TikTok is returning to Indonesia’s e-commerce market by acquiring Tokopedia and will be a controlling shareholder, while GOTO will retain 24.99% non-diluted shareholding. Maybank IB in its report over the acquisition believes the low valuation in
the disclosure is for transaction structure purposes and does not reflect the actual market value of Tokopedia and TikTok shop.
Based on its calculation it shows implied value of IDR139t in combined entity (New Tokopedia), and GOTO’s 24.99% worth IDR34.8t. The house reiterates a BUY with TP of IDR110.
The transaction structure is as follows: 1) TikTok will invest USD840 (about IDR13.2t) to subscribe to new shares issued by Tokopedia; of which USD340m will be used to purchase TikTok shop assets in Indonesia. 2) Tokopedia will receive USD1.0b (about IDR15.7t) in promissory notes from TikTok. 3) TikTok owns 75.01% of Tokopedia post-merger and GOTO owns
24.99%. 4) The parties agreed that the 24.99% ownership of GOTO in Tokopedia will not be further diluted by any future funding from TikTok to Tokopedia. 5) GOTO will be Tokopedia’s preferred partner.
Maybank thinks Tokopedia’s valuation is about IDR139t if solely based on numbers in public disclosure above and if assumed no further capital injection required in TikTok. However, the house also believes this valuation is solely for transaction structure purposes and does not reflect the actual market value. Based on assessment, GTV of the combined entity can
accelerate to IDR557t in FY25E (43% e-commerce market share in FY25E).
Assuming blended 5% take-rate (take rate in fashion can reach 8.5%), and multiple of 5x revenue (we expect a re-rating in Tokopedia post-merger), it will translate into value of IDR139t, in-line with expectation.
Overall, Maybank IB maintains a BUY call on GOTO with TP of IDR110, as the house looks into value creation post-merger, It also believes the partnership with TikTok will strengthen GOTO’s position, and it may accelerate GOTO’s logistics and digital financial growth
