BELI – EBITDA loss declines in 2Q23 amid soft TPV

BELI's recorded an encouraging improvement on its profitability with EBITDA loss declining 30.9% yoy/5.8% qoq in 1H23/2Q23 to IDR1.59 tn/IDR770 bn, or better than our estimate. This brought EBITDA loss to TPV declining yoy to 4.3% thanks to improved efficiency efforts, yet picking up qoq to -5.5% in 2Q23. On the other hand, BELI's 2Q23 TPV declined 21.3% qoq, which is below our FY '23 estimate at 47.0%. By segment, the lower TPV qoq was attributable to declined 3P qoq. Furthermore, blended take rate softened by 482bps qoq, hampered by lower take rate for 1P and physical stores in 2Q23. Despite that, BELI's net revenues grew 3.0% qoq/15.9% yoy in 2Q23/1H23 to IDR3.95 tn/IDR7.8 tn, amid higher institutions revenue as clients surged +205% qoq, as well as physical stores and 3P segments. The company also reports a completion of divestment transaction of Halodoc valuing IDR538 bn, that yielded a gain on sale of IDR71.1 bn. Comment : Despite improvement in profitability metrics, it is worth noting that it recorded a soft operational performance especially TPV growth, take rate and AOV, as we believe, it might have impacted by post-covid normalization. Although, better EBITDA to TPV indicated efforts to maintain cost discipline. We currently retain our BUY call, while waiting for management's remarks on Aug 3 for more guidance.