Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>In December 2022, Naver plans to launch its long awaited 24 hours delivery service (Naver Arrival Guarantee Solution), competing directly against Coupang's "rocket delivery" services in Korea.</li>
<li>Coupang's valuations are not attractive at current levels and the heightened competition in the 24 hour delivery service market from Naver/CJ Logistics is likely to negatively impact Coupang. </li>
<li>By providing 24 hours quick delivery service, Naver is expected to take away market share from Coupang from the fast delivery services in Korea.</li>
</ul>


In December 2022, Naver plans to launch its long awaited 24 hours delivery service (Naver Arrival Guarantee Solution), competing directly against Coupang's "rocket delivery" services in Korea.
Coupang's valuations are not attractive at current levels and the heightened competition in the 24 hour delivery service market from Naver/CJ Logistics is likely to negatively impact Coupang. 
By providing 24 hours quick delivery service, Naver is expected to take away market share from Coupang from the fast delivery services in Korea.


Coupang: Market Share Loss Likely Due to Launch of Naver's 24 Hours Next Day Delivery Service

<ul>
<li>CJ Cheiljedang (097950 KS) reported better than expected earnings in 1Q 2022 and we continue to have a POSITIVE view of this stock.</li>
<li>Bio business sales increased by 39.3% YoY to 1.08 trillion won and operating profit jumped by 128% YoY 175.8 billion won in 1Q 2022, driven by strong demand for lysine. </li>
<li>We also like a pair trade between CJ Cheiljedang and CJ Logistics at current prices. We recommend on going long on CJ Cheiljedang and going short on CJ Logistics.</li>
</ul>


CJ Cheiljedang (097950 KS) reported better than expected earnings in 1Q 2022 and we continue to have a POSITIVE view of this stock.
Bio business sales increased by 39.3% YoY to 1.08 trillion won and operating profit jumped by 128% YoY 175.8 billion won in 1Q 2022, driven by strong demand for lysine. 
We also like a pair trade between CJ Cheiljedang and CJ Logistics at current prices. We recommend on going long on CJ Cheiljedang and going short on CJ Logistics.


A Pair Trade Between CJ Cheiljedang and CJ Logistics

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delhivery-pvt-ltd" target="_blank" data-smartkarma-citation="entities:33471:1" rel="noopener">Delhivery (1058656D IN)</a> is the largest and fastest-growing 3PL express parcel delivery player in India. It will launch its Rs52.4 billion ($0.7 billion) IPO on 11 May.</li>
<li>In <a href="https://www.smartkarma.com/insights/delhivery-ipo-yet-to-convincingly-deliver" target="_blank" data-smartkarma-citation="insights:69440" rel="noopener">Delhivery IPO: Yet to Convincingly Deliver</a>, we noted that the negatives outweigh the positives.  </li>
<li>In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range. </li>
</ul>



Delhivery (1058656D IN) is the largest and fastest-growing 3PL express parcel delivery player in India. It will launch its Rs52.4 billion ($0.7 billion) IPO on 11 May.
In Delhivery IPO: Yet to Convincingly Deliver, we noted that the negatives outweigh the positives.  
In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range. 


<ul>
<li>CJ Logistics, the largest logistics company in Korea, is facing four major headwinds which are likely to result in further downside risk for the stock in the next 6-12 months.</li>
<li>The four major headwinds include greater competition from Coupang (CPNG US), lower e-commerce demand (parcel delivery), higher fuel prices, and higher interest rates.</li>
<li>Amid the four major challenges, we believe the consensus earnings estimates are overly aggressive and they are likely to be revised down further in the next several months. </li>
</ul>


CJ Logistics, the largest logistics company in Korea, is facing four major headwinds which are likely to result in further downside risk for the stock in the next 6-12 months.
The four major headwinds include greater competition from Coupang (CPNG US), lower e-commerce demand (parcel delivery), higher fuel prices, and higher interest rates.
Amid the four major challenges, we believe the consensus earnings estimates are overly aggressive and they are likely to be revised down further in the next several months. 


CJ Logistics: Four Major Headwinds Suggests Further Downside Risk

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>Three local indexes in Korea face rebalancing trading on March 10, supposedly at the close.</li>
<li>They are 1. KOSPI 200 Fast Entry for LG Energy Solution, 2. KOSPI Size Index Series biannual rebalancing, and 3. KRX BBIG K-New Deal biannual rebalancing.</li>
<li>There are 18 stocks in total, which have an estimated passive flow of ±0.5x ADTV &amp; an average daily trade value of +₩5.0B.</li>
</ul>


Three local indexes in Korea face rebalancing trading on March 10, supposedly at the close.
They are 1. KOSPI 200 Fast Entry for LG Energy Solution, 2. KOSPI Size Index Series biannual rebalancing, and 3. KRX BBIG K-New Deal biannual rebalancing.
There are 18 stocks in total, which have an estimated passive flow of ±0.5x ADTV &amp; an average daily trade value of +₩5.0B.


Combined Rebalancing Flow Estimations of Three Indexes in Korea on March 10

South Korea

CJ Logistics Corporation provides logistics services. The Company provides land transportation, maritime transportation, harbor unloading, cargo storage, international logistics processing, and other services. CJ Logistics also provides internet home shopping services. CJ Logistics serves customers worldwide.

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CJ Logistics (000120 KS)

A Pair Trade Between CJ Cheiljedang and CJ Logistics

CJ Cheiljedang reported better than expected earnings in 1Q 2022. We recommend going long CJ Cheiljedang and going short on CJ Logistics.

Douglas Kim

Delhivery IPO: Valuation Insights

In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range. Our recommendation is to...

Arun George

CJ Logistics: Four Major Headwinds Suggests Further Downside Risk

CJ Logistics faces four major headwinds including greater competition from Coupang (CPNG US), lower e-commerce demand (parcel delivery), higher...

Douglas Kim

Combined Rebalancing Flow Estimations of Three Indexes in Korea on March 10

This post estimates the combined rebalancing flows of Korea's three local indexes, which should be seen on March 10, supposedly at the close.

Sanghyun Park

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52-week Range

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Coupang: Market Share Loss Likely Due to Launch of Naver's 24 Hours Next Day Delivery Service

Coupang's valuations are not attractive at current levels and the heightened competition in the 24 hour delivery service market from Naver/CJ...

Douglas Kim

A Pair Trade Between CJ Cheiljedang and CJ Logistics

CJ Cheiljedang reported better than expected earnings in 1Q 2022. We recommend going long CJ Cheiljedang and going short on CJ Logistics.

Douglas Kim

Delhivery IPO: Valuation Insights

In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range. Our recommendation is to...

Arun George

CJ Logistics: Four Major Headwinds Suggests Further Downside Risk

CJ Logistics faces four major headwinds including greater competition from Coupang (CPNG US), lower e-commerce demand (parcel delivery), higher...

Douglas Kim

Combined Rebalancing Flow Estimations of Three Indexes in Korea on March 10

This post estimates the combined rebalancing flows of Korea's three local indexes, which should be seen on March 10, supposedly at the close.

Sanghyun Park