GOTO - Maintains cost cutting measures

GOTO - Maintains cost cutting measures Goto Gojek Tokopedia (GOTO) is committed to continue its cost efficiency measure, yet ruling out employee lay-off that was previously carried out in 4Q22. Furthermore, management stated that it will shift its efficiency focus on technology costs, especially cloud expenses rather than human resources. (Source: Bisnis) Comment: Cost initiatives are the main area that the company is focusing on to improve its profitability, in addition to business process streamlining and product innovation. As it was reflected in 9M23, GOTO's adj. EBITDA improvement was mainly coming from cost cutting. However, we opine that cost cutting alone will not be sufficient for a turnaround especially in the event of intensifying competition. Meanwhile, we stay conservative with our GOTO’s profitability forecasts of adj. EBITDA turnover by at least 2Q24 given tight e-commerce and limited upside for ODS take-rate. However, we appreciate GOTO’s efforts to expand fintech should prop up its profitability due its high margin nature of BNPL and controllable asset quality. We retain our BUY call with lower TP of IDR97 per share.