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.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</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.</p></div><div><p>Coupang is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/coupang-ipo-initiation-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:48125" rel="noopener">Coupang IPO Initiation: Delivering the Goods</a>, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>

Coupang (CPNG US) 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.Coupang is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. In Coupang IPO Initiation: Delivering the Goods, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<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

<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

<div class="content-highlight">
<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. 


Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>  posted a sharp improvement in sales at Rakuten Ichiba in 2020 as customers flocked to the e-commerce platform in lieu of shopping at physical stores. Based on our estimates, Rakuten and Amazon are pretty much neck and neck for leadership in e-commerce in Japan.</p>
<p>Going forward, Rakuten is hoping that the growth in cross-use of its e-commerce service by its new mobile subscriber base will continue as it works further to improve fulfilment reliability and coverage both alone and through its new joint venture with Japan Post.</p>
<p>In recognition of the increasing diversity of the company’s businesses, Rakuten will change its name to Rakuten Group from April.</p>

Rakuten Inc (4755 JP)  posted a sharp improvement in sales at Rakuten Ichiba in 2020 as customers flocked to the e-commerce platform in lieu of shopping at physical stores. Based on our estimates, Rakuten and Amazon are pretty much neck and neck for leadership in e-commerce in Japan.
Going forward, Rakuten is hoping that the growth in cross-use of its e-commerce service by its new mobile subscriber base will continue as it works further to improve fulfilment reliability and coverage both alone and through its new joint venture with Japan Post.
In recognition of the increasing diversity of the company’s businesses, Rakuten will change its name to Rakuten Group from April.

United States

Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company's products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

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Amazon (AMZN US)

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