Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

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<p>It's been a <em>long</em> time since we looked at and wrote about <a href="https://www.smartkarma.com/entities/cj-korea-express-corp" target="_blank" data-smartkarma-citation="entities:11557:1" rel="noopener">CJ Logistics (000120 KS)</a>. In a note we published here way back in June 2017, we said it was highly unlikely CJ Logistics would see the margin improvement needed to hit analysts' consensus forecast of 6,400 won per share in 2018.</p>
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<p>Specifically, we doubted that higher margins would be driven by growth of the company's <em>Global</em> segment, which includes CJ's international freight forwarding business and several overseas logistics units CJ had acquired in an effort to create a "Pan-Asian Logistics Network".</p>
<p>Since we last wrote about the company, CJ Logistics has apparently abandoned its push to become a major player in logistics <em>outside</em> of Korea, focusing instead on a disparate list of domestic initiatives. Overall profitability remains similar to depressed levels from 3-4 years ago. </p>
<p>Since we last tracked them, CJ Logistics' shares haven't performed well: they're down about 24% compared to their 5-year high reached in mid-2016, though like many stocks they have risen from depressed Q120 levels. Unless CJ Logistics can articulate a winning long-term strategy, and then show consistent progress towards executing it successfully, we would avoid the shares. </p>



It's been a long time since we looked at and wrote about CJ Logistics (000120 KS). In a note we published here way back in June 2017, we said it was highly unlikely CJ Logistics would see the margin improvement needed to hit analysts' consensus forecast of 6,400 won per share in 2018.

Specifically, we doubted that higher margins would be driven by growth of the company's Global segment, which includes CJ's international freight forwarding business and several overseas logistics units CJ had acquired in an effort to create a "Pan-Asian Logistics Network".
Since we last wrote about the company, CJ Logistics has apparently abandoned its push to become a major player in logistics outside of Korea, focusing instead on a disparate list of domestic initiatives. Overall profitability remains similar to depressed levels from 3-4 years ago. 
Since we last tracked them, CJ Logistics' shares haven't performed well: they're down about 24% compared to their 5-year high reached in mid-2016, though like many stocks they have risen from depressed Q120 levels. Unless CJ Logistics can articulate a winning long-term strategy, and then show consistent progress towards executing it successfully, we would avoid the shares. 

CJ Logistics: Still Lacking Focus, Still Unlikely to Reach 6,000+ EPS Any Time Soon

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

<div class="content-highlight"><p><strong>According to <a href="https://www.bloomberg.com/news/articles/2021-01-06/softbank-s-son-is-poised-for-another-ipo-windfall-in-2021" target="_blank" rel="noopener">Bloomberg, </a>it reported that Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO as soon as 2Q 2021.</strong> The estimated valuation of Coupang could be at least $30 billion. Softbank invested $2.7 billion in Coupang and <a href="https://biz.chosun.com/site/data/html_dir/2021/01/07/2021010702121.html?utm_source=naver&amp;utm_medium=original&amp;utm_campaign=biz" target="_blank" rel="noopener">Softbank (Vision Fund)</a> currently has a 37% stake in the company. If Mr. Market is willing to place a $30 billion valuation on Coupang, Softbank would reap a cool $8 billion+ gain on its investments in Coupang.</p></div>

According to Bloomberg, it reported that Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO as soon as 2Q 2021. The estimated valuation of Coupang could be at least $30 billion. Softbank invested $2.7 billion in Coupang and Softbank (Vision Fund) currently has a 37% stake in the company. If Mr. Market is willing to place a $30 billion valuation on Coupang, Softbank would reap a cool $8 billion+ gain on its investments in Coupang.

Initial Thoughts on the Coupang IPO & Impact on SK Telecom (11st) Vs. Naver

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

<div>While the details are scarce, local press is reporting that SKT and AMZN has been in talks for more than a year and would allow really an export/import biz on both of their channels (ie Korean products to be bought by US consumers and US products to be bought thru 11th St (SK's ecommerce portal) for Koreans. </div><div></div><div>This can't be good for the ecommerce players in Korea.  In the US, if you hear that AMZN is coming in whatever business, the whole sector falls.   Is Naver next? </div>

While the details are scarce, local press is reporting that SKT and AMZN has been in talks for more than a year and would allow really an export/import biz on both of their channels (ie Korean products to be bought by US consumers and US products to be bought thru 11th St (SK's ecommerce portal) for Koreans. This can't be good for the ecommerce players in Korea.  In the US, if you hear that AMZN is coming in whatever business, the whole sector falls.   Is Naver next? 

AMZN into Korea - "We Are Not Here to Take Part, We're Here to Take Over!"

<p>In this insight, we provide an updated valuation of <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>. We believe now is the time to go Underweight on Naver Corp, which is up 51% YTD versus KOSPI which is up 16% in the same period.</p><p>There are three major reasons why we believe investors should Underweight Naver Corp now.</p><ul>
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<strong>First,</strong> our valuation analysis suggests that Naver Corp shares are overvalued.</li>
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<strong>Second</strong>, we believe there could be a major shift in capital allocations away from some of the biggest beneficiaries of COVID-19 this year.</li>
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<strong>Third,</strong> we believe the new partnership between Amazon &amp; 11st could pose a greater competitive threat to the entire e-commerce industry, negatively impacting Naver's e-commerce business.</li>
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In this insight, we provide an updated valuation of Naver Corp (035420 KS). We believe now is the time to go Underweight on Naver Corp, which is up 51% YTD versus KOSPI which is up 16% in the same period.There are three major reasons why we believe investors should Underweight Naver Corp now.

First, our valuation analysis suggests that Naver Corp shares are overvalued.

Second, we believe there could be a major shift in capital allocations away from some of the biggest beneficiaries of COVID-19 this year.

Third, we believe the new partnership between Amazon &amp; 11st could pose a greater competitive threat to the entire e-commerce industry, negatively impacting Naver's e-commerce business.


Naver - Time to Go Underweight (Covid Recovery + Amazon)

<p>We believe now is the time to go Underweight on Kakao Corp, which has been one of the best-performing stocks in KOSPI this year.</p><p>There are two major reasons why we believe investors should Underweight Kakao Corp now. <strong>First,</strong> our SoTP valuation analysis suggests Kakao Corp shares are overvalued. <strong>Second</strong>, the fact that there are now two credible vaccines against COVID-19 including those developed by Moderna and Pfizer which suggests that COVID-19 could become more manageable and less deadly around the world in 2021. One of the key reasons why Kakao Corp's shares soared this year has been due to the continued concerns about COVID-19 and the company's strengths in digital, "non-contact" business areas including online games, fintech, and other digital services. COVID-19 has actually accelerated the numerous businesses of Kakao Corp and its affiliates and pushed up its share price this year. </p><p><strong>Our base case valuation of Kakao Corp suggests an implied value of 296,066 won per share, representing an 18.2% downside risk from current levels.</strong> The SoTP valuation is broken down into the company's investments in a) public companies, b) private companies, c) Kakao Corp's core business, d) net cash and e) holdco discount. </p>

We believe now is the time to go Underweight on Kakao Corp, which has been one of the best-performing stocks in KOSPI this year.There are two major reasons why we believe investors should Underweight Kakao Corp now. First, our SoTP valuation analysis suggests Kakao Corp shares are overvalued. Second, the fact that there are now two credible vaccines against COVID-19 including those developed by Moderna and Pfizer which suggests that COVID-19 could become more manageable and less deadly around the world in 2021. One of the key reasons why Kakao Corp's shares soared this year has been due to the continued concerns about COVID-19 and the company's strengths in digital, "non-contact" business areas including online games, fintech, and other digital services. COVID-19 has actually accelerated the numerous businesses of Kakao Corp and its affiliates and pushed up its share price this year. Our base case valuation of Kakao Corp suggests an implied value of 296,066 won per share, representing an 18.2% downside risk from current levels. The SoTP valuation is broken down into the company's investments in a) public companies, b) private companies, c) Kakao Corp's core business, d) net cash and e) holdco discount. 

Kakao Corp SoTP Valuation - Time To Go Underweight

South Korea

Naver Corp. provides Internet site with web portal services, such as search engine, online game and content development.  The Company also offers marketing service through text and banner advertisement.

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Naver Corp (035420 KS)

CJ Logistics: Still Lacking Focus, Still Unlikely to Reach 6,000+ EPS Any Time Soon

We check in on CJ Logistics, which appears to have pivoted away from its much-hyped international expansion plan from a few years ago. What hasn't...

Tracking Traffic

Initial Thoughts on the Coupang IPO & Impact on SK Telecom (11st) Vs. Naver

According to Bloomberg, it reported that Coupang is getting ready to complete its IPO as soon as 2Q 2021. The estimated valuation of Coupang could...

Douglas Kim

AMZN into Korea - "We Are Not Here to Take Part, We're Here to Take Over!"

I guess the Koreans aren't scared of Amazon's entry into the ecommerce space! I'm a seller of Naver here on the news that Amazon will come into...

Ken S. Kim

Naver - Time to Go Underweight (Covid Recovery + Amazon)

In this insight, we provide an updated valuation of Naver Corp (035420 KS). We believe now is the time to go Underweight on Naver Corp, which is up...

Douglas Kim

Kakao Corp SoTP Valuation - Time To Go Underweight

We believe now is the time to go Underweight on Kakao Corp. Our base case valuation suggests an implied value of 296,066 won per share,...

Douglas Kim

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