’s digital financial services arm Monee grew its consumer and small-business loan book by 60% year on year to US$12.6 billion at the end of September, the Singapore-based group reported with its third-quarter results on Tuesday (Nov 10).

The loan book comprised US$11.2 billion on-book and US$1.3 billion off-book, according to the results. Monee’s revenue rose 63.9% to US$1.6 billion in the quarter, while its adjusted EBITDA rose 15.5% to US$298.3 million from US$258.3 million a year earlier, research site Quantisnow reported.

Credit users and asset quality

Monee served nearly 44 million active credit users, up around 28% from a year earlier, and added nearly 6 million first-time borrowers, according to an earnings call summary published by GuruFocus. Off-Shopee SPayLater represented nearly a quarter of the portfolio, a Motley Fool transcript of the call showed.

The 90-day non-performing loan ratio rose to 1.3% from 1.1% a year earlier. Management said this reflected an evolving credit environment, especially in Thailand and Brazil, and a shift in market and product mix, GuruFocus reported.

Group provisions for credit losses jumped 82.3% to US$681.5 million as Monee’s loan book expanded, financial site 24/7 Wall St reported, while Monee’s sales and marketing expenses rose 111.8%, according to Chartmill.

Standalone listing plan

Chief executive Forrest Li said Monee had reached the scale and maturity to stand on its own, and that a standalone listing would give it a dedicated capital base to build a full financial ecosystem, according to the call summary. Management said Monee would pursue a listing in one to three years while keeping close ties with Shopee, the SingJuPost transcript showed.

For the whole group, Sea’s revenue rose 43% to US$8.6 billion and net income reached US$502.5 million, according to the results. The board approved a fresh US$1 billion share repurchase authorisation on Nov 9, 24/7 Wall St reported.

What’s next

Quantisnow said Monee’s margin will be watched as the loan book keeps growing, with Shopee’s 11.11 shopping event on Nov 11 marking the start of the fourth quarter. Monee has been profitable for three fiscal years, according to GuruFocus.

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