Maybank Investment Bank has revised up Indonesian tech platform GoTo Gojek Tokopedia FY25/26 revenue forecasts by 17 percent/ 15 percent, after the firm’s first nine months revenue beat its forecast.

Maybank said in a note on Friday that it has raised the firm’s target price to IDR 105 ($0.0066) from IDR 95 ($0.006) and maintain buy on the stock.

According to the research house, GoTo Gojek Tokopedia’s revenue beat its forecast due to the stronger-than-expected on-demand services (ODS) segment and expansion into the lending business, which has a higher take-rate than ewallet/payments.

Maybank also expects GoTo’s operating losses to narrow. It thinks GoTo’s cash balance of about IDR 21.9 trillion ($1.38 billion) in the first nine months of 2024 can support its operations.

It is noted that GoTo Gojek Tokopedia ODS net revenue rose 82 percent year on year to IDR 7.9 trillion ($499.03 million) (achieved 83 percent of Maybank old forecast of IDR 9.5 trillion [$600.14 million]).

“We expect momentum to continue and project ODS GTV at IDR 62 trillion ($3.92 billion)/ IDR 69 trillion ($4.36 billion)/ IDR 74 trillion ($4.68 billion), up by 14 percent/ 10 percent/ 8 percent year on year in FY24/25/26,” Maybank said.

Meanwhile, the research house expects a gross take-rate of 22 percent in FY24-26 and anticipate a net take-rate of 17.3 percent in FY25/26 (versus 17.2 percent in FY24) for GoTo Gojek Tokopedia – translating to net revenue of IDR 10.7 trillion ($675.94 million)/ IDR 11.9 trillion ($751.64 million) / IDR 12.8 trillion ($808.86 million) in FY24/25/26.

Maybank also expects its ODS to be profitable, projecting operating profits of IDR 342 billion ($21.61 million)/ IDR 592 billion ($37.4 million) in FY25/26 (versus IDR 79 billion [$4.99 million] loss in FY24).

However, it is subject to cost efficiency and marketing (related to competition), it added.

Maybank views the lending business as the future driver of GoTo, as it has a higher margin.

It estimates average lending rate of 4 percent for the firm, versus payment take rate of about 0.5 percent.

Maybank also forecasts an average lending book of IDR 7.4 trillion ($467.65 million)/ IDR 8.3 trillion ($524.47 million) in FY25/FY26 for the firm, with an average yield assumption of 4 percent, translating to lending revenue of IDR 3.6 trillion ($227.48 million) / IDR 4 trillion ($252.75 million) in FY25/FY26 (versus management’s target of about IDR 8 trillion ($505.49 million) to IDR 9 trillion [$568.71 million] lending book by end-9M25).

We think Goto’s fintech division GTF is a profitable business, and are projecting operating profits of IDR 311 billion ($19.64 million)/ IDR 551 billion ($34.8 million) in FY25/26.

However, it still expects operating loss at a consolidated level for the division, mainly as it anticipates corporate costs of about IDR 1.9 trillion ($119.99 million) / IDR 1.8 trillion ($113.69 million) in FY25/FY26.

Overall, Maybank thinks the digital economy in Indonesia is heading towards consolidation with two leading players, GOTO and Grab.

It believes GoTo will become the leader in ODS (competing with Grab), while fintech (Go-Pay) can be the next source of growth, driven by expansion to lending business.

Maybank is also positive about GoTo’s decision to exit the e-commerce business in Indonesia, mainly because competition is intense between Shopee Indonesia, Lazada Indonesia and TikTok Shop.

“Hence, GoTo no longer deploys resources competing the giants and burdens its finances with intense promotions,” it noted.

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