Research & Stock Picks

Company Reports

24 January 2025

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Tech: Underweight with ASSA as Top-Pick

Strength

The shift in consumer behavior from being incentive-oriented to function-inclined (shown by historical trends) will help improve tech players’ profitability, bringing  take rate to 3.08% in 2025 (+17.5 bps YoY) and retain contribution margins

 

Weakness

Earnings may remain in the red for the next two years, as weaker purchasing power is expected to hinder tech players from significantly cutting customer incentives and S&M expenses

 

Opportunity

Future expansion efforts and lower ‘cash burn’ rate should improve profitability; potential lower interest rates ahead may improve sentiment on the sector and help support share price performances

 

Threat

Lower customer incentives and S&M costs to dampen GTV and TPV growth, which could be exacerbated by weak purchasing power amid strong USD; eFisheries debacle could worsen sentiment on the sector resulting in continued market underperformance

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