Ultra-exciting turnaround opportunity in Asia ex. China!
The business model of the Asian company is easily explained. It is similar to the American model of Uber for carsharing. Just like Uber, they offer affordable transportation for people, food, goods, etc. through private taxis and motorbikes/Vespas via their popular app.
But here’s the catch: They also have a business concept that Uber does not have to the same extent: a so-called „super app.“ Super apps are extremely popular in Asia, meaning that various functions are combined into one app. Instead of using numerous different apps, customers only need to use this one super app.
With the Asian Uber’s super app, customers can arrange their transportation, make purchases at supermarkets or pharmacies, handle banking services (Fintech), book delivery services or order food from restaurants, which the drivers then bring to their home or workplace.
The Asian Uber: A successful turnaround with a super app. The biggest advantage of the company, founded in 2002, is that it is the number one in one of the most populous and fastest-growing regions in the world: it is active in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. This gives them a potential market of around 600 million people.
Now, here’s where it gets interesting: For the past two years, the stock has been recovering. In fact, it is still trading at about -80% below its all-time high after going public in the US in December 2020. In comparison, Uber’s stock is currently near its all-time highs (from February 2021).
Both companies made the same mistake, but Uber corrected it earlier: Like Uber, the Asian company also got caught up in costly over-expansion. They wanted to expand too quickly and too much, and in the end, they only burned through money. They expanded into too many Asian countries and into areas of the super app that were simply unprofitable.
Restructuring is already showing great results. However, just like Uber’s management, the Asian management has also recognized these mistakes and is now steering towards a strong restructuring program. With success – and this is the basis for the stock’s comeback. For example, they pulled out of Cambodia.
We can see with Uber what happens to the stock price when the market recognizes a successful restructuring. Uber also made the mistake of trying to expand globally years ago. But the management turned things around. They focused on core markets, especially North America and Europe, and their core competencies – and the stock price only went in one direction: up.
In conclusion: In July 2022, Uber’s stock was trading about -70% below its all-time highs. Then the restructuring showed results and the Uber stock tripled in the last 1.5 years. The big advantage of the Asian competitor is that they have Uber’s success as a blueprint for a successful turnaround and a comeback on the stock market. This offers you an incredibly exciting profit opportunity.