Maybank Investment Bank Berhad
April 15, 2025
Grab Holdings: A Comprehensive Analysis
Grab Holdings, a leading Southeast Asian superapp with core verticals in delivery, mobility, and financial services, has recently made a significant acquisition. This report provides an in-depth analysis of Grab’s strategic moves, financial performance, and future prospects.
Grab’s Strategic Acquisition: Validus Capital
Grab Holdings’ subsidiary, GXS Bank, has acquired Validus Capital Pte Ltd, a digital lending platform for SMEs in Southeast Asia. This acquisition enables GXS to serve larger SMEs, complementing its previous services limited to single-ownership businesses through GXS Business Account and GXS FlexiLoan Business. The estimated loan book of Validus Capital is USD100-150m, although the acquisition price has not been disclosed.
Shielded from Direct Impact of Tariff Wars
Grab has no direct exposure to US exports or business, making it insulated from the impacts of higher tariffs. However, a potential risk lies in a broader ASEAN GDP growth slowdown, which could indirectly affect Grab by curbing consumer spending. The company’s recent customer retention strategies, such as budget-friendly offerings and ride-hailing services like GrabHitch and GrabShare, may offset potential indirect impacts from weaker GDP growth in the region.
AI-Led Strategy
Grab’s AI-first mindset is evident in its suite of generative AI (GenAI) and machine learning (ML) initiatives. These include enhancing user experience, improving partner efficiency, and optimizing operations. For users, AI enables features like synchronized large food orders, cost-efficient solo meals, AI-based safety measures for teens, and dynamic airport pickups. For partners, the Merchant AI Assistant delivers real-time insights, automated marketing, and photo recommendations, while the AI Driver Companion provides predictive demand guidance and real-time road condition tracking.
Financial Metrics and Projections
Adjusted EBITDA Breakeven: Projected in FY24
Net Income Breakeven: Projected in FY25E
On-Demand GMV CAGR: 14% (2023-26E)
Adjusted Net Revenue CAGR: 16% (2023-26E)
Swing Factors
Upside:
Softer-than-expected competition from the entry of XanhSM in Vietnam and Indonesia
Better macroeconomy allowing for higher discretionary spending
Limited driver-supply pressure leading to continuous reduction in incentives
Better-than-expected ecosystem benefits within the financial services segment
Easing monetary policy by the US Fed
Downside:
Fierce-than-expected competition from the entry of XanhSM in Vietnam and Indonesia
Increase in incentives in response to tightening driver-supply
Drop in on-demand usage frequency due to price increases and higher inflation
Elevated stake divestment by Softbank Group leading to excess stock liquidity
ESG Assessment
Grab has established sustainability policies with various time-based targets set for the period. Its quantitative disclosures on ‘E’ parameters on emissions, resource usage, as well as ‘S’ parameters on workforce and management diversity are robust. Grab’s overall ESG score is 46, making its ESG rating above average.
Quantitative Parameters
Particulars Unit 2020 2021 2022 2023 FY23A FY24A FY25E FY26E FY27E
Revenue USD m 2,358.7 2,797.0 3,381.5 3,979.4 4,562.8
EBITDA USD m (22.0) 313.0 480.5 792.2 1,033.9
Core Net Profit USD m (434.3) (105.0) 223.7 424.0 678.4
Company Description and Statistics
52w High/Low (USD): 5.64/3.12
3m Avg Turnover (USDm): 75.0
Free Float (%): 16.1B
Major Shareholders: Uber Technologies, Inc. (14.0%), SB Investment Advisers (UK) Ltd. (11.0%), Toyota Motor Corp. (5.8%)
Price Performance
Historical Share Price Trend: Grab Holdings has experienced fluctuations in its share price, with a current price of USD 3.99 and a 12m price target of USD 5.75 (+44%).
Value Proposition
Structural Growth Drivers: Grab has a leadership position in all markets it operates in and enjoys structural scale advantages.
Mild Growth Headwinds: Take-rates are already in line-high vs global peers, and rising cost/inflation pressures are weighing on consumers’ discretionary spending and driver-partners’ take-home earnings.
Material E Issues
GHG Emissions: Grab reported avoiding more than 349,986 tonnes of GHG emissions in 2023.
Eco-Friendly Packaging: The company has introduced a carbon offset feature, allowing consumers to contribute USD0.10 per ride to reforestation and conservation efforts.
Key Metrics and Issues
Board Composition: 7 members, 5 independent, and 2 co-founders.
Women Directors: 33% on the board.
Financial Statement
Cash and Short Term Investments: USD 3,138.0m (FY23A), USD 2,964.0m (FY24A), USD 2,434.5m (FY25E)
Accounts Receivable: USD 676.0m (FY23A), USD 878.0m (FY24A), USD 1,042.7m (FY25E)
Conclusion
Grab Holdings has demonstrated a strong commitment to scalability, customer-centric growth, and operational efficiency. With its AI-led strategy, strategic acquisition of Validus Capital, and robust financial performance, the company is poised for growth in the Southeast Asian market. However, potential risks and swing factors, including competition and macroeconomic trends, should be closely monitored.
