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Grab: A sleeping giant?
I have to admit that $Grab Holdings (GRAB.US)$ is the baddest superapp in Southeast Asia, with seemingly impenetrable moats.
Last quarter, the company reported better-than-expected earnings per share (EPS) and positive EBITDA values for the first time. One quarter later, GRAB released its Q1 earnings again, where its EPS missed by $0.02 to 3 cents per share. That could only be the only bad news in this earnings report, because the adjusted EBITDA improved by $129mil year on year to an all time high of $62mil!
Accordingly, Grab gave a revenue guidance of between $2.7B and $2.75B for FY24. That’s a steep deceleration from 2023's 65% growth. In order to achieve that KPI, the company will execute several growth initiatives across its delivery and fintech verticals. Grab believes these opportunities will help to "diversify its future growth" while allowing it to capture market share.
Speaking of capturing market share, GRAB had been linked to talks to take over Foodpanda in several countries, but negotiations fell through because both parties couldn’t agree on deal terms. On 14th May, It was reported on Bloomberg that Foodpanda has agreed to sell its Taiwan business to Uber for $950mil.
The business model for a superapp is simple: acquire as many users as possible AT ALL COSTS! Once the superapp reaches a critical mass, the smaller players will fade away and the winner takes all. It looks like GRAB is approaching its critical mass and it will be interesting to follow up on its story to see how the company can eventually turn net-profit-positive. That’s when the stock price will really catch the attention of most investors to look at it seriously. Are you one of the early investors or still sitting on the fence to observe the development of the GRAB story?
Last quarter, the company reported better-than-expected earnings per share (EPS) and positive EBITDA values for the first time. One quarter later, GRAB released its Q1 earnings again, where its EPS missed by $0.02 to 3 cents per share. That could only be the only bad news in this earnings report, because the adjusted EBITDA improved by $129mil year on year to an all time high of $62mil!
Accordingly, Grab gave a revenue guidance of between $2.7B and $2.75B for FY24. That’s a steep deceleration from 2023's 65% growth. In order to achieve that KPI, the company will execute several growth initiatives across its delivery and fintech verticals. Grab believes these opportunities will help to "diversify its future growth" while allowing it to capture market share.
Speaking of capturing market share, GRAB had been linked to talks to take over Foodpanda in several countries, but negotiations fell through because both parties couldn’t agree on deal terms. On 14th May, It was reported on Bloomberg that Foodpanda has agreed to sell its Taiwan business to Uber for $950mil.
The business model for a superapp is simple: acquire as many users as possible AT ALL COSTS! Once the superapp reaches a critical mass, the smaller players will fade away and the winner takes all. It looks like GRAB is approaching its critical mass and it will be interesting to follow up on its story to see how the company can eventually turn net-profit-positive. That’s when the stock price will really catch the attention of most investors to look at it seriously. Are you one of the early investors or still sitting on the fence to observe the development of the GRAB story?
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Salmon Klein : what about you? are you in? why critical mass wasn't achieved yet? there are not real competitors at least in Singapore
會飛の魚 Salmon Klein : Who said no in Singapore, Gojek makes exaggerated offers SGD 8 every day
Salmon Klein 會飛の魚 : in taxis? or in what? I am not living there any longer so maybe thingd have changed a little
會飛の魚 Salmon Klein : yes,竞争还是蛮大的 mys and sg
Salmon Klein 會飛の魚 : what?
BelleWeather : I actually started a position based on a similar impression. I currently hold shares and LEAPS calls.