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Hello reader,
Running my eyes over last week’s inflation data and the earnings of major banks has left a lump in my throat – the kind that leaves one befuddled and speechless. For starters, JPMorgan Chase (JPM, NYSE) suspended share buybacks to prepare for credit losses in the face of a worsening macroeconomic climate.
When the world’s most valuable bank takes drastic measures to protect itself against the growing risks of a recession, you know that the near-term economic future is looking somewhat bleak, at the very least. However, there are some industries that excel amid tough macro conditions.
Consumer staples, healthcare, education, defense, and utilities are some of the sectors considered recession-proof, but loss-making tech firms that pin hopes of profitability on rapid growth tend to perform poorly as economies shrink. We’ve already seen public markets punish stocks like these.
Shares of Grab (GRAB, NDAQ) and PropertyGuru (PGRU, NYSE) have been hit hard, falling around 75% and 50%, respectively, since making their market debuts. Meanwhile, Shopee-owner Sea Group (SE, NYSE) has shed more than 70% of its market value over the last year.
That begs the question: Why has GoTo Group (GOTO, IDX) been spared the market’s wrath? While the company’s stock has been incredibly volatile, its value hovers around its IPO price.
Could it be that GoTo got its IPO plans spot on by listing on the local Indonesian Stock Exchange, which has outperformed its global peers? That’s unlikely to be the case, given locally-listed Bukalapak’s (BUKA, IDX) struggles. The ecommerce giant, which is a homegrown brand like GoTo, is down more than 70% since its IPO in 2021.
In this week’s Big Story, Tech in Asia crunches the numbers and dissects the charts to unravel the mystery behind the significant premium attached to GoTo’s valuation and what that means for the tech giant’s future.
— Shravanth
THE BIG STORY
Does GoTo deserve to trade at 6x Grab’s valuation?
Image credit: Timmy Loen
GoTo’s shares are trading at a significant premium to its peers, supported by projected strong revenue growth. But future returns may be more muted.
3 Trends to keep an eye on
Hot stocks, earnings reports, restructuring, pressure from activist investors, and more.
2 Eye-popping facts
The ones you didn’t see coming
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