GRAB / ALTIMETER $AGC
The positives are well known and enormous respect to Anthony and Hooi Ling for creating an ASEAN behemoth. Nevertheless, here's some of the less obvious, but key points to note on this $40b deal. (1/n)
1. Control: Anthony Tan will continue to control the company with 60.4% of the voting rights, despite owning just 1.1@ of ordinary shares. sec.report/Document/00011… pg 48
Disclosure (thus far): The company hasn't released all the financial details, instead it has put up a dressy deck with 2021-23 projections. So not that much to chew on. Still...
Mobility: GMV was nearly flat in 2020 but top-line grew by 60%. Attributed to increase in take rates. But, isn't it rather a cut in incentives. Expectations are flattish for take rate going forward.
Mobility (contd): growth is detailed for deliveries and financial services for 2018-20 but for Mobility its 2020-23. COVID? smartkarma.com/entities/grabt…
Delivery: 49% of adj net revenue, and by far the chonkiest. GMV forecasts need to be examined closely. This isn't a winner-take-all market (yet / or at all).
Financial segment: revenues down in 2020, despite hyper incentivisation. 30% of its GMV was intercompany GMV. So appears bulk of this segment is linked to people paying for rides and delivery.
Financial segment (contd). Grab expects payments net revenue to decline in FY22 (as mobility recovers), and then a big jump in net revenue in 2023.
Valuations: US$3.3bn of revenue in 2022, on pre-money EV that's 9.2xEV/Rev 2022. Deliveries is the largest chunk...and $DASH on 9.3xFY22 EV/Rev with 6.7% projected EBITDA margin. While GRAB will still be EBITDA -ve. smartkarma.com/entities/grabt…
Valuations (Contd): validity of vlauations being pegged to $SE which saw no decline from Covid; quite the opposite vs GRAB which saw 2 among 3 businesses suffer.
P.S. extensive independent coverage of this transaction on Smartkarma. You can follow it here: smartkarma.com/entities/grabt…
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