ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

The Easter Week That Was in ASEAN@Smartkarma - ShopeeFood, Indonesia's 1st US SPAC, and Indocement

Grab - Biting the Bullet with a SPAC Listing?

The Week That Was in ASEAN@Smartkarma - Grab's SPAC Plans, Indonesia Hospitals, and ThaiBev

Sea Ltd (SE US) - Metamorphosis in Motion

Gojek (1379371D IJ) - A Leg Up for Digital Finance?

Sea Ltd (SE US) - Extending the Runway for a Bigger Plane?

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p>Shopee, the e-commerce arm of <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> has quietly launched ShopeeFood in Indonesia. This could potentially pose a threat to both <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> and <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a>, which currently dominate the food delivery market between them. </p>
<p>The two incumbent players do have a head start and an edge on logistics. ShopeePay's success in digital payments shows the company's ability to grab share quickly, suggesting that the firm’s new food delivery unit could be a force to be reckoned with.</p>
<p>There will also be synergies with ShopeePay, which could potentially provide discounts and cashback but overall it will help to increase the stickiness of the Shopee App.</p>
<p>The total gross merchandise value of the food delivery market in Indonesia reportedly amounted to US$3.7bn in 2020. If we were to assume that the market can grow by +15% in 2021 to US$4.2bn and Shopee could take 25% of the market then it could be worth US$1bn in GMV to Shopee.</p>
<p>Shopee certainly has the financial capacity to hire drivers, with the ShopeeFood Driver app, which is available on the google store already has over 100,000 downloads. Onboarding big and small will be key</p>
<p>Shopee’s biggest advantage over competitors remains its strength in terms of funding, given that it generates huge amounts of cash through its gaming business. <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> could now decide to channel resources into Shopee Food to grow that business rapidly.</p>
<p>It is early days for Shopee Food but it has the potential to be another revenue driver for the company, which will underpin future growth and hence its premium valuations. <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> trades on 13.3x FY21E EV/Sales and 9.5x FY22E EV/sales, with estimated sales growth of +78.8% and +38.4% for FY21E and FY22E respectively. </p>
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Shopee, the e-commerce arm of Sea Ltd (SE US) has quietly launched ShopeeFood in Indonesia. This could potentially pose a threat to both Gojek (1379371D IJ) and Grab (0967655D SP), which currently dominate the food delivery market between them. 
The two incumbent players do have a head start and an edge on logistics. ShopeePay's success in digital payments shows the company's ability to grab share quickly, suggesting that the firm’s new food delivery unit could be a force to be reckoned with.
There will also be synergies with ShopeePay, which could potentially provide discounts and cashback but overall it will help to increase the stickiness of the Shopee App.
The total gross merchandise value of the food delivery market in Indonesia reportedly amounted to US$3.7bn in 2020. If we were to assume that the market can grow by +15% in 2021 to US$4.2bn and Shopee could take 25% of the market then it could be worth US$1bn in GMV to Shopee.
Shopee certainly has the financial capacity to hire drivers, with the ShopeeFood Driver app, which is available on the google store already has over 100,000 downloads. Onboarding big and small will be key
Shopee’s biggest advantage over competitors remains its strength in terms of funding, given that it generates huge amounts of cash through its gaming business. Sea Ltd (SE US) could now decide to channel resources into Shopee Food to grow that business rapidly.
It is early days for Shopee Food but it has the potential to be another revenue driver for the company, which will underpin future growth and hence its premium valuations. Sea Ltd (SE US) trades on 13.3x FY21E EV/Sales and 9.5x FY22E EV/sales, with estimated sales growth of +78.8% and +38.4% for FY21E and FY22E respectively. 







Sea Ltd (SE US) - The Stickiness of Shopee Food