To The Moon

Grab Holdings Ltd, Q4 2021, Earnings Conference Call/Transcripts Takeaways: (NASDAQ: ‌GRAB‌‌)

Should you buy, hold or sell?‌

Here are my takeways:

1/ Financial Losses

Softbank and Uber getting out of Grab.. (Milking what's left after the SPAC closure).

Just Q4 alone, the loss was $1.1bn, inclusive of paying off investors with convertible shares.

2/ Deliveries

To maintain leading status in online groceries delivery in SEA and accelerate growth in their business.

Speculative growth, will this investment becomes profitable, esp, acquiring majority of 75% of Jaya Grocer. (Spends $350mil to $430mil for the acquisition)

Not to mention, you have Shopee (SE) and Lazada (BABA) in SEA competing for the online groceries delivery market share.

3/ Mobility

Weak moat, with more ride-hailing apps entering at a cutthroat rate. Hence, Grab has to spend more to keep regaining market share in their core moat for mobility.

This section alone, makes me wonder how Grab will progress in the next 5 years (Not remotely confident).

4/ Digibank

Once again, acquiring new business (financial bank) to compete against their competitors (GoTo) for their super-apps services.

Investing in new segment = more money being spent. Just to be clear, GRAB is not profitable as whole in the company!

What could happen in the near future for Grab?‌ Speculating:‌

5/ Dilutions

1. Expect more dilution, why?

As the Grab needs cash to fund their future acquisition and new operating business (Jaya, DigiBank and etc).

6/ Adding more moat/improving their current moat

1. As new obstacles starts to challenge their moat, Grab will have to incentivise or acquire new businesses to establish themselves as a leading brand in market share.resulting to high operating expenses.

2. Will they be profitable in the long run? (Only time will tell)

7/ Risk of more competitors entering SEA.

1. Lazada and Shopee (Offline to Online groceries delivery)

2. DIDI (Mobility)

3. GoPay (Financial)

And other disruptive competitors in future.

8/ Summary

1. Low/Mediocre Competitive Advantage

2. Excessive Spending, yet unprofitable

3. Lack of big investors investing in the business (Current Quarter).

4. More competitors in the future.

My opinion: Buy, Hold or Sell?

Hold, and why, I think the current business is spending way more than what they could earn. Hence, in my opinion, I think investors who are keen to pick up shares on Grab, should be patient. Wait for their business to become profitable by 2024-2025. (If you are YOLO investors, then by all means starting picking up those shares. Though you will lose out in opportunity costs, because you may find better businesses out there worth investing, which you could x2, x3 or even x5 your returns compared to GRAB).

As always, stay safe and may the markets be ever in your favour!

‌$Grab Holdings(GRAB)$‌‌$Sea Ltd(SE)$‌‌$Alibaba(BABA)$‌‌$DiDi Global Inc.(DIDI)$‌

Disclaimer:

I am not a financial adviser. This thread is for education and entertainment purposes only. Seek professional help before making any investment decision.