Grab’s Singapore, Malaysia businesses worth more than share price: DBS
However, Macquarie Equity Research takes a more cautious view, lowering its target price by 8%
[SINGAPORE] Grab’s businesses in Singapore and Malaysia alone are worth more than its current share price, said DBS Group Research. The research house believes the ride-hailing and food delivery group’s recent share-price weakness may be overdone.
In a research report on Tuesday (Nov 3) following Grab’s third-quarter results, DBS estimated that its Singapore and Malaysia operations are worth about US$3.07 a share, around 6 per cent above its share price of about US$2.90.
This valuation assigns no value to its businesses in Indonesia, Vietnam, the Philippines and Thailand.
“Singapore, Malaysia and net cash alone are worth US$3.23 a share, above Grab’s share price,” said Sachin Mittal, an analyst from DBS Group Research.
Singapore and Malaysia account for an estimated 58 per cent of Grab’s forecast revenue for FY2027 and about half of its adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda). DBS arrived at its valuation after assuming that Singapore, Malaysia and Indonesia would bear all the group’s regional corporate costs.
Including Indonesia’s adjusted Ebitda would raise the estimated value to US$3.67 a share, 26 per cent above the prevailing share price.
DBS also highlighted Grab’s strong earnings performance. Adjusted Ebitda for Q3 2026 rose 73 per cent year on year, beating market expectations by 23 per cent.
Grab also reported its first quarter in which all three business segments were profitable.
Following the results, the group raised its full-year 2026 adjusted Ebitda guidance to between US$790 million and US$800 million, from its previous forecast of US$720 million to US$740 million.
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“Grab’s current share price leaves enough cushion for any downside risks,” said Mittal.
DBS also noted that the market’s negative reassessment of Grab’s valuation was excessive, noting that the company trades at less than 12 times its forecast non-generally accepted accounting principles (Gaap) earnings per share, compared with 16 times for Sea.
It also expects Grab to deliver annual growth of 22 per cent in non-Gaap earnings per share between FY2026 and FY2028, slightly above Sea’s projected 21 per cent.
Improving profitability
DBS maintained its “buy” call and US$5 target price on Grab.
Meanwhile, CGS International (CGSI) analysts Jacquelyn Yow and Then Wan Lin raised their target price to US$4.70 from US$4.60, while maintaining an “add” rating.
They cited improving profitability in Grab’s financial services business, which recorded its first positive quarterly adjusted Ebitda of US$12 million in the third quarter.
Gross loans tripled year on year to US$2.71 billion. Even excluding the contribution from Superbank, loans grew 115 per cent, suggesting continued demand in Grab’s existing financial-services ecosystem.
CGSI expects the consolidation of Superbank and growth in Grab’s digital banking operations to support further earnings improvement. It also anticipates potential from the planned acquisition of buy-now-pay-later provider Atome, which is expected to be completed in the third quarter of 2027.
This comes as Grab’s deliveries business recorded a 58 per cent increase in adjusted Ebitda to US$123 million. Its adjusted Ebitda margin rose 65 basis points year on year to 2.7 per cent, supported by higher advertising income and improved operating efficiency.
However, CGS International expects margins to moderate in the fourth quarter as Grab increases spending on driver incentives and marketing.
Macquarie Equity Research also took a more cautious view, lowering its target price by 8 per cent to US$5.12 from US$5.55, while revising its earnings forecasts for FY2026 to FY2028. It nevertheless maintained its “outperform” rating for Grab.
The brokerage expects higher marketing expenditure during the festive season to weigh on deliveries margins, while tighter driver supply could lead to higher incentives and lower mobility margins in the fourth quarter.
Macquarie Equity Research analyst Zhi Wei Foo said: “We see Grab as a direct proxy for growing middle-class consumption of on-demand services in Southeast Asia. We believe Grab, as the market leader with an experienced management team, is well positioned to break even and capture growth opportunities”.
