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…
💡 IDEAL $KBANK.TB - consensus Thai O/W, seen as a digital aspirant. However, Brian spots two flies in the ointment. Stock has doubled from 2020 lows, so this is worth noting.
(1/n)
1. foreign line highly likely deletion from MSCI at upcoming MAY SAR - Deletion of the foreign line would require passive funds to sell 87m shares...
2. There is also a possibility of a reduction in the Foreign Inclusion Factor (FIF) on the Non Voting Depository Receipt (NVDR) line if the foreign room stays below 15% on the price cutoff date. This would necessitate selling of around 22m shares.
BABA: opens +9% and continuing to trade VERY strong in HK today. Market realising pendulum swung too far, and starting to fade the risk premia here. (Chart: BABA vs TENCENT intraday)
Putting things into perspective: since November, Media frenzy and Investor panic wiped $260bn in value.
Meanwhile, 4Q was historic high Q-rev growth +37% Y/Y, historic high core commerce EBITDA, and historic high quarterly op profit. Clodu turned profitable, and Cainiao positive OCF also.
Thai IPO raising $750m: Ngern Tid Lor (NTL) jointly owned by CVC and Bank of Ayudhya (BAY TB) with 16pc market share.
Impressive track record: 2016-20, gross l25.1% CAGR, total income 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20.
Gets better: 2010-20, its total income has increased by 12.6x, branch network by 6x and receivables by 18x. That implies a CAGR of 28.9% for total income, 19.6% for branches and 33.5% for receivables.
We are seeing growing Enquiries from EM investors looking to switch at least part of their EM Asia exposure into an Asia ex-China benchmark.
iShares MSCI Asia ex China AUM has doubled in just a couple of months. In the grand scheme still small at $420m but is this a coincidence this coincides with recent Geopolitical tension?
The impact on EM Asia ex China country weights is absolutely enormous. TWN and KOR could go beyond 30pc while India post 20pc.