Jakarta (ANTARA) - BRI Danareksa Sekuritas released a report that stated GOTO could achieve a positive contribution margin in 3Q23 and positive EBITDA even with no fundraising assumption. The report debunked the circulating fear that GOTO may not have enough cash runway to take the company to profitability.

The security company calculates that GOTO’s total GTV can grow further in 4Q22 by ~Rp6tn inline with the guidance, if not more, helped by seasonality. Steady growth is foreseen in 2023 at a quarterly rate of ~4% withstanding a series of upward fee adjustments.

“We continue to believe that contribution margin positive is doable from 3Q23 while EBITDA should be positive in 2025 even in the absence of any new fundraising,” wrote Niko Margaronis, Research Analyst at BRI Danareksa Sekuritas.

The belief was influenced by some key business updates.

First, the new fees scheme for Tokopedia’s Official Store can help Tokopedia’s take rate to climb to 4%+ in 2Q23.

Secondly, GoTo through Gojek also aptly rides on the momentum of mobility recovery. Gojek raised commission fees charged to drivers in Singapore from 10% previously to 15%.

Not only raising the commission in Singapore, Gojek also launched premium or value-added services through GoCar.

“Gojek is also driving differentiation aiming to penetrate households in Singapore with Gocar Kids and GoCar XL Kids. In Jakarta too, the Gocar service has expanded to more spacious and luxury vehicles addressing new market segments,” Niko further explained.

Lastly, Niko believed that GOTO Financial remained the key driver for the ecosystem cohesion and growth through the adoption of GoPay.

“GoPay will remain a key adoption catalyst and with Gofood, Gobiz, Gomodal and Gokashir services, Gopay can achieve more penetration,” Niko explained.

Moving forward, Niko expects that GOTO’s ecosystem synergies between three business segments can drive down the promotions and advertising & marketing expenses.

With the aforementioned reasons, BRI Danareksa Sekuritas maintains BUY with a lower Target Price to reflect global appetite for tech. GOTO is currently trading at 2.6-3.0x EV / gross revenues 2023-24 and 3.6 - 4.2x P/Gross revenues 2023-24, justifiably with a premium over GRAB and SEA Limited.

“Our new valuation considers the low internet economy penetration in Indonesia as well as GOTO’s unique ecosystem advantages. Those assumptions also imply that cash balances may just about prove to be enough,” Niko wrote.

BRI Danareksa Sekuritas’ report is the latest analysis covering GOTO after Samuel Sekuritas revised its recommendation from hold to buy last week.

Reporter: PR Wire
Editor: PR Wire
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