Shareholder DIDI’s delisting from the US drags Grab down by 20%？

HIghlights: 

• Grab's plunged over 20% after SPAC debut

• Major shareholder Didi announced delisting the same day

• Compare the development of Uber, LYFT, DIDI, what's your opinion on Grab' future?

$(GRAB)$Southeast Asia's online car-hailing and express delivery giants exist like a super unicorn, attracting the attention of the capital market and users.

In 9 years, Grab successfully repelled the invasion of travel giants Uber and Didi, and has grown into today's super APP that integrates travel, food delivery, and mobile payment.

Yesterday, I Failed guess the trend of$( GRAB)$，Although it opened higher, it ended up at $8.75 with a decrease of 20.53%.

After the opening, the $(GRAB)$’s market value rose sharply and exceeded US$50 billion，Finally the market value ended to $34.556 billion on Thursday.

Was the plunge last night a normal retracement of its high valuation, or was it affected by news of any change?

Firstly，a message seems related:

Grab’s shareholder, the Chinese Internet giant $(DIDI)$ Travel’s official Weibo post stated: “After careful study, the company will start delisting on the New York Stock Exchange immediately and start preparations for listing in Hong Kong.”

$(DIDI)$ was listed on the New York Stock Exchange at the end of June 2021. This is China's largest IPO in the United States in the past seven years.

Grab is also known as the Southeast Asian version of DIDI, and its growth path is similar to DIDI. Both DIDI and GRAB was launched in 2021 one after the other.

Of course, there are also important shareholders such as SoftBank and Uber among Grab shareholders. The difference is that Didi is an important shareholder of Grab, and Didi has made investments many times.

According to public information：

• In 2017, Grab completed a $2.5 billion financing, led by SoftBank and DIDI.

• In 2018, Uber asked Grab to acquire Uber's Southeast Asia business. As part of this acquisition, Uber acquired a 27.5% stake in Grab.

• In August 2018, Grab announced that it had completed a $2 billion financing. Investors include Toyota Motor Corporation, Ppenheimer Funds, Ping An Capital, Mirae Asset's Naver Asia Growth Fund and many other global institutions.

Finally:

Founder Anthony Tan Ping Yeow holds 2.2% of the shares and owns 60.4% of the voting rights;

SoftBank holds 18.6% shares and has 7.6% voting rights;

Uber holds 14.3% shares and has 5.8% voting rights;

DIDI holds 7.5% of the shares and has 3.1% of the voting rights;

Toyata Motor holds 5.9% shares and has 2.4% voting rights.

Calculated based on the closing market value, this part of the equity held by $(DIDI )$ is worth about 2.5 billion U.S. dollars. Therefore, perhaps this major shareholder's big dynamic has a certain emotional drag on the market's decision-making.

From the perspective of business data analysis, Grab has a net loss of more than US$2 billion for at least three consecutive years in 2020 ; net income in 2020 is US$1.19 billion with a net loss of US$2.7 billion.

At of the end of 2020, the company's accumulated losses reached US$10 billion; total assets were $5.5 billion and total liabilities were US$11.7 billion. Grab's gross merchandise transactions (GMV) for the three months ending September 30, 2021 reached US$4 billion, an increase of 32% over the same period last year.

However, due to the impact of the epidemic, Grab’s revenue in the third quarter of 2021 was US$157 million, a 9% decrease from US$172 million in the same period last year, mainly due to Vietnam’s strict new crown lockdown policy.

Compared to the same category listed company UBER, Lyft, and DIDI, they were all rising on the first day of listing. Besides that, Grab's current scale exists still has a gap within Uber or DIDI.

• On November 4, $(Uber)$ released its financial report for the third quarter of fiscal year 2021 ending September 30: Uber reached its revenue milestone due to the recovery of rides and the increase in deliveries. At the same time, the third quarter ushered in its history. For the first time, the adjusted profit was positive, and the adjusted EBITDA profit was US$8 million, which was higher than the adjusted EBITDA loss of US$507 million in the second quarter.
• Its competitor$( Lyft )$also achieved a quarterly turnaround for the first time in the third quarter ending September 30, 2021, with an EBITDA profit of US$23.8 million.
• $(DIDI )$had 493 million global active users in the first 12 months to the end of the first quarter of 2021. According to the DIDI prospectus data in June 2021, Didi achieved revenues of 135.3 billion yuan, 154.8 billion yuan, and 141.7 billion yuan in 2018, 2019, and 2020, respectively; net profit losses were 15.492 billion yuan, 10.081 billion yuan and 141.7 billion yuan in the same period. 10.911 billion yuan.

After three consecutive years of large losses, $(DIDI’)$s Q1 net profit in 2021 was 5.483 billion yuan, mainly due to investment income of 12.361 billion yuan. If investment income is deducted, Didi’s actual loss in Q1 2021 is still close to 7 billion yuan.

So, after compare $ (UBER) $ (LYFT) $ $(DIDI) $, what's your bullish or bearish opinion about$( Grab)$ in future?

Some comments from Grub‘s users：

• GrabKeep raising fees for both food delivery services and transportation.
• Even top up credit card also charge admin fee
• Grab has been aggressive trying to attract and retain customers. Constantly giving out discounts, voucher, incentive, points, etc.
• Good for customer but not so good for share holders