GoTo’s numbers are a no-go for investors

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Hello reader,

As the US presidential race goes into full swing, I’ve seen lots of TikToks about Kamala Harris, the current vice-president and now the Democratic nominee.

She’s of South Asian heritage, and a lot of Asian American content creators have been jokingly asking people if they’re sure they want her to be president. If she wins, it will just be fodder for the stereotypical Asian parent who always judges their children’s life choices: “If Kamala can be president, why can’t you?”

In a way, Indonesia’s GoTo Group is dealing with its own unsatisfied Asian parent: investors. The company posted decent results for the second quarter of 2024, but its share prices fell after the announcement. GoTo is now like a child trying to figure out how to get parental approval.

Of course, the drop in share price could have nothing to do with GoTo’s performance and was related to something else instead. My colleague Simon shares more in today’s premium story.

Today we look at:

• Why GoTo Group’s investors aren’t satisfied despite strong Q2 results
• A Chinese developer of “flying cars” that has raised funds from a battery giant
• Other newsy highlights such as Tesla’s plans to sell insurance in China and Flipkart’s entry into quick commerce

Premium summary

Good news but not quite good results

Image credit: Timmy Loen

Indonesia’s GoTo Group has failed to gain favor with investors despite its robust Q2 numbers, with shares falling by 3.6% to 53 Indonesian rupiah (US$0.003) in the trading day after the announcement. This is despite the firm’s core gross transaction value (GTV) increasing by 54% year on year to US$3.9 billion. Gross revenues also jumped by 39% to US$262 million during the same period.

• Mass market: While GoTo’s financials were impressive, there’s still one area of concern: profitability for on-demand services, which include ride-hailing and food delivery.Focusing on mass market consumers with lower-priced services affects profitability in the short term, but management believes this approach will lead to increased adoption of GoTo’s financial products in the long run.
• Money begets money: The company’s fintech business doubled its gross revenue and logged a 27.5% uptick in GTV, driven by GoPay e-wallet downloads and strong growth in buy now, pay later and cash loan offerings.
• Other factors at hand: GoTo’s share price struggle may be related to factors outside of its performance, such as the overhang of shares held by SoftBank and Alibaba, which may be looking to sell down their stakes. Another concern is the Indonesian market itself, which is relatively illiquid and smaller compared to the US.

Read more: Why investors aren’t buying GoTo’s decent Q2 results

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