Grab Holdings (GRAB), mcap=$11bn, price $2.88 vs $2.35

– Mobility/food delivery super-app with #1 dominant position across SE Asia.
– SE Asia is structurally more attractive vs. developed markets, due to large, young, mobile-first, and underbanked populations with the absence of established legacy habits and fast-growing GDP/Income.
– Digitization services are still in the early innings.
– GRAB is best positioned to win across its businesses with its super-app.
– Steady-rate margins at maturity are expected to be higher than for peers in developed markets.

– The range of outcomes is wide but the downside is well protected by the current valuation.
– 60% of the market cap is in cash, but most of it will be burned over the next 5-3 years.
– Base Case scenario (5-10 years) assumes GMV CARG in high-teens, with EBITDA margins of 12.5% in mobility, 3% in delivery, and 3% in financial services.
– Results in mid/high-teens IRR.

Exp. gain: mid/high-teens IRR over 5-10 year period.

Full $GRAB write-up (free guest account required):

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