Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

Equity Bottom-Up

<p>We have been flagging that despite the appeal of ultra-growth the risk-return favors the downside on both operating momentum and valuations.  In our last report, <a href="https://www.smartkarma.com/insights/pinduoduo-pdd-us-know-when-to-fold-know-when-to-run" target="_blank" data-smartkarma-citation="insights:48659" rel="noopener">Pinduoduo (PDD US): Know When to Fold, Know When to Run</a>, we highlighted that <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> offers much better value than PDD on P/GMV.  PDD's share price fell 18% in the month of March, but the stock still trades at a 29% premium to BABA shares (however, we do note the share overhang on BABA shares from the anti-monopoly uncertainty in the near-term.)   </p><p>In this report, we highlight four charts that would make PDD holders nervous:</p><ol>
<li>
<strong>P/Sales chart</strong> – PDD trades at 3x BABA’s multiple.  PDD is not profitable.  BABA’s operating margin was 22% in the Dec quarter and 72% EBITA margin for the marketplace. </li>
<li>Once the growth rate breaks below 100%, the rate of deceleration is rapid.  Take a look at <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, and BABA’s <strong>historical revenue deceleration rates.</strong>  PDD’s revenue growth in 2020 fell to 62% (normalized to exclude merchandise sales) from 130% in 2019.</li>
<li>
<strong>GMV (Gross Merchandise Value) growth</strong> continued to decelerate in 4Q20.  PDD needs both buyer number and revenue per buyer increase to grow 30%+ respectably to maintain 60%+ revenue growth.  PDD recorded 35% and 23% growth, respectively, in 4Q20. </li>
<li>The path to profitability remains unclear.  <strong>Gross margin continues to come under pressure</strong> and operating loss margin widened instead of narrowing QoQ, excluding the new merchandise sales. We don't see meaningful evidence of ready to turn profitable yet, although the new merchandise sales appear to be margin accretive.         </li>
</ol>

We have been flagging that despite the appeal of ultra-growth the risk-return favors the downside on both operating momentum and valuations.  In our last report, Pinduoduo (PDD US): Know When to Fold, Know When to Run, we highlighted that Alibaba Group (BABA US) offers much better value than PDD on P/GMV.  PDD's share price fell 18% in the month of March, but the stock still trades at a 29% premium to BABA shares (however, we do note the share overhang on BABA shares from the anti-monopoly uncertainty in the near-term.)   In this report, we highlight four charts that would make PDD holders nervous:

P/Sales chart – PDD trades at 3x BABA’s multiple.  PDD is not profitable.  BABA’s operating margin was 22% in the Dec quarter and 72% EBITA margin for the marketplace. 
Once the growth rate breaks below 100%, the rate of deceleration is rapid.  Take a look at Vipshop Holdings (VIPS US), JD.com Inc (ADR) (JD US), and BABA’s historical revenue deceleration rates.  PDD’s revenue growth in 2020 fell to 62% (normalized to exclude merchandise sales) from 130% in 2019.

GMV (Gross Merchandise Value) growth continued to decelerate in 4Q20.  PDD needs both buyer number and revenue per buyer increase to grow 30%+ respectably to maintain 60%+ revenue growth.  PDD recorded 35% and 23% growth, respectively, in 4Q20. 
The path to profitability remains unclear.  Gross margin continues to come under pressure and operating loss margin widened instead of narrowing QoQ, excluding the new merchandise sales. We don't see meaningful evidence of ready to turn profitable yet, although the new merchandise sales appear to be margin accretive.         


Pin Duo Duo (PDD US): Four Charts To Make You Want to Run

Telco/Internet specialist

Kirk Boodry

Redex Research

<p>Starting today, Coupang employees are eligible to sell some of their shares, the start of a series of early expirations for lock-up clauses that could add 208mn (12% of total S/O) to the float over the next three months. How much comes into the market depends on whether the share price remains above the IPO price (c. 3% eligible sold by employees) or is 33% higher (c. 9% eligible, sold by strategic shareholders). We expect Vision Fund to be a seller if the share price remains elevated but a 14% decline over the last few days means that may not be a sure thing.  </p>

Starting today, Coupang employees are eligible to sell some of their shares, the start of a series of early expirations for lock-up clauses that could add 208mn (12% of total S/O) to the float over the next three months. How much comes into the market depends on whether the share price remains above the IPO price (c. 3% eligible sold by employees) or is 33% higher (c. 9% eligible, sold by strategic shareholders). We expect Vision Fund to be a seller if the share price remains elevated but a 14% decline over the last few days means that may not be a sure thing.  

Coupang - A Summary of Early Lock-Up Expirations

APAC IPOs & Placements

Zhen Zhou, Toh

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 Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US)</a> raised about US$915m in its US IPO, priced at US$21 per ADS, above the top end of its initial price range.</p>
</div>
<div>
<p>Tuya is a Platform as a Service (PaaS) and Software as a Service (SaaS) provider to businesses and developers with a focus on IoT. The company’s IoT PaaS enables businesses and developers to easily develop, launch, manage, and monetize software-enabled devices and services while its Industry SaaS helps businesses deploy, connect, and manage a large number and different types of smart devices. </p>
</div>
<div>
<p>In this note, we will look at updated valuation and share our final thoughts on the IPO.</p>
</div>
<div>
<p>We have previously covered the company in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-ride-the-iot-wave-via-tuya-s-platform" target="_blank" data-smartkarma-citation="insights:48740" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Ride the IoT Wave Via Tuya’s Platform</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-tuya-s-platform-usage-review" target="_blank" data-smartkarma-citation="insights:48822" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Tuya's Platform Usage Review</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-peer-comparison-forecast-and-valuation" target="_blank" data-smartkarma-citation="insights:48924" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Peer Comparison, Forecast, and Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-ipo-pushing-for-a-pricey-connection" target="_blank" data-smartkarma-citation="insights:49185" rel="noopener">Tuya (涂鸦智能) IPO -  Pushing for a Pricey Connection</a> </li>
</ul>
</div>


Tuya Inc (TUYA US) raised about US$915m in its US IPO, priced at US$21 per ADS, above the top end of its initial price range.


Tuya is a Platform as a Service (PaaS) and Software as a Service (SaaS) provider to businesses and developers with a focus on IoT. The company’s IoT PaaS enables businesses and developers to easily develop, launch, manage, and monetize software-enabled devices and services while its Industry SaaS helps businesses deploy, connect, and manage a large number and different types of smart devices. 


In this note, we will look at updated valuation and share our final thoughts on the IPO.


We have previously covered the company in:




Tuya (涂鸦智能) Pre-IPO - Ride the IoT Wave Via Tuya’s Platform 

Tuya (涂鸦智能) Pre-IPO - Tuya's Platform Usage Review 

Tuya (涂鸦智能) Pre-IPO - Peer Comparison, Forecast, and Valuation 

Tuya (涂鸦智能) IPO -  Pushing for a Pricey Connection 



Tuya (涂鸦智能) IPO Trading - Strong Momentum but Watch Out for the Post Debut Fizzle

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<p>Coupang had another losing day. It ended the day with an 8.15% loss.</p><p>It is now at -31.83% from the IPO opening, -37.26% from the high, but still +23.69% from the IPO price ($35.00).</p><table class="table table-striped">
<colgroup>
<col width="70">
<col width="60">
<col width="60">
<col width="60">
<col width="60">
<col width="60">
<col width="60">
<col width="60">
<col width="60">
<col width="85">
<col width="60">
<col width="60">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Date"}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>Date</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Close"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Close</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Open"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Open</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"High"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>High</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Low"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Upper W"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>U Wick</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Body"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Body</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Lower W"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>L Wick</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TV/SO"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>TV/SO</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Volume"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Volume</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"x Open"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>x Open</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Daily Δ"}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>Daily Δ</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44272}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>3/17/21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":43.29}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>43.29</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>46.00</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46.87}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>46.87</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":43.19}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>43.19</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.2364130434782602}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-4]-R[0]C[-3])&gt;0, (R[0]C[-4]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]), (R[0]C[-3]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]))">-23.64%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.7364130434782612}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-5]-R[0]C[-4])/(R[0]C[-3]-R[0]C[-2])">-73.64%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.02717391304347865}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-6]-R[0]C[-5])&gt;0, (R[0]C[-5]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]), (R[0]C[-6]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]))">2.72%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.008796832905141373}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[1]/Misc!R15C2">0.88%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":15087807}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>15,087,807</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.07999999999999999}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-7]-R[0]C[-6])/R[0]C[-8]">8.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.08147676639083393}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-10]-R[1]C[-10])/R[1]C[-10]">-8.15%</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44271}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>3/16/21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47.13}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>47.13</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50.59}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>50.59</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50.77}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>50.77</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46.7}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>46.70</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.044226044226044155}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-4]-R[0]C[-3])&gt;0, (R[0]C[-4]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]), (R[0]C[-3]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]))">-4.42%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.8501228501228503}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-5]-R[0]C[-4])/(R[0]C[-3]-R[0]C[-2])">-85.01%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.10565110565110557}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-6]-R[0]C[-5])&gt;0, (R[0]C[-5]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]), (R[0]C[-6]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]))">10.57%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.008484659699923167}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[1]/Misc!R15C2">0.85%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":14552386}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>14,552,386</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.08045068195295513}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-7]-R[0]C[-6])/R[0]C[-8]">8.05%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.06580773042616452}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-10]-R[1]C[-10])/R[1]C[-10]">-6.58%</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44270}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>3/15/21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50.45}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>50.45</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":50.13}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>50.13</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":51.85}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>51.85</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":49.02}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>49.02</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.3703703703703702}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>-37.04%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.012345679012347574}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>-1.23%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6172839506172823}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>61.73%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.01017824660840366}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[1]/Misc!R15C2">1.02%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":17457126}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>17,457,126</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05645322162377814}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-7]-R[0]C[-6])/R[0]C[-8]">5.65%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.040850010315659255}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-10]-R[1]C[-10])/R[1]C[-10]">4.09%</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44267}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>3/12/21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":48.47}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>48.47</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":52.54}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>52.54</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":52.76}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>52.76</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":46.25}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>46.25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.049999999999999115}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>-5.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6374999999999997}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>63.75%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3125000000000011}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>31.25%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.017795032368995652}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[1]/Misc!R15C2">1.78%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":30520986}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>30,520,986</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.12390559573658162}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-7]-R[0]C[-6])/R[0]C[-8]">12.39%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.015837563451776674}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-10]-R[1]C[-10])/R[1]C[-10]">-1.58%</td>
</tr>
<tr>
<td data-sheets-value='{"1":3,"3":44266}' data-sheets-numberformat='{"1":5,"2":"m\"/\"d\"/\"yy"}'>3/11/21</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":49.25}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>49.25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":63.5}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>63.50</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":69}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>69.00</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":49.25}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'>49.25</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.27848101265822783}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-4]-R[0]C[-3])&gt;0, (R[0]C[-4]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]), (R[0]C[-3]-R[0]C[-2])/(R[0]C[-2]-R[0]C[-1]))">-27.85%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":-0.7215189873417721}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-5]-R[0]C[-4])/(R[0]C[-3]-R[0]C[-2])">-72.15%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=if((R[0]C[-6]-R[0]C[-5])&gt;0, (R[0]C[-5]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]), (R[0]C[-6]-R[0]C[-3])/(R[0]C[-4]-R[0]C[-3]))">0.00%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.05339743545264174}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[0]C[1]/Misc!R15C2">5.34%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":91584120}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>91,584,120</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3110236220472441}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=(R[0]C[-7]-R[0]C[-6])/R[0]C[-8]">31.10%</td>
<td style="text-align: right;" data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'></td>
</tr>
<tr><td colspan="12">Source: NYSE</td></tr>
</tbody>
</table><p>Of course, the treasuries bashed most growth stocks. But many of them had a nice recovery in the afternoon, thanks to the Fed.</p><p>Unfortunately, Coupang was one of a few exceptions.</p><p>The biggest worrying factor today must have been the first batch of insider lockup expiration tomorrow.</p><p>34M shares will hit the market on March 18. They represent about 2% of the SO and nearly twice the DTV in the last three sessions.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 277.273px;" data-sheets-value='{"1":2,"2":"Shareholding"}'>Shareholding</td>
<td style="text-align: right; width: 191.818px;" data-sheets-value='{"1":2,"2":"Qty."}'>Qty.</td>
<td style="text-align: right; width: 212.727px;" data-sheets-value='{"1":2,"2":"%"}'>% of SO</td>
</tr>
<tr>
<td style="width: 277.273px;" data-sheets-value='{"1":2,"2":"Employee stock option"}'>Employee stock option</td>
<td style="text-align: right; width: 191.818px;" data-sheets-value='{"1":3,"3":65700000}' data-sheets-numberformat='[null,2,"#,##0",1]'>65,700,000</td>
<td style="text-align: right; width: 212.727px;" data-sheets-value='{"1":3,"3":0.038305893087563235}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[-1]/R4C2">3.83%</td>
</tr>
<tr>
<td style="width: 277.273px;" data-sheets-value='{"1":2,"2":" - Early lockup release on March 18"}'>- Early lockup release on March 18</td>
<td style="text-align: right; width: 191.818px;" data-sheets-value='{"1":3,"3":34000000}' data-sheets-numberformat='[null,2,"#,##0",1]'>34,000,000</td>
<td style="text-align: right; width: 212.727px;" data-sheets-value='{"1":3,"3":0.019823445433442163}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=R[0]C[-1]/R4C2">1.98%</td>
</tr>
<tr>
<td style="width: 277.273px;" data-sheets-value='{"1":2,"2":"SO"}'>SO</td>
<td style="text-align: right; width: 191.818px;" data-sheets-value='{"1":3,"3":1715140797}' data-sheets-numberformat='[null,2,"#,##0",1]'>1,715,140,797</td>
<td style="text-align: right; width: 212.727px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
</tr>
<tr><td colspan="3" rowspan="1" style="width: 723.636px;" data-sheets-value='{"1":2,"2":"Source: NYSE"}'>Source: NYSE</td></tr>
</tbody>
</table><p>The condition for the early lockup release is simple:</p><p>If the share price stayed at or above the IPO price in the three consecutive trading sessions after the IPO, the early release kicks in.</p><p>The stock option's average strike price is <strong>$1.95 per share</strong>, low enough to have a serious concern for tomorrow.</p><hr><p>Not only that,</p><p>Kim Bom Suk, the CEO, already cashed in on his shares. He liquidated 1.2M shares for $42M through a secondary offering on the IPO day at $35.00 a share.</p><p>As a result, his class B shareholding fell from 76.7% to 76.2%.</p><p>Now, <strong>another early lockup release (by the major shareholder) will kick in 12 days after the IPO</strong> if the price stays <strong>33%</strong> above the IPO price.</p><p>The triggering price is $46.55, +7.53% from the current price.</p>

Coupang had another losing day. It ended the day with an 8.15% loss.It is now at -31.83% from the IPO opening, -37.26% from the high, but still +23.69% from the IPO price ($35.00).
















Date
Close
Open
High
Low
U Wick
Body
L Wick
TV/SO
Volume
x Open
Daily Δ


3/17/21
43.29
46.00
46.87
43.19
-23.64%
-73.64%
2.72%
0.88%
15,087,807
8.00%
-8.15%


3/16/21
47.13
50.59
50.77
46.70
-4.42%
-85.01%
10.57%
0.85%
14,552,386
8.05%
-6.58%


3/15/21
50.45
50.13
51.85
49.02
-37.04%
-1.23%
61.73%
1.02%
17,457,126
5.65%
4.09%


3/12/21
48.47
52.54
52.76
46.25
-5.00%
63.75%
31.25%
1.78%
30,520,986
12.39%
-1.58%


3/11/21
49.25
63.50
69.00
49.25
-27.85%
-72.15%
0.00%
5.34%
91,584,120
31.10%


Source: NYSE

Of course, the treasuries bashed most growth stocks. But many of them had a nice recovery in the afternoon, thanks to the Fed.Unfortunately, Coupang was one of a few exceptions.The biggest worrying factor today must have been the first batch of insider lockup expiration tomorrow.34M shares will hit the market on March 18. They represent about 2% of the SO and nearly twice the DTV in the last three sessions.







Shareholding
Qty.
% of SO


Employee stock option
65,700,000
3.83%


- Early lockup release on March 18
34,000,000
1.98%


SO
1,715,140,797
-

Source: NYSE

The condition for the early lockup release is simple:If the share price stayed at or above the IPO price in the three consecutive trading sessions after the IPO, the early release kicks in.The stock option's average strike price is $1.95 per share, low enough to have a serious concern for tomorrow.Not only that,Kim Bom Suk, the CEO, already cashed in on his shares. He liquidated 1.2M shares for $42M through a secondary offering on the IPO day at $35.00 a share.As a result, his class B shareholding fell from 76.7% to 76.2%.Now, another early lockup release (by the major shareholder) will kick in 12 days after the IPO if the price stays 33% above the IPO price.The triggering price is $46.55, +7.53% from the current price.

Coupang: Early Lockup Releases & Local Regulatory Risks

<p>Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.</p><p>That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.</p><h2><strong>Highlights</strong></h2><p><strong>Softbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. </strong>Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and Grab</p><p><strong>Coupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  </strong>As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return </p><p><strong>There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium</strong>. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)</p><p><strong>Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund</strong>.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth</p>

Coupang’s monster IPO is very likely to be the highlight of Vision Fund 1 and provides a solid counterpoint to the WeWork debacle early in the IPO cycle but there remains a significant number of portfolio companies still to come. At Q3 results, Softbank talked about an ongoing parade of companies coming to market with 10-15 annual events but there is a push to get companies to list whilst markets are still receptive and FY21 could see up to 20 companies hit public markets.That is positive for Softbank shares which tend to rise in anticipation of surfaced value, again assuming the IPO market remains open. It also serves to highlight the main risk for Softbank shares as a sustained tech sell-off would lower the value of the Vision Fund portfolio, increase concerns about Northstar and lower expectations for the current crop of IPO hopefuls.HighlightsSoftbank Vision Fund could see up to 20 companies hitting public markets 2021 should favorable conditions continue. Vision Fund says it is encouraging companies to go public whilst conditions are still receptive and Q4 (Mar) can already boast of two listings, a SPAC merger and two more listings in process. Leading candidates to go public include Didi Chuxing and GrabCoupang upside alone doubles total returns and will boost Vision Fund to its best quarter ever.  As of mid-March, Vision Fund’s public portfolio is up $27bn versus $13bn in Q2, $8bn in Q2 and $2bn in Q1. On the aggregate, it more than doubles the Vision Fund total return There may upside in the private portfolio too as Cruise raised funds in January at a 58% premium. It is usually a mug’s game trying to figure out where private valuations will end up but the Cruise stake is large enough to outweigh a lot of smaller changes for other portfolio companies. Cruise raised $2bn in January at a $30bn valuation, a 58% premium to where Softbank invested and a possible $1.3bn unrealized gain ($2.25bn &gt; $3.55bn)Portfolio company View went public through a SPAC merger but at an apparent loss for Vision Fund.  Smart glass maker View’s SPAC merger closed 9 March, the day before the Coupang IPO but it appears Softbank’s original $1.1bn investment is worth barely half that. That is a fraction of the Coupang upside but is a reminder that valuations can go both ways. Other problem investments include Greensill, Katerra, Oyo and OakNorth

Softbank Group - Vision Fund’s Race to Liquidity

South Korea

Coupang, Inc. operates as an e-commerce company. The Company offers dynamic end-to-end e-commerce and logistic solutions. Coupang serves customers worldwide.

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Coupang (CPNG US)

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