China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Coupang reported C4Q22 total revenue missed our est. and cons. by (5%) and (2%). Net income missed our est. by (9%) and beat cons. by 18%. </li>
<li>We see upsides in margin due to change in product mix, higher contribution in ads, and optimization in logistics.</li>
<li>We trimmed our 2023 total revenue growth est. by (4%) and raise net income est. by 9% for operating efficiency improvement. Maintain BUY.</li>
</ul>


Coupang reported C4Q22 total revenue missed our est. and cons. by (5%) and (2%). Net income missed our est. by (9%) and beat cons. by 18%. 
We see upsides in margin due to change in product mix, higher contribution in ads, and optimization in logistics.
We trimmed our 2023 total revenue growth est. by (4%) and raise net income est. by 9% for operating efficiency improvement. Maintain BUY.


[Coupang Inc. (CPNG US) Earnings Review]: Upsides Ahead in Category and Margin Expansion

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.

<ul>
<li>We first check whether additional cost savings have been achieved in the center and whether there has been any deterioration in short-term liquidity due to the hasty pursuit of automation.</li>
<li>Then, we check the soundness of new businesses such as quick commerce, which boasts delivery within 30 minutes but carries the risk of deteriorating short-term profitability.</li>
<li>Lastly, we check how seriously Coupang's real estate cost structure has deteriorated and assess the risk that this could lead to devaluation by potentially undermining Coupang's growth premium.</li>
</ul>


We first check whether additional cost savings have been achieved in the center and whether there has been any deterioration in short-term liquidity due to the hasty pursuit of automation.
Then, we check the soundness of new businesses such as quick commerce, which boasts delivery within 30 minutes but carries the risk of deteriorating short-term profitability.
Lastly, we check how seriously Coupang's real estate cost structure has deteriorated and assess the risk that this could lead to devaluation by potentially undermining Coupang's growth premium.


What to Check at Coupang Earnings Call Tomorrow

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>The local media mentioned that the preliminary book building results of the Oasis IPO were terrible. </li>
<li>Therefore, the company is likely to either materially lower the IPO price range or postpone the IPO altogether.</li>
<li>Our base case valuation of Oasis Corp is target price of 24,847 won per share, which is 18.5% lower than the low end of the IPO price range. </li>
</ul>


The local media mentioned that the preliminary book building results of the Oasis IPO were terrible. 
Therefore, the company is likely to either materially lower the IPO price range or postpone the IPO altogether.
Our base case valuation of Oasis Corp is target price of 24,847 won per share, which is 18.5% lower than the low end of the IPO price range. 


Oasis Corp IPO Preliminary Book Building Results

<ul>
<li>We estimate that Coupang’s 4Q22’s revenue is in-line while non-GAAP net income beats cons by 29% because of the continuous cost-saving methods. </li>
<li>We cut Coupang’s TP from US$22 to US$19 because of several challenges in 2023, including inflation, barriers in international expansion, and difficulty in growth.</li>
<li>Yet, our TP is still 17% above current price, so we upgrade Coupang’s rating to BUY to reflect its advantages in competitive landscape, and margin expansions.</li>
</ul>


We estimate that Coupang’s 4Q22’s revenue is in-line while non-GAAP net income beats cons by 29% because of the continuous cost-saving methods. 
We cut Coupang’s TP from US$22 to US$19 because of several challenges in 2023, including inflation, barriers in international expansion, and difficulty in growth.
Yet, our TP is still 17% above current price, so we upgrade Coupang’s rating to BUY to reflect its advantages in competitive landscape, and margin expansions.


Coupang(CPNG US) Rating Change: Margin Still Has Upside, Upgrade to BUY

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>In this deep dive report, we initiate coverage on Softbank Group with a ¥6,300 target price and Neutral recommendation</li>
<li>We are cautious on global tech and consider that the main risk to the story but a recovery in China sentiment provides some offset</li>
<li>For Q3 results next week, we expect the defensive theme of the last two quarters to continue</li>
</ul>


In this deep dive report, we initiate coverage on Softbank Group with a ¥6,300 target price and Neutral recommendation
We are cautious on global tech and consider that the main risk to the story but a recovery in China sentiment provides some offset
For Q3 results next week, we expect the defensive theme of the last two quarters to continue


Softbank Group (Neutral) - Japan’s Global Tech Play: Initiation of Coverage and Q3 Preview

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)

[Coupang Inc. (CPNG US) Earnings Review]: Upsides Ahead in Category and Margin Expansion

We see upsides in margin due to change in product mix, higher contribution in ads, and optimization in logistics. Maintain BUY and TP of US$19,...

Blue Lotus Research Institute

What to Check at Coupang Earnings Call Tomorrow

This post discusses explicitly which points we must check at Coupang's Q4 earnings call tomorrow, particularly concerning Coupang's mysterious...

Sanghyun Park

Oasis Corp IPO Preliminary Book Building Results

The local media mentioned that the preliminary book building results of the Oasis IPO were terrible. Oasis is likely to either materially lower the...

Douglas Kim

Coupang(CPNG US) Rating Change: Margin Still Has Upside, Upgrade to BUY

We upgrade Coupang’s rating to BUY to reflect its advantages in competitive landscape, and margin expansions. We estimate that Coupang’s 4Q22’s non...

Blue Lotus Research Institute

Softbank Group (Neutral) - Japan’s Global Tech Play: Initiation of Coverage and Q3 Preview

In this deep dive report, we initiate coverage at Neutral with a ¥6,300 target price. We think global tech will struggle but a recovery in China...

Kirk Boodry

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