ASEAN Internet_ Investor Presentation_ March 2025

Summary of ASEAN Internet Investor Presentation - March 2025 Industry Overview - The ASEAN Internet sector is expected to continue its profitable growth momentum into 2025, projecting over 20% revenue growth and improvements in margins and cash flows [1][6][7]. - The industry is anticipated to sustain growth momentum with GMV growth in the mid-teens and revenue growth exceeding 20% year-over-year [6][7]. Key Companies - Sea Ltd (SE): Rated as Overweight (OW) with a price target of $167, current price at$126, indicating a 32% upside potential [8]. - Grab Holdings (GRAB): Also rated as Overweight with a price target of $5.70, current price at$4.64, suggesting a 23% upside [8]. - GoTo Gojek Tokopedia (GOTO): Rated Equal-Weight with a price target of IDR 91, current price at IDR 79, indicating a 15% upside [8]. Core Insights - 2024 was a pivotal year for ASEAN Internet companies, balancing growth and profitability effectively [6]. - Companies are expected to focus on top-line growth through strategic reinvestments to maintain or enhance market share [6][7]. - Competition remains intense, particularly in e-commerce and food delivery sectors, but there is a noted rationality in strategies among players [7]. Financial Performance - Positive adjusted EBITDA has been achieved, with expectations for continued margin upticks in 2025 [6][13]. - Grab's e-Grocery segment, GrabMart, is growing significantly faster than its food delivery service, indicating a shift in consumer preferences [17]. Market Dynamics - Recent discussions about a potential merger between Grab and GoTo could address poor unit economics in the on-demand services market [14]. - Regulatory challenges may arise, particularly in Singapore, but consolidation could lead to reduced marketing expenses and improved profitability [14]. Macro Factors - Slower GDP growth is expected in key ASEAN markets in 2025 compared to 2024, with concerns about stock market performance in Indonesia [7][14]. - The appreciation of the USD poses a headwind for SE and Grab in terms of reported financials [7]. Growth Drivers - The quick commerce market in ASEAN is projected to grow at a CAGR of over 20% from 2024 to 2030, with Grab's hybrid model showing strong performance [17]. - Advertising revenue as a percentage of GMV is increasing for both SE and Grab, indicating new revenue streams [17]. Indonesia Market Insights - Indonesia represents a significant portion of revenue for both SE and Grab, with SE's GMV from Indonesia around 33% and Grab's at 23% [23]. - Despite challenges, Grab's on-demand GMV in Indonesia grew 10% quarter-over-quarter in Q4 2024, reflecting a healthy marketplace [23]. Conclusion - The ASEAN Internet sector is poised for robust growth, driven by strategic reinvestments, new revenue streams, and potential consolidation among key players. However, macroeconomic factors and competitive dynamics will require careful navigation by companies in the region [6][7][14][17].