Grab – The Next Iconic Tech Goliath of Southeast Asia?

According to Jack Kouzi, Director of Strategy at VFS Group, an Australia-based wealth management firm, Grab’s going public via the special purpose acquisition company (SPAC) merger with Altimeter Growth Corp is great news for investors.

Likewise, Kouzi’s take on the Coinbase IPO and the end of the regulatory saga for Alibaba are all indicative of positive trends in the market.

Grab’s Growth Potential

Kouzi believes that Grab’s current valuation of USD 40 billion was justified, calling the company “a Goliath of Southeast Asia, and a Goliath of Tech around the world.” As this technology giant is involved in multiple businesses like ride-sharing, food delivery, and fintech, Grab is poised for enormous growth. Kouzi singled out the mobile payment sector as a key growth area.

That said, he does see downside risks to Grab, namely the narrow margins intrinsic to its business, particularly in the food delivery space, as well as the increased competition from Chinese companies.

Overall though, Kouzi marked this IPO as a golden opportunity to buy Grab shares on the open market, and he also expressed confidence in the due diligence done by Altimeter.

Coinbase IPO Sign of Cryptoboom

Yet another exciting IPO that Kouzi weighed in on was Coinbase, valued at USD100 billion dollars, which he deemed as historic. Coinbase is the first cryptocurrency player to IPO in a major stock market and is yet another sign that cryptocurrencies are becoming mainstream. Kouzi thinks that the IPO will make cryptocurrencies more accessible to people who want to trade in the asset class.

However, one point of concern he raised was the expensive fees charged by Coinbase, ranging from about 3.9% in fees and 1.8% in transactions. Kouzi cautioned that in the event of a bear run on the crypto market, this could weigh down the revenue prospects of Coinbase.

Sigh of Relief for Alibaba?

Commenting on another recent development in the tech sector, Kouzi believes that Alibaba’s troubles with Chinese regulators are over, following the hefty USD2.8 billion fine imposed on the tech giant.

All things considered, Kouzi said the fine was fairly lenient, as it was only 4% of their 2019 domestic sales and indicated a sign of good faith from the regulator. With what is hopefully the end of the regulatory saga, Kouzi is bullish on Alibaba’s future prospects and believes now is the time to buy.

The outlook for the Ant Group however is less clear, as it still needs to fulfill several other requirements imposed by the regulators, including obtaining a national banking license. Nevertheless, Kouzi viewed these changes as expected and that Ant still has the market advantage. The bigger question is who will be the next Chinese tech giant to come into the regulators crosshairs?

Written by Parimala Thanabalasingam and edited by Shazana Mokhtar