Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

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<p><strong>In this insight, we provide our earnings estimates and key assumptions of Coupang from 2021 to 2025. </strong></p>
<p>We forecast the company to generate net revenue of $16.5 billion in 2021 (up 38% YoY) and $19.9 billion in 2022 (up 20.8% YoY). We have assumed the company's sales growth rate to decline gradually in the ensuing years and we estimate Coupang to generate sales of $28.5 billion in 2025. From 2020 to 2025, we have assumed the company's sales to increase by 18.9% CAGR. </p>
<p>We also estimate the company's operating margin to improve from -4.4% in 2020 to -2.6% in 2021 and 4.7% in 2025, driven by lower operating expenses and cost of sales as a percentage of sales. We estimate Coupang to have an operating profit of $1.3 billion and a net profit of $1.4 billion in 2025. </p>
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In this insight, we provide our earnings estimates and key assumptions of Coupang from 2021 to 2025. 
We forecast the company to generate net revenue of $16.5 billion in 2021 (up 38% YoY) and $19.9 billion in 2022 (up 20.8% YoY). We have assumed the company's sales growth rate to decline gradually in the ensuing years and we estimate Coupang to generate sales of $28.5 billion in 2025. From 2020 to 2025, we have assumed the company's sales to increase by 18.9% CAGR. 
We also estimate the company's operating margin to improve from -4.4% in 2020 to -2.6% in 2021 and 4.7% in 2025, driven by lower operating expenses and cost of sales as a percentage of sales. We estimate Coupang to have an operating profit of $1.3 billion and a net profit of $1.4 billion in 2025. 


Coupang IPO - Key Assumptions & Earnings Estimates

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>Baidu (BIDU), iQiyi (IQ), Trip.com (TCOM), and Autohome (ATHM) got negative industry data for the whole year of 2020.</li>
<li>A Meituan delivery worker appeared in a Freshippo store, but Meituan should be a major competitor of Freshippo’s related party, Ele.me.</li>
</ul>


Baidu (BIDU), iQiyi (IQ), Trip.com (TCOM), and Autohome (ATHM) got negative industry data for the whole year of 2020.
A Meituan delivery worker appeared in a Freshippo store, but Meituan should be a major competitor of Freshippo’s related party, Ele.me.


China Internet Weekly (15Feb2021): Meituan Employee Showed up in Freshippo, Bad Data for Four Apps

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG KS)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>, has filed for an NYSE IPO to raise up to $2 billion, according to press reports.</p><div class="content-highlight"><p>Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.</p></div>

Coupang (CPNG KS) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by Softbank Group (9984 JP), has filed for an NYSE IPO to raise up to $2 billion, according to press reports.Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.

Coupang IPO Initiation: Delivering the Goods

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<p><a href="https://finance.yahoo.com/news/1-softbank-backed-coupang-reveals-134723758.html" target="_blank" rel="noopener">Coupang</a>, the largest e-commerce company in Korea, is getting ready to complete its IPO in the New York Stock Exchange in the next few weeks. Coupang is aiming for a valuation of nearly <strong>$50 billion.</strong> This IPO is expected to be the largest IPO by an non-US company in the United States since the Alibaba IPO in 2014. Coupang was last valued at $9 billion in its last private fund raising around 2018. The IPO placeholder is put at $1 billion but this amount is likely to be raised much further. </p>
<p>Coupang has received nearly $3 billion from Softbank and Softbank's Vision Fund since the inception of the company. Other major investors of Coupang include Blackrock, Sequoia Capital, and Bill Ackman. Major underwriters of the Coupang IPO include Goldman Sachs, Allen &amp; Co, JP Morgan, BofA Securities and Citigroup. </p>
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Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO in the New York Stock Exchange in the next few weeks. Coupang is aiming for a valuation of nearly $50 billion. This IPO is expected to be the largest IPO by an non-US company in the United States since the Alibaba IPO in 2014. Coupang was last valued at $9 billion in its last private fund raising around 2018. The IPO placeholder is put at $1 billion but this amount is likely to be raised much further. 
Coupang has received nearly $3 billion from Softbank and Softbank's Vision Fund since the inception of the company. Other major investors of Coupang include Blackrock, Sequoia Capital, and Bill Ackman. Major underwriters of the Coupang IPO include Goldman Sachs, Allen &amp; Co, JP Morgan, BofA Securities and Citigroup. 


Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Alibaba Group Holding  / Equity Bottom-Up

<p>Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a>, and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, it has been difficult to assess a fair valuation level for the company. </p><p>Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. </p><p>In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.</p>

Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed Ant Group (6688 HK), and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the Alibaba Group (9988 HK), it has been difficult to assess a fair valuation level for the company. Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (BABA US)

Coupang IPO - Key Assumptions & Earnings Estimates

In this insight, we provide our earnings estimates and key assumptions of Coupang from 2021 to 2025. We forecast the company to generate net...

Douglas Kim

China Internet Weekly (15Feb2021): Meituan Employee Showed up in Freshippo, Bad Data for Four Apps

Baidu , iQiyi, Trip.com, and Autohome got negative industry data.A Meituan delivery worker showed up in a Freshippo store.

Ming Lu

Coupang IPO Initiation: Delivering the Goods

Coupang, which is backed by Softbank, has filed for an NYSE IPO to raise up to $2 billion, according to press reports. Coupang's fundamentals tick...

Arun George

Coupang IPO Preview

Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO in the New York Stock Exchange in the next few weeks....

Douglas Kim

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts to assess the implied value for their equity holding in Ant Group, and what can...

Wium Malan, CFA

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