GoTo's offering is pricier than peers Bukalapak, Bank Neo Commerce: UOBKH

EVEN at the lowest end of the 316-346 rupiah per share range, Indonesia's largest tech firm GoTo's offering price is valued significantly higher than its peers, according to UOB Kay Hian (UOBKH).

In a report on Friday (Mar 25), analyst Stevanus Juanda estimates that GoTo's valuation at the offering price of 316 rupiah comes in at 9.8 times FY2023 price-to-sales estimates.

This is compared to GoTo's peers Bukalapak and Sea at 7.5 times and 3.8 times, respectively, among other regional and global digital companies.

On the back of a cheaper valuation, UOBKH maintains its "buy" call on Bukalapak with a target price of 790 rupiah. The research house also highlights Bank Neo Commerce as a cheaper option and has a "buy" call on the stock with a 3,300 rupiah price target.

While Juanda does not expect GoTo to report profitability within the next 3-5 years, he sees upside in certain segments of the group's businesses aside from its ride hailing business Gojek, which currently enjoys strong growth and high-take up rates.

This is especially so given the low take rate of 2.2 per cent in GoTo's e-commerce segment Tokopedia, compared to Alibaba and Shopee's take rates of over 6 per cent.

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The analyst is expecting Tokopedia to turn profitable in 2024.

"Tokopedia's take rate is expected to reach 4.1 per cent in 2025. Gojek's take rate was 23.6 per cent in Q2 2021. (GoTo's) overall take rate has risen from 3.7 per cent in Q3 2020 to 3.8 per cent in Q3 2021," he noted.

"Considering these, especially the low take rate of Tokopedia, we believe there is upside to GoTo's take rate."

GoTo's gross transaction value (GTV) is also "very strong", in Juanda's view, having grown 67 per cent year on year to 120.7 trillion rupiah (S$11.41 billion) in Q3 2021 from 74.7 trillion rupiah.

To recap, GoTo is planning to offer 52 million shares, which is equivalent to 4.35 per cent of its total shares, to raise between 16.43 trillion rupiah to 17.99 trillion rupiah at 316-346 rupiah per share.

GoTo has already received sufficient investor orders from its initial public offering (IPO) within this targeted price band, according to sources cited by Reuters.

Pricing for the IPO is slated for early April 2022 before it is open to retail investors.

READ MORE: 

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