ASEAN Internet "Time for home coming?" Killa

Research evidence excerpt

ASEAN Internet "Time for home coming?" Killa

ASEAN Internet UBS Research

setting the context

Could a home market listing support re-rating amidst AI/AV

disintermediation concerns?

Consumer internet stocks especially in emerging markets, have derated over the past Grab and Sea have seen among the

12-18 months as investors are concerned about potential business model disruption steepest valuation multiple de-rating

from AI agents as well as rising competitive intensity especially in e-commerce. In our amid the AI driven market rotation

view, segments such as e-commerce and on-demand services should be less exposed to

AI disintermediation, given logistics is a key differentiator in driving consumer

satisfaction.

Yet, both Sea and Grab have seen NTM EV/EBITDA contract by c50% in the last 12

months alone, exceeding the multiple contractions seen globally even in OTA and

classifieds, which are arguably more vulnerable to AI disruption. Relative to global e-

commerce and ODS peers, Sea and Grab have also seen among the steepest NTM EV/

EBITDA contractions.

Specifically for Grab (link), long-term concerns around disruption from AVs continue to

weigh on investor sentiment, particularly among US investors. In our view, AVs is

perhaps a distant risk in ASEAN given the low labour cost, less developed road

infrastructure and government sensitivities to job displacements. Yet, the de-rating of

Grab has been more pronounced even compared to Uber.

Given these concerns especially among US investors where both stocks are listed; we

have seen increasing questions from investors in Asia, on whether these companies

should pursue a Singapore listing. This is all the more relevant given recent initiatives

around the Singapore government's equity market reforms (e.g. EQDP) and the