Maybank Investment Bank has foreseen Grab‘s gross merchandise value (GMV) and loan-book growth to accelerate in the second quarter of 2025.
The research house said in a note on last Thursday that it expects Grab’s on-demand GMV to grow 20 percent year on year/8 percent quarter on quarter in the second quarter, helped by acceleration in its deliveries segment while mobility GMV growth remains firm.
Within its fintech business, it expects the firm’s loan-book growth to expand to $710 million, up 79 percent year on year/25 percent quarter on quarter.
“We think the topline acceleration is partially driven by an affordability push and partially at a cost of higher incentives/provisioning,” it said.
Nevertheless, it expects the firm’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to grow 73 percent year on year/5 percent quarter on quarter.
“Our on-demand GMV and adjusted EBITDA expectations for the second quarter are 1-2 percent ahead of street expectations,” it noted.
Grab’s second quarter results are due to be reported on July 30.
Maybank expects Grab’s second quarter deliveries GMV to accelerate to 21 percent year on year and 11 percent quarter on quarter growth.
This is driven by Grab’s push for savers deliveries while competition remains relatively stable as well as faster non-food delivery growth.
This would be the fastest growth for the segment in more than two years, said the research house.
Meanwhile, the firm’s mobility GMV is expected to grow at 19 percent year on year/4 percent quarter on quarter despite a high base last year.
“We think Grab is taking market share again, driven by its affordability push as we see its pricing consistently below competitors,” said Maybank.
While GMV growth is expected to be firm, it expects the firm’s margins (as percentage of GMV) to drop 10-15 basis points quarter on quarter, mainly due to higher partner incentives.
Maybank also thinks Grab has picked up non-ecosystem lending within its Digibank in Singapore and Malaysia and is targeting niche segments like loans for home renovation.
“While the loan book is expanding, we expect upfront loan loss provisioning to pick up,
“Nevertheless, we expect Financial Services division adjusted EBITDA losses to narrow to $25 million in the second quarter from $30 million in the first quarter,” said the research house.
Maybank opined that Grab is taking a more aggressive growth stance through its affordability drive and push into new segments like non-ecosystem lending whilst competition remains relatively stable.
“Our recent survey of 6-ASEAN markets also suggested price sensitivity for on-demand consumers is very high and as such Grab’s affordability push should help tap new users and take market share,
“We also see it investing in artificial intelligence (AI)/autonomous vehicles should in turn help improve future margins,” it noted.
While Grab-GoTo merger and acquisition (M&A) discussion has fallen off the radar, Maybank thinks its recent capital raise could be used to tap new growth areas such as investment in non-food delivery segments such as supermarkets as well as non-ecosystem lending.