Daily Brief Consumer: GoTo Gojek Tokopedia Tbk PT, Coupang , O Ta Precision Industry Co and more

In today’s briefing:

GoTo Gojek Tokopedia (GOTO IJ) – Plumbing for a More Certain Future
[Coupang Inc. (CPNG US, SELL, TP US$14.1) TP Change]: Farfetch May Glitter, but It Isn’t Gold
Asian Dividend Gems: O-Ta Precision Industry

GoTo Gojek Tokopedia (GOTO IJ) – Plumbing for a More Certain Future

GoTo senior management hosted an analyst call last week to provide further details on both the reasons behind the Tokopedia sale and the potential synergies and benefits of the move.
After the deal completes, GoTo will cede all management control but will receive a revenue stream from core GTV, which excludes digital products and certain big-ticket items.
Plumbing for this deal effectively de-risks its exposure to e-commerce given it is not required to inject any new capital but it does take away future optionality on Tokpedia’s growth.

CPNG will provide Farfetch with a bridge loan to save it from default. In exchange, CPNG acquires Farfetch business and its US$ 460mn+ net debt.
For Farfetch to achieve profitability, CPNG will need to conduct major layoffs and cancel brand deals, but both are difficult to achieve, in our view.
CPNG only found limited overseas success in Taiwan, and EU poses an even greater challenge. We cut TP to US$ 14.1 on increased debt and FCF burden.

O Ta Precision Industry is a company based in Taiwan that mainly makes golf clubs for global golf equipment branded companies including Titleist, PXG, Mizuno, and Honma.
O-Ta Precision’s dividend yield averaged 9.2% annually from 2019 to 2022. Its annual dividend payout averaged 68.5% in the same period.
We like the company’s strong niche in the golf club OEM/ODM business with excellent list of customers with its its historically high dividend payout ratio and dividend yields.

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