In today’s briefing:
- Grab Holdings (GRAB US) – Growth with Scale from a Stable Platform
- Grab: Profitability Seems Not So Easy to Sustain
Grab Holdings (GRAB US) – Growth with Scale from a Stable Platform
- Grab Holdings (GRAB US) released another set of positive results but this time the balance between profitability and growth was well-struck, as it reduced incentives yet increased its market share.
- Grab saw GMV growth in both deliveries more notably in mobility, with revenues growing at a faster pace and adjusted EBITDA surprising on the upside, bringing forward breakeven to 3Q2023.
- Prospects for 2H2023 look even better with Grab’s affordability initiatives gaining traction and improving retention and profitability.
Grab: Profitability Seems Not So Easy to Sustain
- Grab’s share price moved up by about 10% following its 2Q2023 earnings announcement as the market got excited over the company’s prospect of reaching profits in the next few quarters.
- Mobility GMV is nearing pre-Covid levels, however, there has been a sharp increase in incentive spending during 2Q2023 suggesting incentives is a key driver of GMV growth.
- Our analysis on deliveries biz suggests that segment’s margins have very little room for improvement and further reducing incentives could stall growth going forward.
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