Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past several years.</li>
<li>Amid continued weak economy in Korea in the past several years, Daiso has thrived through its detailed execution of focus on low priced products with highest value to consumers.</li>
<li>Able C&amp;C (078520 KS) is a prime example a company capitalizing on the strong demand for cosmetic products at Daiso. </li>
</ul>


I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past several years.
Amid continued weak economy in Korea in the past several years, Daiso has thrived through its detailed execution of focus on low priced products with highest value to consumers.
Able C&amp;C (078520 KS) is a prime example a company capitalizing on the strong demand for cosmetic products at Daiso. 


A Visit to Daiso in Seoul - A Retail Giant Crushing the Competition

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul>
<li>Coupang’s latest quarter reflected a business with durable operating strengths but also a clear near-term disruption tied to the late-2025 data incident.</li>
<li>Management indicated that Product Commerce revenue growth slowed materially as customer behavior weakened in December, with constant-currency growth falling below the prior quarter and bottoming in January before beginning to improve in February.</li>
<li>Active customers and WOW membership were also affected, with elevated churn and softer account activity during the period.</li>
</ul>


Coupang’s latest quarter reflected a business with durable operating strengths but also a clear near-term disruption tied to the late-2025 data incident.
Management indicated that Product Commerce revenue growth slowed materially as customer behavior weakened in December, with constant-currency growth falling below the prior quarter and bottoming in January before beginning to improve in February.
Active customers and WOW membership were also affected, with elevated churn and softer account activity during the period.


Coupang’s Marketplace Expansion & Fulfillment Power — The Hidden Engine Behind Its Retail Scale!

Thematic (Sector/Industry)

<ul>
<li>There are signs that the South Korean REIT market may have bottomed in the past 3-6 months after significant market underperformance from 2021 to 4Q 2023.</li>
<li>The 16 major Korean REIT stocks are up on average 5% YTD, outperforming KOSPI which is up 1.4% in the same period.</li>
<li>Differential in REIT dividend yield/Korean bond yield, meaningful discount to NAV, and increased capital allocation from Corporate Value Up program have been driving outperformance of Korean REIT stocks this year.</li>
</ul>


There are signs that the South Korean REIT market may have bottomed in the past 3-6 months after significant market underperformance from 2021 to 4Q 2023.
The 16 major Korean REIT stocks are up on average 5% YTD, outperforming KOSPI which is up 1.4% in the same period.
Differential in REIT dividend yield/Korean bond yield, meaningful discount to NAV, and increased capital allocation from Corporate Value Up program have been driving outperformance of Korean REIT stocks this year.


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

<ul>
<li>We expect Shopee's competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.</li>
<li>Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.</li>
<li>We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee's growth expectations for the next 3 years.</li>
</ul>


We expect Shopee's competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.
Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.
We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee's growth expectations for the next 3 years.


[Sea (SE US, SELL, TP US$51) TP Change]: Competitive Landscape Intensifying… Cut TP to $51

<ul>
<li>AliExpress has prioritized South Korea. We expect AliExpress’ South Korea GMV to increase 150%~ YoY to about US 1bn in 2023, or about 3% of Coupang’s. </li>
<li>We found that AliExpress has more overlap with CPNG’s key products rather than Naver. The average price of recommended items on AliExpress was 65%~ cheaper than CPNG in our sample; </li>
<li>We lower our CPNG GMV est. by 2%/3% in 2023/2024. We downgrade CPNG to SELL and lower its TP to US$ 15.1. </li>
</ul>


AliExpress has prioritized South Korea. We expect AliExpress’ South Korea GMV to increase 150%~ YoY to about US 1bn in 2023, or about 3% of Coupang’s. 
We found that AliExpress has more overlap with CPNG’s key products rather than Naver. The average price of recommended items on AliExpress was 65%~ cheaper than CPNG in our sample; 
We lower our CPNG GMV est. by 2%/3% in 2023/2024. We downgrade CPNG to SELL and lower its TP to US$ 15.1. 


Coupang(CPNG US, SELL, TP US$15.1) Rating Change: Facing More Competition from AliExpress,DG to Sell

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)

A Visit to Daiso in Seoul - A Retail Giant Crushing the Competition

I recently visited Daiso near Seoul Station. Daiso is one of the few off-line stores that has been crushing the competition in Korea in the past...

Douglas Kim

Coupang’s Marketplace Expansion & Fulfillment Power — The Hidden Engine Behind Its Retail Scale!

Coupang’s latest quarter reflected a business with durable operating strengths but also a clear near-term disruption tied to the late-2025 data...

Baptista Research

South Korean REITs May Have Bottomed

There are signs that the South Korean REIT market may have bottomed in the past 3-6 months after significant market underperformance from 2021 to...

Douglas Kim

[Sea (SE US, SELL, TP US$51) TP Change]: Competitive Landscape Intensifying… Cut TP to $51

We expect Shopee's competitive landscape further deteriorated in 2Q23, due to increased pressure from TikTok and Lazada in ASEAN, Coupang in...

Blue Lotus Research Institute

Coupang(CPNG US, SELL, TP US$15.1) Rating Change: Facing More Competition from AliExpress,DG to Sell

AliExpress has prioritized South Korea. We expect AliExpress’ South Korea GMV to increase 150%~ YoY to about US 1bn in 2023, or about 3% of Coupang’s.

Blue Lotus Research Institute

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