GOTO - 9M23 results beat estimate, analyst meeting KTA

GOTO - 9M23 results beat estimate, analyst meeting KTA GoTo Gojek Tokopedia (GOTO) recorded continuous improvement in 3Q23 as Adj. EBITDA plunged 21.9%/70.4% qoq/yoy to IDR943 bn or -0.6% of GTV, ahead of our 3Q23 estimate of -0.7% of GTV. This was mostly attributable to monetization efforts and cost reduction strategy. On the other hand, GOTO also saw a return of positive growth in its overall GTV by 5.2% qoq on all three segments, yet gross and net take-rate decreased from 4.1% in 2Q23 to 4.0% in 3Q23 and to 2.4% that dragged down by lower e-commerce take rate on combination of reduced platform fee amid intensifying competition and a change in category mix. During the call, management re-emphasized to stick with Adj. EBITDA positive guidance by 4Q23 but stressed on tactical flexibility as a venue to defend its market share through healthy GTV, thus risks to guidance, in our view. In addition, management plans to further develop its budget segment in all of business segment given its proven profitability. For on-demand service, management strives for geographical expansion for GoCar Hemat and Go-Food Hemat focusing on low-cost assortment. For e-commerce, the company also eyes to enrich product assortment and improve product search as well as optimize its ads revenue. On fintech, the company aims to scale up high-margin cash loans as well as GoPay saving by Bank Jago (ARTO). (Source: Company) Comment: We are still revisiting our model as we plan to change our multiple valuation method, thus will come up with new target price.