GOTO IJ - MNC Sekuritas Equity Report (170323)

MNCS INITIATE REPORT
MNC Sekuritas Research Division | March 17, 2023
PT GoTo Gojek Tokopedia Tbk (GOTO IJ)

Internet Services & Technology
Go Far, Go To Profit
The Beginning of the Turnaround Story
GOTO is one of the technology company in Indonesia, formed after the merger between Gojek and Tokopedia
in May-21. The company aims to become profitable going forward and plans to achieve positive adjusted
BUY EBITDA by 4Q23F through three strategies: increasing monetization, optimizing costs, and growing the
ecosystem-based product. To maximize monetization, we expect GOTO to increase its take rate by +30bps
Target Price : IDR168 annually up to FY25F. The increase of the take rate was achieved by adjusting the tariff of the on-demand
segment and increase of platform fee in the on-demand and e-commerce segments, as well as the integration
of the digital ecosystem. GOTO also intents to grow its ecosystem-based product by developing new products
such as GoPayLater Cicil with its high margin. Additionally, the company benefits from having a comprehensive
Stock Data portfolio in the digital ecosystem, which could further enhance monetization while also maintaining customer
loyalty as the company recorded a higher ATU compared to peers.
Current Price : 117
GOTO’s Liquidity Should Not Be Underestimated
52wk Range H-L : 81 - 442
GOTO is generally viewed having the shortest cash runway for up to 7 quarters adequacy to fund their
operation. Despite that, GOTO's ability to maximize funding through equity instruments is superior given
Share Outstanding : 1,133.79 bn
recent hostile environment, as the company managed to record the lowest gearing ratio. In fact, Sea has
received funding through equity and debt financing, with 60% of the USD16bn raised in the last five years
Free Float : 60.71%
coming from convertible notes. Meanwhile, Grab has mostly been funded through equity, but in 1Q21, it
issued USD2bn worth of non-convertible bonds and repurchased around USD850mn. In the digital bank
Mkt Capitalization : 138.57
(IDR tn) services, GOTO is the pioneer, owning 21.4% stake of ARTO, while Sea has Seabank, and Grab has Bank Fama
upon collaboration with EMTK. Yet, in terms of capital size, Seabank and Bank Fama are still relatively small and
categorized as KBMI I bank, unlike Bank Jago who is categorized as KBMI II. Thus, to catch up with ARTO, both
Sea Bank and Bank Fama still need at least IDR3tn additional capital. Furthermore, with Bank Fama being the
Major Shareholders last to tap into the digital bank segment, there still remains a need for portfolio clean-up and technology
investment, by which Grab needs to have more restricted cash to support its digital business expansion.
Taobao China Holding Ltd. : 9.24%
4 Reasons We like GOTO
SVF GT Subco (Singapore) Pte. Ltd. : 9.10%
• FTSE inclusion. GOTO will be included in the FTSE Global Equity Index Series (GEIS) Asia Pacific Ex-Japan
Goto Peopleverse Fund : 7.99% Ex-China as a large cap stock, effective March 20, 2023. With the global inclusion, there is a possibility for
increased foreign flow and could be a positive catalyst for the stock price.
Government of Singapore : 5.60% • Liquidity. GOTO's liquidity was affected by a lock-up period on some of its pre-IPO shareholders. The
lock-up period has now expired, increasing GOTO's free float to 60.7% and increasing liquidity in the
PT Saham Anak Bangsa : 2.37% secondary market. This is further justified from GOTO being the top 10 most actively traded stocks in
Indonesia.
Public : 64.83%
• Proxy of Indonesia’s digital economy. Due to its size and comprehensive ecosystem, GOTO is referred to
Treasury stock : 0.87% as the proxy of Indonesia’s digital economy, which benefits the company as Indonesia's digital economy is
expected to grow at a CAGR of 19% from FY22-FY25F, primarily driven by e-commerce. The drivers of the
growth include: 1) the shift in consumer behavior towards e-commerce, transport, and food delivery; 2)
growing digital financial services, including digital payments; 3) willingness to pay more for sustainable
products or services.
• The Most Complete Digital Ecosystem. GOTO has a comprehensive digital ecosystem in Indonesia, with
on-demand, e-commerce, and fintech segments. The on-demand segment has the highest take rate
among other segments, while e-commerce could be the integrated ecosystem enabler through Tokopedia
as well as the potential high AOV. Meanwhile, the fintech segment has the highest growth among other
segments and could be monetized.
Initiate Coverage on GOTO IJ with a BUY call; TP: IDR168

We initiate coverage of GOTO with a BUY rating and a Target Price of IDR168/share (+43.6% upside),
implying an EV/revenue of 6.3x/5.3x in FY23F/FY24F using SOTP. We use revenue multiple rather than GTV or
other platform size key metric as company shifted orientation from growth focus to deliver profitable business
mindset. Downside risks: 1) possibility of valuation de-rating as systematic risk increase due to SVB liquidity
and solvency problem; 2) startup funding squeeze; 3) interest rate hike; 4) slower-than-expected increase of
monetization primarily in high-margin business such as lending.
Key Financial Highlight
FY20 FY21 FY22E FY23F FY24F
Net Revenue (% YoY) 44.4% 36.3% 151.7% 48.4% 40.5%
EBITDA (% YoY) -51.6% 120.2% 15.0% -38.1% -48.7%
Research Analyst Net Income/loss (% YoY) -37.6% 50.5% 98.6% -61.0% -44.6%
Andrew Sebastian Susilo P/GTV (x) 0.4 0.3 0.2 0.2 0.2
[email protected] P/sales (x) 43.1 31.6 12.6 8.5 6.0
P/B (x) 6.9 1.0 1.2 1.3 1.3
EV/GTV (x) 0.4 0.3 0.2 0.2 0.1
Tirta Widi Gilang Citradi
EV/revenue (gross) (x) 10.3 7.2 5.3 4.3 3.6
[email protected] EV/revenue (net) (x) 36.6 26.9 10.7 7.2 5.1
Sources: Bloomberg, MNCS
www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 1

MNCS Initiate Report | MNC Sekuritas Research Division
REPORT CONTENTS
GOTO At a Glance…………………………………………………………………………………………………………………………………………………………..…3
Understanding GOTO……………………………………………………………………………………………………………………………………………………..…5
The Promise : Fast-Tracking Profitability…………………………………………………………………………………………………………………………...7
Answering Concern : A Closer Look at Cash (Liquidity)……………………………………………………………………………………………………..16
Valuation……………………………………………………………………………………………………………..…………………………………………………………….19
Key Investment Thesis: 4 Reasons We Like GOTO…………………………………………………………………………………..........…………………..21
Thinking About Risk…………………………………………………………………………………………………………………………………………………………..24

GOTO at a Glance
PT GoTo Gojek Tokopedia Tbk (GOTO) was established after the 2021 merger of Indonesia's two
largest tech startups, Gojek and Tokopedia. GOTO’s establishment also marked the birth of largest
digital ecosystem in Indonesia with 3 main businesses : 1) on-demand; 2) e-commerce and 3) fintech.
On April 11, 2022, GOTO officially listed on the IDX receiving IDR13.7tn (~USD1bn) of fresh funds
after issuing 40bn shares (~3.4% outstanding shares). It was the largest IPO by size in 2022. Worth-
noting that GOTO successfully managed an IPO even with the challenging market backdrop during
the early phase of monetary tightening.
Exhibit 1. GOTO group structure
Sources : Company, MNCS Research
Gojek – the on-demand arm of GOTO

Gojek was founded by Nadiem Makarim who currently serves the country as Minister of Education.
Gojek has started its journey as a ride hailing provider back in 2010, when it only operated through
a conventional style of call center based employing 20 drivers in Jakarta. Later it became the first
Indonesian startup to be valued ~USD1bn (unicorn) in 2016. At that time, Gojek expanded its
operation from on-demand only to tapping into digital payment by launching GoPay. A year before,
Gojek mobile app launch has gained traction from users with the core offering 4 main services : 1)
GoRide; 2) GoSend; 3) GoFood and 4) GoMart. In 2018, Gojek expanded to Vietnam and Thailand
and hitting a milestone of 100mn transaction per day. In 2019, Gojek hit new milestone with >20
products and ~2mn driver partners. A year later, in 2020, Gojek app has been downloaded 190mn
times.
Exhibit 2. Notable on-demand services portfolio

Gojek Services Description
GoRide Offer 2-wheel ride hailing services
GoCar Offer 4-wheel ride hailing services
GoBluebird A taxi order service in partnership with the largest private transportation operator Blue Bird
GoSend A goods delivery service owned by Gojek
GoBox A freight services covering 16 large cities in Indonesias

Tokopedia – the e-commerce arm of GOTO

Tokopedia is founded by William Tanuwijaya and Leontinus Alpha Edison in 2009 and at that time
the company launched a web-based C2C commerce. In 2014, Tokopedia mobile application was
launched. Tokopedia became a unicorn in 2017, a year after Gojek. At that time Tokopedia also
launched official store to facilitate B2C transactions. As of the end 2018, Tokopedia’s value was
estimated to be around USD7bn.
Exhibit 3. Notable e-commerce services portfolio

Tokopedia Services Description
Povides a variety of product for consumers through marketplace, official store, instant
E-commerce
commerce, interactive commerce and rural commerce
Works with 13 leading logistics & fulfillment partners with an integrated system and
Logistic & Fulfillment
warehouses services
An advertising technology to promote merchants scale up its business performance
Marketing & Ads
through Pay for Performance (P4P) ads, display ads & customized marketing
Tech
packages services
GoTo Financial – the fintech arm of GOTO

The third GOTO’s business segment is GoTo Financial which previously a fintech arm of Gojek with
the main product of GoPay. Currently, GoTo Financial owns 3 services portfolio offered both to
consumers and merchants : 1) payment (GoPay and Midtrans), 2) financial services (gopaylater,
goinvestasi, gomodal, gosure and GoPaylater Cicil); 3) merchant financial solution (gobiz and Moka).
Exhibit 4. Notable fintech services portfolio

GoTo Financial Services Description
GoPay A versatile e-wallet and consumer payment service
Midtrans A payment gateway for merchants and businesses
goinvestasi Help consumers to have investing mindset and saving habit
GoPaylater Cicil A BNPL product in partnership with Bank Jago
One stop solution app for merchants to grow their business offering orders record,
gobiz
providing payment system and attracting consumers
Moka A Point of Sales (POS) for merchants and business solution

Understanding GOTO
GOTO: a super-app provider
GOTO aspires to be a super-app, interestingly, there is no firm definition of super-app and thus it
should be arbitrary and vary from one and another. Here we define super-app to be an app or
platform by which provide all customer’ needs (one stop solution in a platform). A super app must
convey a set of products/services portfolio from basic to additional which related to experience and
entertainment needs. Based on our assessment, GOTO is by far a company which resembles a super-
app. The detail about our super-app framework can be seen as follow:
Exhibit 5. GOTO by far has met MNCS super-app model framework given its comprehensive products/services offering that meet
customers’ needs along their journey and experiences
Availability in GOTO's Platform
Type of Consumer Needs Notes
On-Demand E-commerce GoTo Financial
Consumption Needs
Food-Delivery ✓ gofood is a food-delivery service within Gojek app with 1.4mn merchants (99% are MSME)
Food-Purchase ✓ Tokopedia facilitate consumers to buy food & ingredients from its merchants which offer a wide-range of product (19 product category)
Shoping Experiences
Electronics ✓ Tokopedia platform offers a wide-range of electronics product from audio, camera, HP and PC/laptop
Kitchen-related ✓ Consumers can purchase a kitchen-related product such as food-processing to storage apparatus in Tokopedia platform
Fashion & Clothing ✓ All fashion styles (kids, male & female wear) are available in the Tokopedia platform
Mom & Kids ✓ Mom & kids care are also available in the Tokopedia platform
Health & Medical ✓ ✓ Health and medical products can be accessed either from Gojek or Tokopedia depends on consumer needs
Basic Stationary ✓ Consumers can buy office & stationery products from Tokopedia
Automotive ✓ Accessories & sparepart are available on Tokopedia
Carpentry & Appliances ✓ Consumer can easily find and buy carpentry and appliances from Tokopedia
Property ✓ Tokopedia also provides property services such as booking fee, full payment property and property rent
Mobility ✓ Through Gojek app, user can access 2/4-wheeler ride hailing services (goride, gocar, gobluebird, and now gotransit)
Logistics ✓ To facilitate goods mobility, Gojek also provide gosend (a more limited size of goods) and gobox (larger size of goods/freight)
Payment/transactional ✓ ✓ Tokopedia also facilitate bill payments (electricity, gas, internet, etc)
Payment tools/solution ✓ ✓ ✓ GoPay is embedded within Gojek and Tokopedia platform, while for merchant GoTo Financials provide Midtrans (gateway) and Moka (POS)
Financing needs ✓ ✓ ✓ GoPaylater is embedded within Gojek app, while GoPaylater Cicil is a BNPL product for selected Tokopedia users
Financial protection ✓ Insurance-related products (health, life, gadget, travel and disaster) are available
Knowledge-Based
Books ✓ To accommodate customers needs for knowledge, Tokopedia also provide books and magazines
Entertainment-Based
Film & Music ✓ ✓ GoTix & Goplay from Gojek and this service is also provided by Tokopedia
Gaming ✓ Gaming products (console, mobile, VR) and accessories are available in Tokopedia
Party & Craft ✓ All parties need and craft can be found and purchased from Tokopedia
Additional/Advance Wedding ✓ A comprehensive wedding needs (from fashion, souvenir, WO, planning & stylist) are offered by Tokopedia
Lifestyle-Centric
Beauty & Personal Care ✓ A comprehensive offering of beuaty & personal care products are provided in Tokopedia platform
Pet Care ✓ Grooming and care products for customers needs are also available on Tokopedia platform
Tour & Travel ✓ Tokopedia provides travel document, tour package, international sim card & wifi, ticket & voucher travel
Investment
Gold ✓ Investors can now buy Gold from Tokopedia
GOTO follows a commission-based revenue model like other digital startups

As a platform, GOTO measures the transactions metric with terms of Gross Transaction Value (GTV),
which then company can collect revenue based on commission charged to consumers, merchants
and drivers. The percentage of commission charge from the transaction within the platform is then
recorded as a take rate, and the nominal value is GOTO’s gross revenue. After subtracting to
promotion, GOTO report this as a net revenue. Like any other startups, GOTO prefer Contribution
Margin (CM) and adjusted EBITDA as a profitability metrics. CM is calculated by subtracting variable
cost to sales, while adjusted EBITDA comes from any adjustment to impairment and other financial
instrument.

Exhibit 6. Understanding the business model (how GOTO makes money)

Promotion
Promo that customers
received from GOTO
451,476 16,630 Cost
Cost of revenue plus a
portion of sales &
Take Rate marketing expenses
(% GTV) 7,969
(8,661)
EBITDA Adjusted EBITDA
Net Revenue
Gross Revenue
A net revenue
(Take Rate)
collected on the (13,715) (5,746)
A commission received by
platform
the platform from
16,630 customers, merchants & 6,401
Contribution Margin
drivers (CM) (12,671)
Gross Transaction Value Gross Revenue (13,326) (19,072)

(GTV) (Take Rate) Expenses
Adjustment
(+ impairment + other
Total value of what is sold on A commission received by the non-variable expenses adjustment from
the platform platform from customers, (a portion of sales & financial instrument +
marketing + G&A + SBC)
merchants & drivers operational support +
product development
Notes : data as of 9M22. Sources : Company, MNCS Research

The Promise : Fast-Tracking Profitability

GOTO operates like a widely-known startups. It focuses more on growth and scalability rather than
profit on its exponential phase. In order to scale up, GOTO relies on burning money to attract
customers. As a result, company borne a huge loss throughout its existence. Nevertheless, as GOTO
embarked the second-year after its establishment (since merger) and more than decade of
operation, the company orients itself to accelerate the profitability. To fast-track the profitability,
GOTO has set 3 main strategies namely : 1) increasing monetization; 2) aggressive cost cutting
measures and 3) innovative product and ecosystem integration.
Exhibit 7. GOTO’s radical profit formula
Increase Cost Ecosystem

Monetization Optimization Integration
Increase monetization
Take rate is a commonly used metric to depict how much money a platform provider company like
GOTO generate revenues. It simply indicates the commission fee company can collect from
customers, merchants and driver partners. GOTO is so far having the largest digital ecosystem in
Indonesia compared to its closest competitors such as Grab and Sea. As of 3Q22, GOTO’s GTV was
USD10.8bn, the second largest after Sea (Shopee), nonetheless, GOTO’s net take rate (net
revenue/GTV) was the lowest as it only accounted 2.8% from GTV (Grab 7.5%; Shopee 9.9%).
Exhibit 8. Currently, GOTO’s ecosystem monetization still lag behind its closest competitors
GM V/GTV Net revenue
19,100
% to GMV
Gross revenue :
N/A
Promotion : N/A
Net revenue : 10,755
9.9%
% to GTV
Gross revenue : % to GMV
3.7% Gross revenue :
Promotion : 0.9% 17.3%
Net revenue : 2.8% 5,080 Promotion : 9.8%
Net revenue : 7.5%
1,900
299 382
Se a GoT o Gra b
Notes : as of 3Q22 and the values are the total of its business segments. Sources : Company, Grab, Sea, MNCS
Research

Current Condition
When looking at each GOTO’s business segment, the take rate differed significantly with the on-
demand services (Gojek) has the highest and fintech business became the lowest. The on-demand
GTV has risen 31.9% YoY in 9M22 and at the same time, on-demand’s GTV increased by +160 bps
YoY to 21.6%. Gojek successfully managed to increase the take rate on average by +50 bps QoQ
since 1Q21-3Q22. On the other hand, Tokopedia (e-commerce) take rate increased cumulatively +70
bps during 1Q21-3Q22 or averaging +10 bps in every quarter along with its GTV growth reaching
+20.7% YoY in 9M22. Yet the fastest growing fintech business, unfortunately experiencing a decline
on its monetization at the same time. As such, overall GOTO’s take rate was steady at 3.7%. We think
GOTO’s will focus to further increase take rate in e-commerce and fintech business given its large
contribution to group’s GTV.
Exhibit 9. Quarterly GTV growth moderation post economic activities pick-up after Covid-19
On-demand E-c ommerce Fintech GOTO

35.0%
30.0%
25.0%
20.0%
QoQ GTV growth
15.0%
10.0%
5.0%
0.0%
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
-5.0%
-10.0%
Exhibit 10. Quarterly GTV growth moderation post economic activities pick-up after Covid-19
E-commerce On-demand
3.5% +70 bps 23.5% +300 bps
3.2% 22.2%
22.0%
3.0%
20.5%
2.5% 2.5%
19.0% 19.2%
2.0% 17.5%
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
Fintech
GOTO
0.7% -20 bps
4.0% +20 bps
0.6%
3.8%
0.6%
3.7%
3.6% 3.5%
0.5%
3.4%
0.4%
0.4% 3.2%
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22

A Closer Look at Take Rate Improvement

• On-demand increase in monetization driven by 8% tariff adjustment (in-line with industry),
furthermore Gojek has charged a platform fee to customers from IDR1,000-3,500 based on
distance.
• E-commerce platform also introduced a platform fee to customers charged at IDR1,000 later on
August 2022. Furthermore, Tokopedia also implemented a new commission scheme in 1Q22 with
150-200 bps higher.
• Fintech business growth driven by GoPayLater user penetration, yet unlike the other business
segments, the fintech monetization turned out to be the slowest both in-terms of nominal value
growth and take rate improvement. Despite having Compounded Quarterly Growth Rate (CQGR)
of 9.3% (1Q21-3Q22), substantial fintech GTV growth could offset its monetization effort and
resulting in a lower take rate.
• Group revenue optimization was also reinforced through promotion/customer incentives
rationalization. GOTO has undertaken promotion cut from 3.0% GTV in 4Q21 to only 0.8% GTV in
3Q22 bringing the net take rates to 2.8% in 3Q22 from 0.8% in 4Q21.
• New royalty program roll-out. GOTO’s key success factor in delivering promotion cost-saving
approach was GoPay Coins roll-out and adoption, as company’s reward currency has enabled
GOTO to increase cross platform users.
Exhibit 11. GOTO’s fintech business turned out to be the lowest monetized segment
Future Outlook Sustaining High Quality Growth with a More Rational Cost
We projected GTV to grow +22.1% CAGR FY20-25F and likely to experience a moderation from
FY23F onwards. GOTO has stated to focus on its loyal customers rather than continuously burning
money to attract more customers. Gross take rate is likely to increase +30 bps annually under our
base assumption. Furthermore, we expect GOTO to continue to revamp its customers engagement
policy by leveraging data analytics and focus more on cost cutting enabled by continued penetration
of GoPay Coins across platform. Hence, this would result in promotion/GTV cut by at least to a half
causing promotion/GTV to be 1.0% by FY25F and bringing gross revenue/net revenue conversion to
78% by FY25F from only ~50% in FY22E based on our base-scenario.

Exhibit 12. GOTO’s GTV is estimated to grow +22.1% CAGR FY20-25F
1,000,000 CAGR +22.1%
850,000
700,000
550,000
400,000
250,000
100,000
FY20 FY21 FY22E FY23F FY24F FY25F
Exhibit 13. GOTO’s Take Rate is Estimated to Increase at Least 30 bps Annually
Gross Take R ate Net Take R ate Promo /GTV
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Exhibit 14. GOTO gross/net revenue is projected to grow at +28.0%/56.8% CAGR FY20-25F
77.5%
42,500 Gross Revenue

Net revenue 70.0%
37,500
60.0%
32,500
27,500 49.7%
22,500 26.7%
17,500
28.1%
12,500
7,500
2,500

Key Enabler : Customers Stickiness

We think what can sustain GOTO’s ecosystem growth going forward relies on its customers
stickiness. Based on our observation in the last 2 years, Grab for instance as one of its closest
competitor spends more promotion on average accounting to 6.4% of its platform size (1Q21-3Q22),
whereas GOTO only spends only 2.2% of its platform size for promotion during the same period.
Both, GOTO and Grab have rationalized promotion cost in 2022.
Throughout 9M22, GOTO’s promotion to platform size has declined by -220 bps, while Grab
experienced a sharper drop of -270 bps. However, Grab’s platform size/ATU fell 2.2% at the same
time giving a stark contrast to GOTO’s platform size/ATU (Annual Transacting Users) increased by
15.4%. Indeed, in order to give an apple-to-apple benchmark is quite tricky as we also need to
consider that Grab operation rely on deliveries, mobility and fintech, whilst GOTO has a more
comprehensive portfolio with the existence of e-commerce business. Yet, given GOTO’s unrivaled
ecosystem completeness should benefit the company to lever it for further monetization, even
compared to Sea which compete in e-commerce universe. By having a comprehensive portfolio
across its digital ecosystem, we believe GOTO is far better in maintaining customers stickiness.
Exhibit 15. Comprehensive Portfolio should Benefit GOTO’s Customers Loyalty and Thus
Sustaining a High-Quality Growth with A More Rational Promotion Cost
GOTO Grab
Period Platform size/users Promotion (% Platform size/users Promotion (%
(IDR mn) platform size) (USD) platform size)
1Q21 6.6 1.2% 130.1 5.1%
2Q21 7.0 2.4% 133.3 6.3%
3Q21 8.0 2.5% 155.9 6.7%
4Q21 7.8 3.0% 152.1 8.1%
1Q22 7.8 2.7% 155.5 7.2%
2Q22 8.0 2.4% 155.1 6.2%
3Q22 9.0 0.8% 151.6 5.5%
Notes : platform size refers to GMV/GTV by which company reported, while users indicates transacting users of
platform. Sources : GOTO, Grab, MNCS Research
Cost Optimization
GOTO aspiration to build a lean, agile and productive organization is also tightly linked to its
operational efficiency. In Nov-22, GOTO followed an opex cost optimization approach mainly
through downsizing its headcount. According to the available information, company’s measure
impacted 1,300 employees. This measure continues in Mar-23 which is said to impact 600
roles/employees. Based on 9M22 financial report, GOTO spent IDR11.3tn for salaries and employee
benefits that accounted 39.7% of direct cost linked to company’s operation. GOTO’s total headcounts
was 10,541 as of Sep-22 meaning that GOTO’s expense for salaries and employee benefits was
IDR119mn/month. Yet, one should be noted that some of employee benefit is share-based
compensation (SBC) and could not be treated as a cash paid to employee. Thus, we believe using
operating cash flow to employee to better reflect cash spent for its talents which based on our
calculation GOTO paid employees averagely IDR48mn/month. Taking into account the downsizing
headcount measures in Nov-22 and Mar-23, we expect GOTO could save IDR91bn/month or
IDR274bn/quarter and IDR1.1tn/year. Note that this is not include pay severance, which could lead a
result to be more conservative, yet still have sizeable impact on company’s operating cash flow.
Exhibit 16. GOTO could save IDR3.3tn annually after downsizing its headcount.
FY20 FY21 9M22
Operating cash to employee 2,633 4,097 4,558
Employee opex 3,647 8,734 11,288
Non-cash 1,014 4,637 6,731
No of employee 4,895 9,044 10,541
Cash cost (full) 538 453 432

Cash cost (monthly) 45 38 48
Headcount reduction phase I 1,300

Headcount reduction phase II 600
Total reduction 1,900
Cost-saving/month 91
Cost-saving/quarter 274
Cost-saving/year 1,096
Notes : cash cost in full and monthly are in IDR mn, while others are in IDR bn except for number of headcounts.

Product-Based Ecosystem Integration

The third strategy to accelerate profitability is ecosystem product growth. We have observed several
product initiatives to acquire new customers, customers portfolio expansion and higher margin
business which we believe could sustain high quality growth going forward. In e-commerce segment,
Tokopedia launched ‘Dilayani Tokopedia’ as a logistic fulfillment. In on-demand services, Gojek
introduced GoTransit, GoCar luxe and GoCorp aiming to provide mobility solution for customers and
in fintech business GOTO has GoPayLater and GoPayLater Cicil. Those products initiatives are
summed up below.
Exhibit 17. GOTO’s Ecosystem Product Growth and Its Impact

Impact to
Product Initiatives Description customers/merchants Impact to GOTO
For merchants : easy way to

expand business as it provide
A hyperlocal logistic fulfillment
reception, packaging to A more loyal customers due to
E-commerce
through Tokopedia’s smart

delivery offering a cost-saving increase in satisfaction,
warehouse located in Jakarta, approach merchants business growth
Bandung, Surabaya, Makassar,
will also have a positive
Palembang & Medan For customers : quicker impacts on GOTO’s ecosystem
delivery, high quality services
that could increase satisfaction
A collaboration of Gojek with Better customers experience Fostering customers base

PT KCI to provide first-last and solution for better expansion as well as stickiness
mile customers mobility customers mobility to use the platform
A premium taxi services Gocar luxe could increase

Gocar luxe gives a premium
On-demand
launched by Gojek in Dec-22 GOTO monetization

services and experiences to
and already rolled-out in particularly in on-demand
customers
Jakarta services
GoCorp help corporate clients
Services offered by Gojek for to solve their needs to support Expanding Gojek customers
corporate clients to help base benefitting from a huge
employees mobility and
improve their employees transportation in an easiest needs in the corporate
mobility way segment
GoPayLater is payment Alternative payment solution Expanding customers base

solution (post-paid) for for customers and better benefitting from a high
selected customers customers experience and transaction needs and
platform engagement platform GTV
Fintech
GoPayLater Cicil is payment Alternative payment solution A high margin fintech business
solution (post-paid) for for customers and better that could increase not only
selected Tokopedia customers customers experience and GTV but also revenue
platform engagement
What We Find Interesting from GOTO’s Ecosystem Product Growth ? (BNPL)

Given its vast digital ecosystem size, GOTO aims to go beyond product growth. The company also try
to step in Buy Now Pay Later (BNPL) product through GoPayLater Cicil in collaboration with Bank
Jago (ARTO IJ) which could offer higher margin. Unlike the existing product of GoPayLater, this BNPL
is offered to selected Tokopedia’s customers. Furthermore, GoPayLater Cicil also has some basic
characteristics that differ from GoPayLater.

Exhibit 18. GOTO’s Ecosystem Product Growth and Its Impact

GoPayLater Cicil GoPayLater
Maximum limit up to IDR15mn IDR3mn
Payment scheme Based on tenure end of month
Cost vary based on maturity
1 month : 2.00%
Cost 3 months : 3.58% applicable if used
6 months : 3.42%
12 months : 3.33%
Accessible on Tokopedia Gojek and other partners
Bill payment through Tokopedia through Gojek
Customers could convert their payment from cash to periodic installment charged with 2.0-3.3% fee
based on tenure chosen. The scheme for BNPL could be achieved through credit channeling and
GOTO will record a net revenue after deducting from Cost of Fund (CoF) and Cost of Credit (CoC).
We believe that GoPayLater Cicil would be GOTO’s next growth engine and next game changer
driven by several reasons :
• Sizeable Tokopedia users. Based on our discussion with management, currently there are ~4mn
customers eligible to access this product.
• Higher average order value (AOV). Tokopedia is by far also known for its association with
electronic product leading to higher AOV and thus customers may prefer an installment payment
rather than cash given the price is quite expensive. This should open up higher probability of
BNPL adoption.
• Lending business is lucrative as it gives high margin. Lending, particularly in consumer segment
has attractive margin. OJK decided to cap fintech lending interest rates at 0.4% for short-term
maturity.
• A close relation with prominent digital bank in Indonesia. As we know, GOTO has 21.4% stake in
Bank Jago (ARTO IJ), a leading and already profitable digital bank in Indonesia. Despite the
cooperation is not exclusive, yet, nurturing collaboration between two entities is worth the effort.
• Data driven decision-making to be core risk management strategy. Every transaction in GOTO’s
platform will generate customers data that could be empowered through analytic approach and
brings business insights on customers behavior such as preference. This could also be employed
to generate a credit scoring that will optimize risk-adjusted return for credit portfolio.
Assuming that blended BNPL portfolio has 35% gross annual interest rates, with CoF of 5%, LDR
100% and CoC at 5%, the risk adjusted NIM for GoPayLater Cicil would be 25%. It is indeed
promising, such a margin is even higher than current on-demand gross take rate at 22% and given
huge Tokopedia GTV. In addition, we also believe CoC could be reduced if appropriate credit scoring
framework is undertaken.
Exhibit 19. We Estimate GoPayLater Cicil to Have A High Risk-Adjusted Margin

Variables
Tokopedia white-list (thousands) 4,000
Penetration 10%
GoPayLater Cicil users (thousands) 400
Gross interest rates 35%
LDR 100%
Cost of Fund (CoF) 5%
Cost of Credit (CoC) 5%
Scenario 1 Scenario 2 Scenario 3
Order value (IDR thousands) 1,000 3,000 5,000
BNPL outstanding (IDR bn) 400 1,200 2,000
Gross revenues 140 420 700
Cost component
CoF (IDR bn) (20) (60) (100)
CoC (IDR bn) (20) (60) (100)
Total Cost (40) (120) (200)
Net revenues 100 300 500
Net margin 25%

Firming Profitability Orientation through New Management

At the EGMS which was held on 6 March 2023, GOTO received approval from shareholders to
appoint new commissioners and directors. Agus Martowardojo (ex-central bankers), Patrick Walujo
(PE practitioner), Winoto Kartono (PE practitioner) and Marjorie Lao who previously had a track
record as executives in startups and global management consultants are appointed to be new
commissioner. Meanwhile, on the board of directors is Pablo Malay, a former lawyer who is
experienced in cross-border and large size corporate transactions who also help Gojek & Tokopedia
merger in 2021. Apart from that, there is also Nila Marita who is assigned to handle external affairs
and government relations who has experience in public relations for >2 decades. We see that the
new management composition can enable GOTO to be more agile and fulfill its promise to
accelerate profitability given a proven track record of new personnel. It is worth noting that Agus
Martowardojo and Patrick Walujo also have good experience in executing smooth turnaround
strategies, especially in the financial industry.
Exhibit 20. GOTO’s new face of BoC & BoD
GOTO’s new Board of Commissioner GOTO’s new Board of Directors
Garibaldi Thohir
Co-Chairman Andre Soelistyo
CEO
Agus D. W. Martowardojo
Commissioner Wei-Jye Jacky Lo
CFO
Winato Kartono
Commissioner
Pablo Malay
Dirk Van den Berghe Chief Corporate Officer
Independent Commissioner
Marjorie Lao Nila Marita

Independent Commissioner Chief External Affairs
William Tanuwijaya Catherine Hindra Sutjahyo

Co-Chairman President (On-Demand)
Patrick Sugito Walujo

Commissioner Melissa Siska Juminto
President (E-Commerce)
Wishnutama Kusubandio
Commissioner
Hans Patuwo
Robert Holmes Swan President (Fintech)
Independent Commissioner
Putting It All Together, A Radical Profit Formula is Set to Bear Fruit

GOTO’s effort in take rate improvement and cost cutting measures have been undertaken
throughout 2022. We also have seen some notable impact on its fundamental. Here are some of the
aforementioned impacts.
§ Worth-noting that some of GOTO’s opex is non-cash basis as company offers a share-based
compensation (SBC) for employees by granting an option and thus after deducting IDR6.8tn
of SBC and IDR412bn one off item, GOTO’s fixed opex as of 9M22 was IDR7.5tn. During that
period GOTO has implemented personnel related and non-related saving amounting at
>IDR1tn or equivalent to 14% saving.
§ GOTO’s adjusted EBITDA (preferred profitability metric) also increased from -4.6% GTV in
4Q21 to -2.3% GTV in 3Q22. Its monthly cash burn also decrease from IDR1.6tn in 1Q22 to
IDR1.3tn in 3Q22.
For 4Q22, we expect opex to increase due to one off items related to headcount downsizing. We also
estimate that GOTO’s net loss will likely to widen significantly as we expect company to conduct
goodwill impairment test. GOTO recorded IDR93tn goodwill on its balance sheet driven by business
combination (Gojek-Tokopedia merger). At that time Tokopedia was valued at USD8bn or equivalent
to 33.8x EV/revenue. Goodwill needs a special treatment in accounting.

Companies such as GOTO which carry a sizeable goodwill value will need to conduct periodic
impairment test. Given unfavorable macro-condition and challenging market environment in FY22,
there will be adjustment on Tokopedia value which under our estimate could result in impairment of
its value driven by lower market valuation of tech companies across the globe. Notes that peer like
Sea Group also reported a goodwill impairment of USD178mn in 4Q22. Yet this would not impact on
GOTO’s cash flow.
We believe GOTO’s profit acceleration will be observed in FY23F. Under the scenario of at least
+25bps increase in overall take rate and discipline cost saving approach positive adjusted EBITDA in
4Q23F is achievable. Expect FY24F GOTO’s adjusted EBITDA to be IDR3.4tn.
Exhibit 21. GOTO’s positive adjusted EBITDA in 4Q23F is achievable if take rate improvement
continue and company follow a discipline cost optimization approach
10,000
5,000
(5,000)
(10,000)
(15,000)
(20,000)
Notes : value in IDR bn. Sources : Company, MNCS Research
What matters more than just guidance is execution. Our model showed that for every +25bps
increase in overall take rate will improve GOTO’s adjusted EBITDA by IDR1.8tn if all else are equal
using assumption that total cost (cost of revenues + opex) at 194% of net revenue. While for every
increase of +2.5 percentage point in opex would result in IDR423bn lower of adjusted EBITDA.
Exhibit 22. Sensitivity model of take rate improvement and its impact on GOTO’s adjusted EBITDA
Sensitivity Base Scenario -75bps -50bps -25bps +25bps +50bps 75bps

GTV 709,937 709,937 709,937 709,937 709,937 709,937 709,937
Take rates 4.0% 3.2% 3.5% 3.7% 4.2% 4.5% 4.7%
Gross revenue 28,233 22,908 24,683 26,458 30,008 31,783 33,557
Promo/GTV -1.6% -1.6% -1.6% -1.6% -1.6% -1.6% -1.6%
Net revenue 16,940 11,615 13,390 15,165 18,715 20,489 22,264
EBIT (15,935) (21,259) (19,484) (17,709) (14,160) (12,385) (10,610)
Adjusted EBITDA (4,416) (9,741) (7,966) (6,191) (2,642) (867) 908
Exhibit 23. Sensitivity model of total cost under different scenario and its impact on GOTO’s adjusted EBITDA
Sensitivity Base Scenario -75bps -50bps -25bps +25bps +50bps 75bps

GTV 709,937 709,937 709,937 709,937 709,937 709,937 709,937
Net revenue 16,940 16,940 16,940 16,940 16,940 16,940 16,940
Total cost -194% -202% -199% -197% -192% -189% -187%
Total expense (32,874) (34,145) (33,721) (33,298) (32,451) (32,027) (31,604)
EBIT (15,935) (17,205) (16,782) (16,358) (15,511) (15,088) (14,664)
Adjusted EBITDA (4,416) (5,687) (5,263) (4,840) (3,993) (3,569) (3,146)
Notes: Total cost = cost of revenue + opex / net revenue. Sources : Company, MNCS Research

Answering Concern : A Closer Look at Cash (Liquidity)

Recently, the role of liquidity has become increasingly essential. The era of high interest rates that
started last year has increased liquidity risk for corporations, particularly for startups that their life
heavily rely on burning money and funding from investors. Investor appetite for startups and
technology companies has been deteriorated throughout 2022 as hostile environment lingers. The
Nasdaq Composite as a proxy for US technology stocks recorded its worst annual performance since
the 2008 GFC. Amid these conditions, startups primarily in Southeast Asia such as GOTO, Sea and
Grab change their orientation from growth to profitability. However, what has not escaped the
spotlight is the extent to which the company can fund their operation until they are able to make a
profit when liquidity in the market runs dry. We tried to do an assessment of the condition and
adequacy of the liquidity of each startups with the following results.
Compared to Sea and Grab, GOTO is generally considered to have the shortest cash runway and is
only able to support its operation for up to 7 quarters. However, looking at startup liquidity condition
needs to be carefully taken with a more comprehensive approach, especially with regard to source of
liquidity. This is important considering the cash obtained from the funding round with will have an
impact on future business performance and further funding needs. Apart from the general view that
GOTO has the shortest cash runway, we see that there are several interesting points that are worth
understanding.
• Funding history & momentum. GOTO, Sea and Grab are public companies that clearly receive
funding from the capital market. Of the three, Sea was the first to go public in the US market by
issuing ADSs and managed to raise ~USD1bn in 2017, followed by Grab, that went public Nasdaq
with the SPAC scheme at the end of 2021 and managed to raise USD4.5bn. The last was GOTO,
that undertook IPO corporate action in the domestic stock exchange and raised funding from
investors of USD1bn. Historically, Sea is one of the most active in conducting post-IPO funding
rounds. Since FY17-21 Sea has obtained additional liquidity of up to USD16bn and this is what
makes Sea Group having the thickest pocket. However, Sea is benefited due to high investors'
appetite for startups at that time. It was clearly in stark contrast to Grab and GOTO, which faced
unfavorable conditions when inflation increased followed by aggressive rate hikes causing
funding with premium valuations is less likely.
• Funding scheme. Historically, particularly since the IPO, Sea has received funding through equity
and debt financing. Of the USD16bn raised in those 5 years, 60% came from debt instruments-
convertible notes which have interest bearing characteristics offering annual interest rates of
0.25-2.375%. Unlike Sea, most of Grab's funding is in the form of equity, largely coming from IPO
through SPAC. However, in 1Q21 Grab issued USD2bn worth of non-convertible bonds and has
repurchased around USD0.85bn. On the other hand, GOTO has successfully managed funding
through equity financing and thus in our view, in the current situation, GOTO is superior. We
further conducted analysis by calculating the net cash liquidity approach (cash & cash equivalent
+ short-term investment - interest bearing liability and after excluding restricted cash). The results
showed that the three startups possess a similar cash runway. In our opinion, this metric is far
better and more credible in explaining a company's liquidity condition as funding model clearly
impact on whether cash received from funding will result in liabilities in the future.
Exhibit 24. After taking a look at net liquidity, the 3 startups (GOTO, Sea and Grab) would
have a quite similar runway.
Liquidity Comparison GOTO Sea Group Grab Holdings
Cash & cash equivalent 2.1 6.3 2.3
Short-term investment & deposits 0.0 1.0 4.1
Gross liquidity 2.1 7.3 6.4
Interest bearing liabilities 0.1 4.2 2.1
Net liquidity 2.0 3.1 4.3
Quarterly cash burn 0.3 0.5 0.3
Cash & cash equivalent runway 6.8 13.6 9.0
Gross liquidity runway 6.8 15.9 25.2
Net liquidity runway 6.5 6.7 16.9
Notes : the data as of 9M22, all values in USD bn except for runway in quarters, restricted cash is excluded and
quarterly cash burn is calculated using quarterly operating cash flow. Sources : GOTO, Grab, Sea, MNCS Research.

We further look at Sea Group as it provides funding details. In Sea's case, there will be USD575mn
convertible notes issued in 2018 maturing on July 2023 with a 2.25% coupon rate. Most of bond
holders have converted it, leaving only USD31.3 million as of FY21. Most of principal amount was
converted due to the lower conversion price than the current market price of USD19.8bn. Further in
2024 there is USD1.15bn of convertible bond maturing with a coupon rate of 1.00% p.a and most of
them have been converted to equity due to lower conversion price at USD50.1/share. However, Sea’s
convertible notes that are mature in 2026 worth of USD 2.88bn have a premium conversion price of
USD 477.1/share. Furthermore, coupled with Sea's anti-dilution policy, we see the probability for
conversion to be small and hence the liquidity space to be allocated expansion has become more
limited. After all, GOTO's ability to maximize funding through equity instruments is ultimately
superior given recent hostile environment. On top of lower interest rate risk, GOTO does not
necessarily experience earnings volatility due to changes in the fair value of the debt instruments
recorded in the P&L.
Exhibit 25. Sea Group historical funding activities FY17-21

Net proceeds from equity financ ing
Net proceeds from convertible notes financing
Financing received
7.5
6.9
6.5
5.5 2.8
4.5 4.1
USD bn
3.5 1.1
2.6
2.5
4.1
1.6 1.1
3.0
1.5
0.7
0.6 1.5
1.0
0.5 0.6
FY17 FY18 FY19 FY20 FY21
Sources : Sea, MNCS Research.
Exhibit 26. Details of Sea’s post-IPO funding round (debt-financing focus)
Convertible Notes FY17 FY18 FY19 FY20 FY21
Amount issued 675 575 1,150 1,150 2,875

Maturity 3-year Jul-23 Dec-24 Dec-25 Sep-26
Interest rates p.a 5% 2.25% 1.00% 2.38% 0.25%
Convertion price
(USD/ADS) 19.8 50.1 90.5 477.10
Market price as of
conversion
date/recent
Between May-Oct
2020 USD378.5mn
principal amount As of April 5, 2022
was exchanged with holders of
As of April 5, 2022
USD50mn cash and USD998mn
holders of
All notes are 18.5mn ADS. As of preferred to convert As of April 2022 all
USD0.5mn principal
converted to ~50mn Apr-22 holders and USD152mn the amount
Notes have elected to
ADS class A in Mar- aggregate of remains outstanding principles remain
convert and
20 USD165.2mn and the cap price set outstanding
remaining USD1.1
preferred to convert at USD70.36 per
remains outstanding
and leaving ADS in regards to
USD31.3mn anti-dilution policy
principal amount
remain outstanding

• Tapping into fintech businesses and digital banks will require startups to have more
restricted cash. As we all know, GOTO, Sea and Grab have fintech and digital banking businesses.
GOTO has a 21.4% stake in Bank Jago (ARTO). Sea Group acquired PT Bank Kesejahteraan
Ekonomi (BKE) in 2021 and Grab partnered with Emtek Group and Singtel by acquiring Bank
Fama. All of them operate in Indonesia as a promising market in the digital banking business with
a large underbanked and unbanked population. However, in Indonesia, banking sector is a
capital-intensive industry, as with OJK policies that seek to consolidate and strengthen banking
capital. In comparison, Grab turned out to be the laggard in tapping in to the digital banking
business while GOTO is a pioneer. Grab's journey to form a digital bank must go through at least
the initial phase which is costly, a portfolio clean-up phase before it turns to be digital bank. The
clean-up stage is expensive due to high probability of additional capital requirement given the
considerable losses borne during the process plus the initial investment in technology. Both Sea
Bank and Bank Fama have met the OJK capital requirements of at least IDR3tn. Yet, in contrast to
Bank Jago, Sea Bank and Bank Fama capital still relatively small and categorized as KBMI I bank. In
terms of capital size, under the scenario of OJK encouraging KBMI I banks to achieve a core
capital of IDR6tn, both Sea Bank and Bank Fama still need at least IDR3tn additional capital or in
other cases to reached the size of the already profitable Bank Jago.
After taking a careful assessment we believe that GOTO’s cash and liquidity position could not be
underestimated. Moreover, GOTO pledges to deliver positive adjusted EBITDA positive by the end of
this year indicating that GOTO could fund operation using its own cash without external funding
needs. Management also reiterated that any external funding would be opportunistic.

Valuation
We approach our valuation by separating GOTO into its three pillars of business, namely on-demand,
e-commerce, and financial technology, and assess its intrinsic value by using SOTP. For each line of
business, we use EV/revenue by comparing GOTO to its global and domestic peers as many of the
companies are pursuing towards profitability. With most of the tech companies have shifted its focus
away from growth, using GTV as a metric of valuation does not seem to be appropriate as it only
measures the size of platforms, rather than the revenue generated from the business. Back to our
model, based on our findings, we assess GOTO's EV by:
• On-Demand: We found that the segment is traded at the range 0.3x-6.3x EV/sales, yet we found
GRAB has the most similar business model, ecosystem, platform growth, and take rate with
GOTO. Therefore, we use GRAB's forward FY23F EV/sales of 3.2x for GOTO's valuation in the on-
demand segment.
Exhibit 27. GOTO’s On-Demand EV using Comparables
120 ,000
100 ,000
80, 000
60, 000
40, 000
20, 000
0
UBER US LYFT US DASH US GRAB US ZOMATO ROO LN TKWY NA DHE R GR DIDIY US 369 0 HK SE US BABA US Average Me dian
EQUITY EQUITY EQUITY EQUITY IN EQUITY EQUITY EQUITY EQUITY EQUITY EQUITY EQUITY
EQUITY
Sources : Bloomberg, MNCS Research
• E-Commerce: We found that the segment is traded at the range 0.2x-8.5x EV/sales. From the
merger of Gojek and Tokopedia in FY21, Tokopedia's valuation with EV/revenue during the period
was comparable with Shopify who had a metric of 33.9x. Currently, in our model, we give a
premium valuation for GOTO’s e-commerce segment (Tokopedia) with 14% higher than the
forward FY23F EV/revenue of 8.5x as Tokopedia's projected revenue growth is higher than
Shopify with 22.6% YoY.
Exhibit 28. GOTO’s E-Commerce EV using Comparables
100 ,000
90, 000
80, 000
70, 000
60, 000
50, 000
40, 000
30, 000
20, 000
10, 000
0
BU KA IJ BELI IJ AMZN EBAY US BABA US SHOP MELI U S JD US 475 5 JT PD D U S SE US CPNG ETSY US Average Me dian
EQUITY EQUITY US EQUITY EQUITY US EQUITY EQUITY EQUITY EQUITY EQUITY US EQUITY
EQUITY EQUITY EQUITY

• Fintech: We found that the segment is traded at the range 0.2x-21.4x EV/sales, however we
found that Sea Group has similar business model with GOTO in terms of the availability of e-
wallet, digital bank, and both recorded a significant growth in revenue in FY22E. Yet, going
forward, we expect GOTO's fintech lending to be more premium with the addition of GoPayLater
Cicil, as well as high average order value of Tokopedia, thus making GOTO's ecosystem to be
more comprehensive compared to Sea.
Exhibit 29. GOTO’s Fintech EV using Comparables
80, 000
70, 000
60, 000
50, 000
40, 000
30, 000
20, 000
10, 000
0
PY PL US SQ US MA US V US INTU US BABA US 700 H K PAY TM 475 5 JT SE US ADYEN MELI U S Average Me dian
EQUITY EQUITY EQUITY EQUITY EQUITY EQUITY EQUITY IN EQUITY EQUITY NA EQUITY
EQUITY EQUITY
In total, GOTO's implied EV/sales is recorded at 6.3x in FY23F, while in FY24F, it is recorded at 5.3x,
with ARTO included in our calculation. This valuation deemed to be more premium than its peers due
to its comprehensive portfolio, customer stickiness, and its domination in Indonesia. With the
expected net cash of IDR19.7tn in FY23F, GOTO's share price is targeted at IDR168/share (+43.6%
upside).

Key Investment Thesis: 4 Reasons We Like GOTO

Global Index Inclusion
In Feb-2023, GOTO is reported to be included into the FTSE Global Equity Index Series (GEIS) Asia
Pacific Ex-Japan Ex-China as large cap stocks, which will be effectively traded on March 20, 2023.
With the inclusion of GOTO into the index, the company is benefitted from being exposed on the
global market, which in turn increase its liquidity and foreign inflow.
Exhibit 30. GOTO’s Domestic and Foreign Ownership Before and After the Lockup Period
Domestic Retail Domestic Institution Fo reign Retail Fo reign Institution
Feb-23
Jan-23
Dec-22
Nov-22
Sources : KSEI, MNCS Research
Liquidity
GOTO's liquidity has been affected by the lock up period imposed on some of its pre-IPO
shareholders. From the prospectus, GOTO has two classes of shares: series A and series B, where up
to Dec-2022, these shares can be traded freely in the secondary market. Therefore, after the lockup
period expired, GOTO's free float rose to 60.7% free float (vs 4.4% during IPO), thus increasing the
liquidity, as seen in graph below. This increased of liquidity can act as a positive catalyst for the
company as GOTO becomes top 10 most actively traded stocks in the JCI.
Exhibit 31. GOTO’s Average Trading Volume Shows that the Stock is Actively Traded On Dec-
22 after the Expiration of the Lockup Period
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Apr-22 May-22 Jun-22 Jul-22 Aug -22 Sep-22 Oc t-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23
Sources : Refinitiv, MNCS Research

Proxy of Indonesia’s Digital Economy

According to a research report by Google, Temasek, Bain & Company in FY22, Indonesia's digital
economy is expected to grow with CAGR of 19% from FY22-FY25F to USD130bn, the highest in the
Southeast Asia, which is driven primarily by the e-commerce, which contributes 73.1%. Moreover,
Indonesia also recorded a high adoption rate of e-commerce, transport, and food delivery in FY22
with >75%, and with the shift of behavior of the consumers, the rate is expected to rise further in the
future. Additionally, the growth of digital financial services is also expected to grow up to FY25F, with
digital payments showing a CAGR of 17%. As a result, the growth of the digital economy benefits
GOTO as the company being the proxy for the country's digital economy with its sheer size and
comprehensive ecosystem, which will benefit GOTO going forward. Moreover, according to the
research, 48% of Indonesians willing to pay more for a sustainable service or products, thus
benefiting GOTO in the long run from the increase of take rate going forward.
Exhibit 32. On-Demand Segment Market Size GTV (USD bn)
CAGR FY20-FY25F:
50 Indonesia: 27.2%
Southeast Asia: 26.2%
Indonesia
40
Southeast Asia
30
20
10
0
FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23F FY24F FY25F
Sources : Redseer, MNCS Research
Exhibit 33. E-Commerce Segment Market Size GTV (USD bn)
300
CAGR FY20-FY25F:
Indonesia: 25.3%
250 Southeast Asia: 26.6%
Indonesia
200 Southeast Asia
150
100
50
0
Exhibit 34. Fintech Segment Market Size GTV (USD bn)
160 CAGR FY20-FY25F:

140 Indonesia: 31.5%
Southeast Asia: 26.6%
Indonesia
120
100 Southeast Asia
80
60
40
20
0

The Most Complete Digital Ecosystem

GOTO has the most comprehensive digital ecosystem in Indonesia through its on-demand, e-
commerce, and fintech segments.
• On-demand: This segment has the biggest take rate compared to other segments with 21.6% in
FY22E, which implies the highest gross profit contributor, thus resulting in a positive contribution
margin. Moreover, with the economic recovery post pandemic, GOTO's GoCorp and GoTransit is
expected to contribute significantly, while GoFood reported its customer loyalty proportion
increased from 38% to 52%.
• E-Commerce: According to data by SimilarWeb, Tokopedia achieved the highest data traffic in
Indonesia compared to other e-commerce platforms with average monthly visit reaching 158.3mn
in 6M22. With the e-commerce segment in Indonesia projected to grow at CAGR of 17% up to
FY25F, Tokopedia is expected to further grow, considering that the platform is the market leader
in the segment and becomes a proxy for the e-commerce market in Indonesia. Moreover, the
addition of GoPayLater Cicil into Tokopedia can potentially increase total transaction in the
platform and further improve customer loyalty.
• Fintech: In the segment, the integration of Gopay to Gojek and Tokopedia has increased GOTO's
user penetration to new highs in 9M22, indicating more users are making payments through
GoPay. Specifically, in 3Q22, GoPay user penetration in Tokopedia went up from 52% to 58%,
while in Gojek, it increased from 55% to 60%. In the meantime, GTV per GoPay user recorded a
rise of 47%, implying more spending and frequent using GoPay.
Meanwhile, comparing with its peers, Sea Group and Grab, GOTO has more comprehensive
ecosystem as Sea Group relies mostly on its e-commerce platform, Shopee, contributing 58.9% of its
total GAAP revenue in FY22. On the other hand, Grab depends heavily on its mobility and deliveries
segments, where they contributed 90.9% of the total revenue. Additionally, GOTO's 21.4% ownership
of ARTO further compliments GOTO's services in the digital bank segment.

Thinking About Risk

We identify a macro & micro risks for GOTO. First, from macro perspective, given current challenging
macro backdrop, markets and investors would demand a more rational and somewhat a cheaper
valuation for growth companies like tech startups. Therefore, this also open up possibility for
valuation de-rating. By taking a look at GOTO stock price movement since IPO, we could see how
global macro factors has imposed a systematic risk to domestic tech stock like GOTO. Since the
debut, GOTO stock price in the secondary market fluctuated a lot with the highest closing price at
IDR404/share and the lowest of IDR82/share. And as of 1 March 2023, GOTO’s stock price was closed
at IDR122/share reflecting -64% from the IPO price. GOTO’s share price drawdown was triggered by
unfavorable interest rate hike that demand a more rational growth-stock companies’ valuation which
reflected a systematic risk and also partially driven by irrational market behavior particularly during
post lock-up expiry period. Yet, since the beginning of 2023, the share price uptrend was also
attributable to Nasdaq & Hang Seng rebound from the worst performance as well as company’s
maneuver to fast-track profitability.
Exhibit 35. GOTO price movement since IPO
450
A month later GOTO stock prices rebounded sharply by +108.2% from
the previous low reaching IDR404/share
400
GOTO share price continued to decline

350 as Fed’s monetary stance to a hawkish
300
250
200 A massive sell off jittered by

lock-up expiry during
A month after the debut, GOTO unfavorable macro
150 stock price dropped 42.6% hitting
IDR194/share before finding a
support
100
50
Apr-22 Jun-22 Aug -22 Oc t-22 Dec-22 Feb-23
Another macro risk that we closely monitor is the development of SVB collapse due to liquidity and
solvency problems. SVB is recognized as startups banks which unlike other banks that raise funding
from traditional retailers, its balance sheet is dominated by institutional and VC funds from its
USD177bn funding. On the other hand, SVB also recorded a huge losses on securities investment
(~USD17bn as of 4Q22). SVB bank run and regulator’s closure cause market volatility. We believe the
contagion risk to Asia and Indonesia is likely to be minimal as domestic banking sector remains
healthy characterized by strong CAR (~25%) and high CASA ratio from retail funding invested in loan
and a more resilient bond market supported by monetary & fiscal authority stabilization policy. Yet,
SVB collapse impact on startups could not be underestimated as some of VC funds having a liquidity
problem. Given such a circumstance, startups may experience a significant funding squeeze and they
need to think carefully on liquidity management by focusing on investment/project that could
generate cash flow to reduce external funding dependence. As such we also think that investors are
likely demanding a lower valuation for growth companies and tech startups. Again, this should result
in the possibility of de-rating.
On the other side, we also believe that key risk for GOTO is on fundamental side. Slower than
expected execution to increase monetization particularly on a high margin business such as lending
may trigger GOTO’s valuation de-rating. We have performed an assessment of GOTO’s valuation
sensitivity that tightly linked to its monetization under different scenario of systematic risk and
strategy execution.

Exhibit 36. Sensitivity model of take rate and valuation multiple and its impact on GOTO’s
target price
Valuation Multiple FY23F
-20% -10% Base +10% +20%
-20bps 131 146 160 174 189
Take Rate
-10bps 134 149 164 179 193
Base 137 153 168 183 198
+10bps 141 156 171 187 202
+20bps 144 159 175 191 207
As mentioned before, take rate affects GOTO’s ability to generate sales, meaning that the higher the
take rate is, the higher the sales after each transaction, hence accelerating the company’s path
towards profitability. Valuation multiple or the EV/sales also plays a significant role in determining
the company’s target price as the higher the ratio is, the more people are willing to pay premium for
the company’s future growth prospect. As seen in the table above, the lower the take rate and the
valuation multiple, the lower the target price is, implying that the company is seen to have limited
growth prospect. In the take rate, we use the base case at 4.0%, while in the valuation multiple, the
base case is set at 6.3x. When the take rate is lower by 20bps while its valuation multiple is kept
lower by 20%, the target price for GOTO is at IDR131/share. Meanwhile, when the take rate is
increased by +20bps from the base case with EV/sales greater by 20%, the target price is higher at
IDR207/share (58.0% disparity).

Exhibit 37. Financial Projections
Income Statement FY20 FY21 FY22E FY23F FY24F

Net revenue 3,328 4,536 11,415 16,940 23,806
Gross profit 889 760 6,161 12,009 19,010
EBIT (10,167) (22,385) (25,737) (15,935) (8,169)
D&A expense (1,247) (2,417) (2,548) (2,966) (3,246)
EBITDA (8,919) (19,968) (23,189) (12,968) (4,923)
Adjusted EBITDA (13,016) (16,208) (14,410) (4,416) 3,387
Net finance income/(expense) 26 60 353 143 146
Other income/(expense) (10,875) 265 (19,128) (1,522) (1,501)
Pre-tax income/(loss) (16,789) (22,211) (44,512) (17,314) (9,525)
Minority interest (2,527) (1,038) (2,062) (804) (446)
Attributable net income/(loss) (14,209) (21,391) (42,479) (16,574) (9,183)
Balance Sheet FY20 FY21 FY22E FY23F FY24F

Cash & cash equivalent 15,319 31,151 28,554 23,002 25,638
Receivables 275 507 755 851 1,025
Inventory 42 34 59 57 52
Other current 3,890 4,371 4,130 4,251 3,779
Total current 19,526 36,064 33,498 28,161 30,494
Fixed assets 827 1,470 1,470 1,440 1,471

Investments 4,852 10,655 12,559 12,559 12,559
Intangible 3,382 106,427 84,186 82,246 80,305
Other non-current 1,522 521 1,021 1,272 1,147
Total assets 30,109 155,137 132,736 125,679 125,976
Payables 640 867 1,240 828 1,643

Short-terms borrowings 738 1,452 1,545 1,545 1,545
Other short-term 4,386 9,974 10,575 12,041 12,363
Short-term liabilities 5,764 12,294 13,360 14,414 15,551
Long-term payables 1,816 776 929 906 926

Other long-term liabilities 1,729 3,043 2,880 2,746 2,845
Long-term liabilities 3,545 3,819 3,809 3,652 3,771
Total liabilities 9,309 16,113 17,169 18,066 19,322
Share capital 692 1,144 1,184 1,184 1,184

Additional paid-in 63,281 225,852 239,907 239,907 239,907
Retained earnings (57,740) (79,129) (121,608) (138,181) (147,364)
Others 13,882 (7,550) (2,530) 6,317 14,527
Minority interest 683 (1,292) (1,387) (1,614) (1,600)
Shareholders equity 20,799 139,024 115,567 107,613 106,654

Page 2
Cash Flow FY20 FY21 FY22E FY23F FY24F

EBITDA (8,919) (19,968) (23,189) (12,968) (4,923)
Working capital change 582 3 100 (507) 646
Net finance & tax (28) 278 382 208 249
Other operating flow 1,004 5,432 601 1,310 166
CF from operation (7,361) (14,691) (22,105) (11,957) (3,861)
Capex (1,430) (1,304) (582) (996) (1,059)

Other investing (3,876) (89,946) (1,904) - -
CF from investing (5,305) (91,251) (2,486) (996) (1,059)
Debt changes 1,722 (812) 93 - -

Equity changes 2,594 168,578 22,364 8,309 8,309
Other financing 19,471 (46,235) (462) (908) (753)
CF from Financing 23,787 121,531 21,994 7,402 7,556
Cash at the beginning 6,104 15,319 31,151 28,554 23,002

Net change 9,215 15,831 (2,597) (5,552) 2,636
Cash at the end 15,319 31,151 28,554 23,002 25,638
Financial Metrics FY20 FY21 FY22E FY23F FY24F

Growth (YoY)
GTV -1.6% 39.8% 32.8% 15.8% 14.9%
Gross revenue 13.8% 43.5% 35.0% 22.9% 20.5%
Net revenue 44.4% 36.3% 151.7% 48.4% 40.5%
EBIT loss -51.6% 120.2% 15.0% -38.1% -48.7%
EBITDA loss -55.5% 123.9% 16.1% -44.1% -62.0%
Net loss -37.6% 50.5% 98.6% -61.0% -44.6%
Profitability (%)
Gross profit margin 26.7% 16.8% 54.0% 70.9% 79.9%
EBIT margin -305.5% -493.5% -225.5% -94.1% -34.3%
EBITDA margin -268.0% -440.2% -203.1% -76.6% -20.7%
Net profit margin -427.0% -471.6% -372.1% -97.8% -38.6%
Leverage (x)
Debt/Equity 0.1 0.0 0.0 0.0 0.0
Debt/Asset 0.1 0.0 0.0 0.0 0.0
Debt/EBITDA (0.3) (0.1) (0.1) (0.2) (0.5)
Net gearing (0.6) (0.2) (0.2) (0.2) (0.2)
Valuation (x)
P/GTV 0.4 0.3 0.2 0.2 0.2
P/sales 43.1 31.6 12.6 8.5 6.0
P/B 6.9 1.0 1.2 1.3 1.3
EV/GTV 0.4 0.3 0.2 0.2 0.1
EV/revenue(gross) 10.3 7.2 5.3 4.3 3.6
EV/revenue(net) 36.6 26.9 10.7 7.2 5.1

Page 2
MNC Research Industry Ratings Guidance

OVERWEIGHT: Stock's total return is estimated to be above the average total
return of our industry coverage universe over next 6-12 months
NEUTRAL: Stock's total return is estimated to be in line with the average total
UNDERWEIGHT: Stock's total return is estimated to be below the average total
MNC Research Investment Ratings Guidance

BUY : Share price may exceed 10% over the next 12 months
HOLD : Share price may fall within the range of +/- 10% of the next 12 months
SELL : Share price may fall by more than 10% over the next 12 months
Not Rated : Stock is not within regular research coverage
PT MNC SEKURITAS
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Jl. Kebon Sirih No. 21 - 27, Jakarta Pusat 10340
Telp : (021) 2980 3111
Fax : (021) 3983 6899
Call Center : 1500 899
Disclaimer
This research report has been issued by PT MNC Sekuritas, It may not be reproduced or further distributed or published, in whole or in
part, for any purpose. PT MNC Sekuritas has based this document on information obtained from sources it believes to be reliable but
which it has not independently verified; PT MNC Sekuritas makes no guarantee, representation or warranty and accepts no responsibility
to liability as to its accuracy or completeness. Expression of opinion herein are those of the research department only and are subject to
change without notice. This document is not and should not be construed as an offer or the solicitation of an offer to purchase or
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Page 44
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MNCS INITIATE REPORT

MNC Sekuritas Research Division | March 17, 2023

PT GoTo Gojek Tokopedia Tbk (GOTO IJ)

Initiate Coverage on GOTO IJ with a BUY call; TP: IDR168

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 1

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 2

Exhibit 1. GOTO group structure

Sources : Company, MNCS Research

Gojek – the on-demand arm of GOTO

Exhibit 2. Notable on-demand services portfolio

Sources : Company, MNCS Research

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 3

Tokopedia – the e-commerce arm of GOTO

Exhibit 3. Notable e-commerce services portfolio

GoTo Financial – the fintech arm of GOTO

Exhibit 4. Notable fintech services portfolio

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 4

Sources : Company, MNCS Research

GOTO follows a commission-based revenue model like other digital startups

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 5

Exhibit 6. Understanding the business model (how GOTO makes money)

Gross Transaction Value Gross Revenue (13,326) (19,072)

Notes : data as of 9M22. Sources : Company, MNCS Research

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 6

The Promise : Fast-Tracking Profitability

Exhibit 7. GOTO’s radical profit formula

Increase Cost Ecosystem

Sources : Company, MNCS Research

GM V/GTV Net revenue

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 7

On-demand E-c ommerce Fintech GOTO

Sources : Company, MNCS Research

Sources : Company, MNCS Research

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 8

A Closer Look at Take Rate Improvement

Sources : Company, MNCS Research

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 9

Exhibit 12. GOTO’s GTV is estimated to grow +22.1% CAGR FY20-25F

1,000,000 CAGR +22.1%

Sources : Company, MNCS Research

Gross Take R ate Net Take R ate Promo /GTV

42,500 Gross Revenue

Sources : Company, MNCS Research

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 10

Key Enabler : Customers Stickiness

Cash cost (full) 538 453 432

Headcount reduction phase I 1,300

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 11

Product-Based Ecosystem Integration

Exhibit 17. GOTO’s Ecosystem Product Growth and Its Impact

For merchants : easy way to

through Tokopedia’s smart

A collaboration of Gojek with Better customers experience Fostering customers base

A premium taxi services Gocar luxe could increase

launched by Gojek in Dec-22 GOTO monetization

GoPayLater is payment Alternative payment solution Expanding customers base

Sources : Company, MNCS Research

What We Find Interesting from GOTO’s Ecosystem Product Growth ? (BNPL)

www.mncsekuritas.id MNC Sekuritas 1-500-899 [email protected] Page 12