Grab

[winston]

3Q24 beat; raising TP and U/G to BUY

Upgrade to BUY; Raising TP to USD5.40 (from USD4.0)

Following a relatively muted 2Q24, Grab made a solid come back in 3Q24 with an across-the-board improvement, beating ours/Street est by 1-36% across its key metrics.

Grab’s scale, supportive growth factors (healthy spending across digital platform & tourism growth) as well as support from new/nascent verticals (lending, Grab Mart, restaurant reservation) should help to sustain the momentum in 4Q & 2025.

Competition as well remains under check allowing for incentive optimization.

We raise our 2024-26 adj EBITDA estimates by 23-27% (MIBG 2025-26 NPAT estimates 29-62% ahead of street).

Raise SoTP-based TP to USD5.40 after factoring in the new estimates and applying a higher target multiple (in line with global peers).

Source: UOBKH

https://mkefactsettd.maybank-ke.com/PDFS/418165.pdf

[winston]

not vested

Trading at a significant premium to Uber

Stock has risen 55% YTD; downgrade to HOLD with an unchanged TP of USD5.16

Excluding fintech, GRAB is trading at a ~21x FY25F EV/adj. EBITDA, a c.20% premium to UBER; based on consensus FY25F adj EBITDA (10% below ours) the premium is c.30% GRAB’s adj.

EBITDA gets a bigger boost from stock-based compensation (SBC), which should not warrant a large valuation premium to UBER.

Upside potential of ~15% even under bull-case scenario (unlikely at this stage) Grab’s ad. EBITDA benefits more than UBER from share-based compensation

GRAB’s 9M24 adj. Group EBITDA of USD216mn received a significant USD229mn boost from SBC. We highlight that share base compensation (SBC) exceeded 100% of GRAB’s adj. group EBITDA in 9M24 (vs. less than 30% for Uber).

As SBC is non-cash in nature, it is added back to the operating EBITDA to arrive at adj. EBITDA. However, SBC also leads to a rise in the number of new shares diluting the existing shareholders.

GRAB mitigates the impact with its USD500mn buyback plan for FY24F, of which USD190mn worth of buyback has been done over 9M24.

This would also lead to a reduction in the cash balance without corresponding decrease in the number of outstanding shares.

SBC is practiced extensively by many companies globally. However, we believe SBC’s impact on the number of shares also needs to be considered.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=22624

[behappyalways]

Surrendering to Uber, the CEO of Southeast Asia’s leading ride-hailing company reveals the secret to success

讓Uber拱手相讓 東南亞叫車龍頭執行長揭成功秘訣｜FOCUS午間新聞 20241219‪@tvbsfocus

https://m.youtube.com/watch?v=i-0u9fNmJa8

[winston]

not vested

Grab partners BYD to expand electric vehicle fleet offering across South-east Asia

by Chong Xin Wei

To provide up to 50,000 BYD electric vehicles (EVs) to its driver-partners across South-east Asia.

Grab’s fleet partners and driver-partners, will gain access to BYD vehicles at “the most competitive rates”, with extended warranties on the EVs’ batteries.

Drivers will also have the option to rent the EVs from Grab’s fleet partners or opt for financing support through the company’s car ownership schemes.

Source: Business Times

https://www.businesstimes.com.sg/compan ... -east-asia

[winston]

not vested

<News Alert!> GRAB Holdings (GRAB US) & GoTo Gojek Tokopedia (GOTO IJ): Grab Mulls GoTo Takeover at a 20% Premium—Will It Finally Happen?

Grab Holdings Ltd. (GRAB US) is speculated to be acquiring GoTo Group (GOTO IJ), at over USD7bn (Bloomberg).

The article suggests acquisition price of GoTo shares at over Rp100, implying a 20% premium over its last traded price, no official confirmation though.

In our view, any potential merger might benefit both companies by improving profitability and getting the scale to launch RoboTaxis in the next 1-2 years.

Rating and TP under review for GOTO, previously we have a BUY rating with TP of IDR89, while we maintain HOLD rating on GRAB with USD5.16 awaiting further clarity.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=23462

[winston]

not vested

Grab shares dive as outlook miss highlights internet downturn

By Olivia Poh

Expects a 19% to 22% rise in sales to US$3.33 billion (RM14.77 billion) to US$3.40 billion this year, just shy of the US$3.5 billion average of analyst projections

Smaller-than-expected 23% decline in quarterly net income.

Source: Bloomberg

https://theedgemalaysia.com/node/745140

[winston]

4Q24 in line; moderate FY25 guidance

4Q24: Firm but within expectations

Grab’s on-demand GMV increased 20% YoY and 8% QoQ to USD5.0b, 3-4% above the Street and our forecast.

Revenue rose 17% YoY and 7% QoQ, 1% above consensus.

Adjusted EBITDA surged 177% YoY to USD97m, generally in line with Street expectations and supported by a 1.1ppt YoY margin improvement on GMV.

Incentives increased 29% YoY (11% QoQ), with consumer incentives up 37%, helping to drive volumes in both ride-hailing and deliveries.

TP: US$6.24

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/437678.pdf