TLDR;
- 3 consecutive quarters of positive FCF – Added $500 million to cash balances in last Q.
- Became GAAP profitable last quarter.
- Expanding digital banking presence across Singapore, Malaysia, and Indonesia
- Cross-Selling Opportunities & Reduced Customer Acquisition Costs for new services.
GRAB Q4 FY24 Results:
- Revenue: $764M (+17% YoY)
- Net Income: $11M
- Net Margin: 1.4%
- Mobility Gross Bookings: Part of $5.028B On-Demand GMV (+20% YoY)
- Free Cash Flow: $61M (Adjusted Free Cash Flow)
- Free Cash Flow Margin: 8.0%
- Share Repurchases: $37.1M in Q4 (4.9% of revenue)
- Monthly Active Platform Consumers (MAPCs): 43.9 million, up 17% YoY
- Cash Position: $6.1B
How do they make money?
- Grab is a super-app in Southeast Asia. Think PayPal, Shopify, Uber and Doordash combined.
- Based on 3 main segments:
- Delivery (Food and Groceries): $407 million (53.3% of total revenue)
- Mobility (Ride-sharing): $282 million (36.9% of total revenue)
- Financial Services: $74 million (9.7% of total revenue)
- Generates revenue through commissions
- For food delivery (GrabFood) – 25-30%
- For ride-hailing (GrabCar/GrabBike) – 20-25%
- Acts as a middleman between supply and demand sides.
Mobility (Ride-Hailing)
- GMV Growth: +20% YoY
- Revenue Growth: +17% YoY
- Business Model: Commission-based revenue from connecting riders with drivers
- Market Position: Dominant player in Southeast Asia after Uber’s exit from the region in 2018
Deliveries
- GMV Growth: +12% YoY
- Revenue Growth: +13% YoY
- Business Model: Commission from food and grocery deliveries, plus advertising revenue from merchants
- Merchant Benefits: Self-serve advertising platform where merchants only pay when deliveries are completed
- Strategic Expansion: Recent acquisition of Nham24 in Cambodia to strengthen regional presence
Financial Services
- Revenue Growth: +34% YoY
- Loan Portfolio Growth: +64% YoY
- Deposit Growth: +50% QoQ, +300% YoY
- Total Deposits: Over $1.2 Billion
- Banking Presence: Operating through GXS Bank (Singapore), GXBank (Malaysia), and Superbank (Indonesia)
- User Adoption: GXBank recorded 892,000 deposit customers in Malaysia, GXS Bank over 100,000 deposit customers in Singapore, and Superbank reached 2 million users in Indonesia
Regional Market Opportunity
- SEA Population: Approximately 700 million people.
- Current User Base: 43 million monthly transacting users (only 6% penetration).
- Smartphone Penetration: Expected to reach 85% by 2030.
- Economic Growth: Average GDP growth of 5.1% across the top 6 countries in SEA region.
- Tourism Potential: Increasing tourism provides additional growth tailwinds.
Competitor Risk Analysis
GoTo Group (Gojek-Tokopedia)
- Controls approximately 55% of Indonesia’s ride-hailing market versus Grab’s 45%.
- Maintains strong local brand loyalty in Indonesia, Southeast Asia’s largest economy
Sea Limited (ShopeeFood)
- ShopeeFood holding 47% market share in Thailand versus GrabFood’s 48%.
- Expanding rapidly in financial services with SeaMoney’s loan book growing 70% YoY to $4.6B versus Grab’s 64% growth to $536M.
- Leverages cross-selling opportunities through its e-commerce platform with 15-19% projected GMV growth.
Local Competitors
- Market-specific players like Be and Xanh SM in Vietnam gaining traction after Gojek’s exit.
- Specialised fintech startups challenging Grab’s financial services expansion.
2030 Valuation (Updated on 5th April 2025)
Assumptions :
- LTM Revenue: $2.80B
- 5Y Revenue CAGR: 40%
- 2030 Profit Margin: 5%
- 2030 PE Ratio: 60
- Shares outstanding: 3.93B
- Shares reduction: 2%/year
Valuation :
- Q4 2030 GRAB SHARE PRICE = 2.80 * (1.40)^5 * 0.05 * 60.00 / [3.93 * (0.98)^5] =Β $12.71
- Using discount rate for GRAB as 9%.
- CURRENT SHARE PRICE: $3.73
- DISCOUNT RATE: 9%
- FAIR VALUE: $12.71 / (1.09)^5 =Β $8.26
- POTENTIAL UPSIDE: (($8.26 β $3.73) / $3.73) Γ 100% β 121.45%
- EXPECTED RETURNS: ((($12.71/ $3.73)^(1/5)) β 1) Γ 100% βΒ 27.78%/year
- DIVIDEND YIELD: NA
- MY RATING : BUY β |Β Accumulate only on red days while Trump is going crazy on tariffs.
