Hold your bullets
$Grab Holdings (GRAB.US)$
I was as excited as most Singaporeans on this app when our home-grown brand got listed. But when I deep-dive into the company, I will likely not invest in it, at least for the short term.
Grab’s market in the South East Asia definitely has growth potential i.e. people are getting affluent, there’s an increase in digital growth etc. However, do note that Grab faces intense competition and challenges in all its businesses/services (ride-hailing, food delivery and financial services). At the moment, I don’t see very strong Moat displayed by them yet - similar to $Uber Technologies (UBER.US)$
1. Ride hailing - doesn’t seem like they are going to expand to countries outside South East Asia region. And this spells limited growth, at least for the short term. Furthermore, this area of business is badly impacted by the pandemic. Taxi drivers are suffering (it’s a real problem on the ground)
2. Food delivery - sales in this area did “rocket” as everyone started working from home since 2020. But Singapore, and a few other SEA countries, are too small. There is a limit to how much they can earn in this segment. Throw in Foodpanda, Deliveroo etc, their market shares will be further capped. Personally, I don’t think there is brand loyalty when it comes to food deliveries. I used Grab most of the time, but I also used the other two when there are discounts/ vouchers etc.
3. Financial services - there are so many financial institutions around. It’s going to be tough competing against the banks, and even giants like Apple $Apple (AAPL.US)$ and Google $Alphabet-A (GOOGL.US)$ for their payments services. Once again, throw in Favpay, Singtel’s Dash $Singtel (Z74.SG)$ Alipay $Alibaba (BABA.US)$ etc etc. How much pie / market shares can they capture?
Overall, the company’s financial situation isn’t fantastic. Their revenue did grow YOY, but they are not profitable yet. Things may change in 3 to 5 years’ time (expansion by the company, covid has gone etc). But for the short term, I don’t think I would invest my money in them. The dollars can be better invested into other stocks with higher growth. Would suggest to enter only when the coast is clear. Meantime, I will just remain as their consumer using their services.
Not financial advice. DYDD and invest safely.
$Grab Holdings (GRAB.US)$
I was as excited as most Singaporeans on this app when our home-grown brand got listed. But when I deep-dive into the company, I will likely not invest in it, at least for the short term.
Grab’s market in the South East Asia definitely has growth potential i.e. people are getting affluent, there’s an increase in digital growth etc. However, do note that Grab faces intense competition and challenges in all its businesses/services (ride-hailing, food delivery and financial services). At the moment, I don’t see very strong Moat displayed by them yet - similar to $Uber Technologies (UBER.US)$
1. Ride hailing - doesn’t seem like they are going to expand to countries outside South East Asia region. And this spells limited growth, at least for the short term. Furthermore, this area of business is badly impacted by the pandemic. Taxi drivers are suffering (it’s a real problem on the ground)
2. Food delivery - sales in this area did “rocket” as everyone started working from home since 2020. But Singapore, and a few other SEA countries, are too small. There is a limit to how much they can earn in this segment. Throw in Foodpanda, Deliveroo etc, their market shares will be further capped. Personally, I don’t think there is brand loyalty when it comes to food deliveries. I used Grab most of the time, but I also used the other two when there are discounts/ vouchers etc.
3. Financial services - there are so many financial institutions around. It’s going to be tough competing against the banks, and even giants like Apple $Apple (AAPL.US)$ and Google $Alphabet-A (GOOGL.US)$ for their payments services. Once again, throw in Favpay, Singtel’s Dash $Singtel (Z74.SG)$ Alipay $Alibaba (BABA.US)$ etc etc. How much pie / market shares can they capture?
Overall, the company’s financial situation isn’t fantastic. Their revenue did grow YOY, but they are not profitable yet. Things may change in 3 to 5 years’ time (expansion by the company, covid has gone etc). But for the short term, I don’t think I would invest my money in them. The dollars can be better invested into other stocks with higher growth. Would suggest to enter only when the coast is clear. Meantime, I will just remain as their consumer using their services.
Not financial advice. DYDD and invest safely.
$Grab Holdings (GRAB.US)$
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