Can Grab’s headlights pierce through economic fog?

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- Written by Shravanth Vijayakumar Journalist Hello {NAME} When things look dour, the interconnected nature of modern economies and industries are often put under the microscope. Layoffs across Southeast Asia and the rest of the world are no coincidence, but rather the expected result of interest rate hikes by central banks. Strong labor markets aren’t exactly conducive to reining in inflation. The global economy is overheating, and federal bankers are looking to put a lid on the spending power of both companies and consumers by raising the cost of borrowing. The government of Indonesia, Southeast Asia’s largest economy, raised not only interest rates but also the prices of subsidized petrol and diesel. Singapore has tightened lending limits for housing loans, while Thailand, Malaysia, Vietnam, Philippines, and Taiwan have been steadily hiking interest rates. Even the bravest economists are unlikely to place bets on how high inflation can go from here. In times of such uncertainty, investors are naturally less inclined to park their money in risky assets such as stocks, let alone in loss-making tech companies. Amid this economic quagmire, Grab (GRAB, NDAQ) has sought to provide clarity on its path toward profitability at its first-ever investor day last week. The headline was that the Singapore-based tech titan is [expecting to break even]( by the second half of 2024. However, that was not enough to appease jittery investors. Grab shares have fallen more than 8% since its investor day last Tuesday. The stock is currently flirting with a new record low at US$2.63 a piece, giving the firm a market value of about US$10.1 billion – well below the nearly US$40 billion valuation at which it went public last year. Nonetheless, as highlighted in today’s featured piece, Grab's bold move is a chance for the company to build credibility with investors, but comes with risks. We’ve already witnessed how poorly the market reacts when guidance targets are not met. Sea Group (SE, NYSE) shares tanked after it suspended full-year revenue guidance for Shopee, its ecommerce unit, in August. See also: [Was Sea’s 22% stock plunge after Q2 results an overreaction?]( The premium story also sheds light on how Grab, largely known for its ride-hailing and food delivery services, is placing a greater emphasis on GrabFin and how its financial arm keeps the cogs of the firm’s wider ecosystem running smoothly. Further, my colleague, Simon, touches upon Grab’s shift to an asset-light model in the groceries business and how the company is looking to draw inspiration from China's Meituan (3690, HKG) to integrate higher-margin businesses into its ecosystem through advertising. -- Shravanth  ---------------------------------------------------------------  THE BIG STORY [GrabFin takes center stage at investor day]( Grab’s inaugural investor day saw the super app hit the right notes, but will that be enough to attract backers?  ---------------------------------------------------------------  3 TRENDS TO KEEP AN EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Shopee leaves layoff trail at opposite ends of globe: The red flags were clear as day when Sea Group posted its quarterly report in August. Most worryingly, Shopee dropped its revenue guidance, with the ecommerce giant likely to fall well short of the now-withdrawn forecast. In the current macro environment, repercussions for a poor showing are almost inevitable. It all began in South America, where Shopee [shut]( operations in Chile, Colombia and Mexico, and exited Argentina entirely. The cost-cutting measures then [spread to]( Singapore, China, and Indonesia, where 180 employees were dismissed. Now, the Philippines, Taiwan, and [Malaysia]( have fallen prey to Shopee’s downsizing spree. Dozens of employees in Taiwan were asked to [pack their bags]( and leave on the same day they received the notice, while Shopee’s Philippine workforce was cut by a low single-digit percentage. News of Shopee choosing Toni Gonzaga as its latest brand ambassador [didn’t go down too well]( in the Philippines, where users and merchants took to social media to question how the company had money to hire the Filipino celebrity following recent layoffs, calling to boycott the platform. However, it wasn’t always so gut-wrenchingly bad for Shopee. In [this Tech in Asia Originals video]( my colleague, Candice, highlights how the firm grabbed at the chance of making the most of Lazada’s struggles and dethrone its rival as the undisputed leader of the Southeast Asia’s ecommerce scene. 2️⃣ Apple cautious with iPhone 14 production as demand fizzles: Apple (AAPL, NDAQ) always seems to outdo itself. Perhaps, that’s a sign of a business performing at the highest level. However, all good things must come to an end, and it appears that the world’s most valuable company is bracing for a potential slowdown in demand for its flagship iPhone. As is often the case after most iPhone launches, legions of social media users are greeted with an array of innovative and funny memes on the miniscule upgrades to each model. However, that has rarely ever hit demand for the premium smartphones. That is until the iPhone 14 and 14 Pro models, which were rolled out last month. The US-based tech giant [dropped]( plans to increase production of its new iPhones this year after an anticipated spike in demand failed to materialize. The company informed suppliers to cut back on the assembly of as many as 6 million iPhone 14 variants in the year's second half. News of Apple’s scuppered plans sent its shares down nearly 5% and wiped out well over US$100 billion in value in a single trading session, while also receiving a rare stock-rating downgrade from Bank of America (BAC, NYSE). 3️⃣ Public offerings brew under the surface in India: It’s funny how things change so quickly. Just last year, IPO records were being shattered, and a number of firms were raising massive sums by debuting on stock exchanges, but the market for public listings in 2022 has turned sour. Public listings for tech firms in the US market are seeing their worst year since the 2008 global financial crisis, and while Asia has fared better, courtesy listings in China and South Korea, accounting behemoth PwC predicts IPOs in Hong Kong will raise 40 per cent less cash than they did last year. The same can be said for India, where the number of IPOs has dramatically slowed. However, it seems that a number of high-profile startups are putting [listing plans in place]( behind the scenes. Hotel startup Oyo, India’s answer to Airbnb (ABNB, NDAQ), travel platform Ixigo, insurtech company Digit, and beauty firm Mamaearth are just few of the big-names currently laying the groundwork for a public debut in the near future. Also, working in their favor, the Securities and Exchange Board of India is [set]( to allow for confidential pre-filing of IPO documents.  ---------------------------------------------------------------  2 EYE-POPPING FACTS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. [30%]( - SoftBank (9984, TYO) founder Masayoshi Son is following up on his promise to implement cost-cutting measures as the Japanese investment conglomerate is set to axe 150 staff, or 30% of its global workforce at its Vision Fund Unit and SoftBank Group International. This figure is still lower than the 50% downsizing called for by some executives internally. [US$800 million]( - The largest IPO in Hong Kong this year ended with disappointment last week after Chinese electric vehicle maker Zhejiang Leapmotor Technology (9863, HKG) closed 33.5% below its IPO price on opening day - the worst first day performance for a listing above $500 million in the city on record.  --------------------------------------------------------------- THE ONES YOU DIDN'T SEE COMING We spotlight the unusual, not-your-everyday kind of story that has got everyone talking and social media buzzing over the past week.  Cardboard cars and Elon’s Cybertruck/boat? No, this cardboard car doesn’t get soggy when it rains. In fact, it won’t even buckle if you stand on it. At least that’s what Citroën, a unit of Stellantis (STLA, MI), the world’s fourth-largest carmaker by production figures, claims its concept car "Oli" [can do](. As the world hastens its shift away from fossil fuels, Citroën uses a specialized honeycomb format cardboard, reinforced with plastic coating, in this futuristic electric sports utility vehicle, which weighs less than a tonne and can clock 110 kilometers per hour. Meanwhile, Elon Musk, CEO (or Technoking) of the world’s most valuable carmaker Tesla (TSLA, NDAQ) and the man with a strong claim for being the first to bring electric cars to the masses, has said that the long-postponed Cybertruck can serve briefly as a boat. “It (Cybertruck) can cross rivers, lakes & even seas that aren’t too choppy," the world's richest man [said on Twitter](.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894