DELHY - Delivery Hero: Diverse And Robust Brand Portfolio

June, 04 2024 04:44 AM Delivery Hero

2024-06-04 04:44:38 ET

Summary

Delivery Hero operates in multiple regions, including Asia, Middle East/North Africa, Europe, and Latin America, with strong market leadership in each region.
The company has achieved strong top-line growth and positive adjusted EBITDA, driven by strong market leadership, strategic expansion into less competitive markets, and a focus on cost efficiency.
Delivery Hero's performance varied across regions, with strong growth in Europe and MENA, underperformance in Latin America due to macro headwinds in Argentina, and challenges in Asia due to intense competition.
Based on relative valuation, the Company is priced at a discount to its peers. I believe these are for good reasons.

Delivery Hero (DLVHF) (DELHY) ("DH") is a multinational food delivery company that operates 5 different businesses:

Asia: DH is operating in Southeast Asia ((SEA)) via its Foodpanda platform, which is the second-largest delivery platform in the region; and in South Korea via its Baemin/Baedal Minjok platform, Korea's number 1 food delivery app , and others including Bangladesh, Pakistan, accounting for a smaller portion.
Middle East and North Africa (MENA): DH has multiple brands under its umbrella, including Instashop, Hungerstation, and notably Talabat, the leading food delivery platform in the region, with little competition.
Europe: Similarly, DH owns multiple brands, consisting primarily of Foodora, rebranded from "Foodpanda'' in Mar-23 , a leading delivery app in Sweden ; Glovo, acquired by DH on Dec-23 , the leading delivery app in Spain as of 2022; and other brands including efood and foody.
Americas/Latin America (LatAm): Via its PedidosYa brand, DH operates in various markets including Argentina and Chile, where it is the leading food delivery app as of 2022 .
Integrated Verticals: DH's integrated vertical, primarily consisting of Dmarts is the companies-owned small warehouses holding thousands of in stocks and inventories. Dmarts promised quick deliveries of goods, such as groceries. This is part of the company's quick-commerce strategy.