ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s announcement this week that it would cut 11% of its workforce was a move to rationalise costs to give the platform a sure footing for longer-term growth. </li>
<li>Near-Term profit targets would be achieved without these recent cuts which are focused on addressing geographical cost imbalances and taking into account potential automation through the impact of Generative AI.</li>
<li>The outlook for growth this year looks promising, with the potential for a strong 2H recovery despite employee-related costs but cuts will establish a more competitive cost base long term. </li>
</ul>



Grab's announcement this week that it would cut 11% of its workforce was a move to rationalise costs to give the platform a sure footing for longer-term growth. 
Near-Term profit targets would be achieved without these recent cuts which are focused on addressing geographical cost imbalances and taking into account potential automation through the impact of Generative AI.
The outlook for growth this year looks promising, with the potential for a strong 2H recovery despite employee-related costs but cuts will establish a more competitive cost base long term. 


Grab Holdings (GRAB IJ) - Rationalising With Growth in Mind

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>On 28th Mar 2023, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.</li>
<li>Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.</li>
<li>In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.</li>
</ul>


On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.


Alibaba Potential IPOs - Part 5 - An Early Look at Local Operations

<ul>
<li>
<a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s1Q2023 made for positive reading with rapid revenue growth and a quickening of progress towards profitability but the focus perplexingly seemed to be drawn to the ethereal measure of GMV. </li>
<li>The delivery segment saw the most significant GMV slowdown, impacted by a high base and seasonality but saw rapid revenue growth and record margins. Mobility remained the cash cow.</li>
<li>
<a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s profitability improved considerably in 1Q2023 across all segments, with management upgrading the outlook for FY2023 for adjusted EBITDA and maintaining its breakeven target for 4Q2023, which now looks conservative.</li>
</ul>



Grab's1Q2023 made for positive reading with rapid revenue growth and a quickening of progress towards profitability but the focus perplexingly seemed to be drawn to the ethereal measure of GMV. 
The delivery segment saw the most significant GMV slowdown, impacted by a high base and seasonality but saw rapid revenue growth and record margins. Mobility remained the cash cow.

Grab's profitability improved considerably in 1Q2023 across all segments, with management upgrading the outlook for FY2023 for adjusted EBITDA and maintaining its breakeven target for 4Q2023, which now looks conservative.


Grab (GRAB US) - Living in an Ethereal World

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>Softbank Vision Funds 1 and 2 were the biggest combined holdings at December 2022, accounting for 30% of group equity value; SVF private companies accounted for 73% of equity value</li>
<li>To December-end 2022, public companies in SVF2 were marked down by 52% versus investment cost, whereas SVF2 private companies were marked down by a more modest 33% versus investment cost</li>
<li>We believe that SVF2 private company valuations are at risk of further markdowns in 4QFY22 results, with many of these investments made close to the period of peak pandemic valuations</li>
</ul>


Softbank Vision Funds 1 and 2 were the biggest combined holdings at December 2022, accounting for 30% of group equity value; SVF private companies accounted for 73% of equity value
To December-end 2022, public companies in SVF2 were marked down by 52% versus investment cost, whereas SVF2 private companies were marked down by a more modest 33% versus investment cost
We believe that SVF2 private company valuations are at risk of further markdowns in 4QFY22 results, with many of these investments made close to the period of peak pandemic valuations


Softbank (9984 JP) – Focus on the SVFs, Are the Private Companies Appropriately Marked?

GoTo Gojek Tokopedia Tbk PT / Equity Bottom-Up

<ul>
<li>Headlines for <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> 4Q2022 and FY2022 headlines do not tell the whole story, given large one-off charges for goodwill write-downs, without which significant progress has been made towards profitability. </li>
<li>
<a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> significantly reduced incentive&amp;product marketing spending in 4Q but also posted decent growth, albeit at a slower pace, with an increasing emphasis on building foundational products to drive future profitability.</li>
<li>1H2023 will see slower headline growth from a COVID base but 1Q2023 should see improving take rates and CM breakeven. This is the transient stage of the long-term <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> story.</li>
</ul>


Headlines for GoTo 4Q2022 and FY2022 headlines do not tell the whole story, given large one-off charges for goodwill write-downs, without which significant progress has been made towards profitability. 

GoTo significantly reduced incentive&amp;product marketing spending in 4Q but also posted decent growth, albeit at a slower pace, with an increasing emphasis on building foundational products to drive future profitability.
1H2023 will see slower headline growth from a COVID base but 1Q2023 should see improving take rates and CM breakeven. This is the transient stage of the long-term GoTo story.


United States

DoorDash, Inc. provides restaurant food delivery services. The Company develops technology to connect customers with merchants through an on-demand food delivery application. DoorDash serves customers in the United States.

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DoorDash (DASH US)

Grab Holdings (GRAB IJ) - Rationalising With Growth in Mind

Grab's announcement this week that it would cut 11% of its workforce was a move to rationalise costs to give the platform a sure footing for longer...

Angus Mackintosh

Alibaba Potential IPOs - Part 5 - An Early Look at Local Operations

On 28th Mar 2023, Alibaba (BABA US) announced that it would adopt a new organizational and governance structure. In those note we take an early...

Sumeet Singh

Grab (GRAB US) - Living in an Ethereal World

Grab's1Q2023 made for positive reading with rapid revenue growth and a quickening of progress towards profitability. Too much time dwelling on...

Angus Mackintosh

Softbank (9984 JP) – Focus on the SVFs, Are the Private Companies Appropriately Marked?

The NAV could be 10%-15% lower than stated now at the mid-May results release, due to a further squeeze in private company valuations; this would...

Victor Galliano

GoTo (GOTO IJ) - A Transient State

GoTo 4Q2022 and FY2022 headline numbers do not tell the whole story, given large one-off charges for goodwill right downs, without which...

Angus Mackintosh

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