Shares of Indonesian tech giant GoTo Group jumped in their trading debut in Jakarta, the latest example of bullish sentiment in one of Asia’s best-performing stock markets this year.
Shares of GoTo, the ride-hailing, fintech and e-commerce giant formed last year by the combination of Southeast Asian startups Gojek and Tokopedia, rose as much as 23% to 416 rupiah (about 3 U.S. cents) in early trading Monday.
Indonesia’s benchmark index was up about 0.8%, taking its gains this year to more than 10%.
GoTo, known formally as PT GoTo Gojek Tokopedia Tbk, raised about $1.1 billion in its offering, one of the largest ever in Indonesia. The offering gave GoTo a valuation of around $28 billion, making it one of the most valuable companies in Southeast Asia’s biggest economy.
Nomura on Monday initiated coverage of GoTo with a buy rating and a price target of IDR416, implying an 11.9x price-to-sales ratio. “In our view, GoTo deserves a premium valuation,” it said, citing the company’s fast-growing fintech business as “the valuation driver.”
The bank also valued the company’s Tokopedia e-commerce business at a premium over local players given its large market share and valued GoTo’s on-demand services at a premium over regional peers, saying that “drivers tend to prefer GoTo for its high income per hour, suggesting potential lower driver incentives” from the company.
Ciptadana Sekuritas Asia also started the company at a buy rating, setting a target price of IDR500. “GoTo offers a unique exposure to a combination of growing economy and rising digital trend in Indonesia,” it said. It described the company as the “best proxy to rising digital consumption in Indonesia,” the world’s fourth-most-populous country.
Shares of online mall Bukalapak.com surged in their trading debut last August following what was Indonesia’s largest-ever initial public offering, but eventually fell well below their offering price. The stock is down more than 20% this year.
GoTo shares were last 14% higher at IDR386.