The Insiders Fund, LP on Grab Holdings Limited
Thesis
The Insiders Fund initiated a small position in Grab because of its leadership across Southeast Asian mobility, delivery and financial services. Continued smartphone and internet penetration across a region of more than 675 million people provides a substantial runway, while profitability is improving. The CEO bought roughly $30 million of shares during weakness, reinforcing a valuation case that the fund estimates at more than a 45% discount to external targets and conservative discounted cash flow. The fund views this as an improving but still unproven execution story and wants further research before committing more capital.
“This one's a show-me story that's starting to show something.”
Key risks
- Execution has historically been inconsistent
- Quality of reported cash flow requires scrutiny
- Integration risk from the Atome Financial acquisition
- The Atome transaction valuation may prove unattractive