$Grab Holdings(GRAB)$ 

My thoughts on Grab’s 1Q23 Earnings

As a shareholder of Grab, I do think that the fundamentals of the company are indeed improving. We see revenue growth, contraction in losses and overall improvement of EBITDA. What else would you want to see in an earnings report?

Furthermore, I have an inclination that companies have pivoted from the concept of “Growth at any cost” to “Growth at what cost?“. To this end, I am encouraged to see revenue has not fallen proportionately to partner & consumer incentives.

My initial fear was that consumers were only sticking to Grab due to their incentives, hence if they reduce incentives by 10%, sales would fall proportionately as users would seek out other competitors.

Good news, this has not happened as even though partner & consumer incentives fell (By 22% and 36% respectively). We still see revenue continuing to rise which is an indication of:

Increased stickiness amongst their users. Meaning to say that there are now more users who continue to use Grab even without incentives. This could be influenced by many factors such as habit (caused by the massive incentives in the past), membership (Grab Unlimited etc.), wait time (Grab has a larger fleet hence the timeliness of on-demand services is better than competitors), etc.

Competition is Failing. I speculate that competitors are not doing enough to compete with Grab in terms of both advertising as well as fleet growth. In terms of advertising, we don’t see other ride-hailing platforms continue to give out free promocodes unlike what Grab did in the past to penetrate the market. (Goes back to my point about Growth at what cost). On this note, I reiterate my point of view that it is a matter of time that Grab achieves somewhat of an unspoken monopoly in Singapore.