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Hello there,

I rarely pay attention to ads. In fact, if I search for something and see an ad as the first result, I almost always skip to the first “real” search result.

My aversion to ads certainly isn’t stopping platforms like Zomato (ZOMATO, NSE), the Indian food delivery giant, from expanding their advertising businesses.

As my colleague Samreen shares in this week’s featured story, a recent survey found that nearly 63% of respondents already advertised on Zomato’s platform in March 2024. This was up from 54% in September 2023.

The company’s success in attracting advertisers is but one of several factors that have driven its share price to all-time highs this month. Over the past year, it has gone up by more than 200%, outperforming the benchmark Nifty 50 index. This marks a big change from its initial performance after going public in 2021 – shares had plunged by over 60% in the year that followed.

Find out more about how Zomato engineered this remarkable comeback – and whether this is sustainable – in Samreen’s piece.

— Simon

THE BIG STORY

Photo credit: Shutterstock

From bust to boom: Zomato turns the tide
Ads revenue, the Blinkit acquisition, and data analysis have helped turn Zomato’s fortunes in a few months after the post-IPO crash

3 Trends to keep an eye on

Hot stocks, earnings reports, restructuring, pressure from activist investors, and more.

Line Man Wongnai CEO Yod Chinsupakul / Photo credit: Line Man Wongnai

1️⃣ Line Man Wongnai reiterates IPO plans : The CEO of the Thailand-based food delivery platform said the company plans to go public in 2025 on either a Thai or US exchange, adding that a dual listing was also possible.

This is broadly in line with what Line Man Wongnai’s CFO told Tech in Asia in an interview last September.

A listing of the firm, valued at over US$1 billion, would be another significant milestone for Southeast Asian tech. Unlike companies like Sea or Grab, Line Man Wongnai is currently focused only on the Thai market, although it may consider expanding into other Southeast Asian countries post-IPO.

The hit in share prices that public Southeast Asian players have suffered will affect the valuation that Line Man Wongnai can hope to attract from public investors. Yet, if interest rates start to go down over the next few months, 2025 might prove as good a time as any to list.

2️⃣ SGX: a dose of reality: Every few years, stakeholders seem to freak out about the state of Singapore’s equity markets and propose various tonics aimed at reviving trading volumes and the number of public listings.

In the latest example of this, a Financial Times report stated that the city-state’s government agencies were studying proposals by an investor association to shake things up.

However, Lawrence Wong, who takes over as the country’s prime minister later this week, injected some realism into the debate recently. In his response to a parliamentary question, Wong noted that stock exchanges in developed markets such as the UK and Hong Kong were facing challenges, too.

It’s hard to see how Singapore can ever compete with what Wong noted was the “deep and liquid capital market and investor base” in the US.

That won’t stop people from trying. And once in a while, such measures might actually bear fruit: corporate governance reforms in Japan are cited as contributing to improved performance of the local stock market, although other factors such as a reallocation of assets from China have also played a part.

But bear in mind that Japan remains one of the world’s largest economies, home to many world-beating enterprises.

Perhaps the key to reviving markets in Singapore is to improve the performance of the companies already listed there. For example, DBS (Do5, SGX) delivered a record first quarter profit recently and was rewarded with a S$100 billion (US$74 billion) market capitalization – unprecedented for a Singapore firm.

3️⃣ GoTo’s private placement: Indonesian tech firm GoTo Group (GOTO, IDX) announced that it intends to issue 120 billion shares, 10% of its total issued and paid-up capital, via a private placement.

While the exact price it plans to sell these shares at was not disclosed, this may net the company around US$500 million, going by its closing share price on May 9.

Previously, GoTo had announced up to US$200 million of share buybacks.

Typically, companies buy back shares with excess capital that they do not need and wish to return to shareholders. Why launch a buyback if you are then going to raise even more capital from investors?

The opportunity for the private placement might only have come about after the buyback decision was made. However, this does raise questions about how the company is thinking about capital allocation.

2 Eye-popping facts

Tech in Asia scours the internet to bring you head-turning numbers from the world of business.

Photo credit: AWS

• US$8.8 billion: The amount that US cloud computing giant Amazon Web Services intends to invest in Singapore’s AI and cloud infrastructure over the next four years.
• US$3 billion: The valuation at which India-based hospitality firm Oyo is reportedly looking to raise fresh funding, down from US$10 billion in 2019, and after delaying plans to IPO last November.

The one you didn’t see coming

We spotlight the story that had everyone talking and social media buzzing during the past week.

Photo credit: Apple

Apple causes a stir with new iPad ad: To launch its latest iPad Pro model, Apple (AAPL, NDAQ) CEO Tim Cook posted a new ad on social media.

Set to the tune of All I Ever Need Is You, a 1972 single from pop duo Sonny & Cher, the ad shows various items humans have used to entertain and educate themselves over the years, from musical instruments to books, and even an old-school arcade video console.

However, the twist is that these items are being crushed by a giant compressor.

Particularly poignant is a yellow ball representing an emoji that gets compressed till its eyes pop out.

What’s left at the end? The new ultra-thin iPad.

Some have criticized the video for depicting the “wanton destruction” of these historical items and lacking respect for creative equipment and creators.

Even those who understand what Apple is trying to convey say that it doesn’t resonate.

So what is the company really trying to say? Simply that the iPad is an all-in-one destination for education, entertainment, and expressing creativity. Few people would dispute that. But the choice of song does make one feel nostalgia, and a sense of loss – despite the title.

And maybe someone should have rethought the optics of squeezing a lovable emoji till it exploded.

Whatever the case, Apple has apologized for having “missed the mark” with the ad. This fracas isn’t likely to hit iPad sales materially – as they say, there’s no such thing as bad publicity!

That’s it for this edition – we hope you liked it!

Happy investing and see you next week!

Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice.