Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>South Korea’s largest e-commerce company, <a href="https://www.smartkarma.com/entities/coupang-inc" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> is no longer a growth stock with revenue expected to start falling on a YoY basis from 4Q22 onwards.</li>
<li>Therefore, we think Coupang’s current valuation, which is based on inflated revenue estimates should become redundant.</li>
<li>We think a no-growth, low-margin business like Coupang does not deserve to trade north of 10.0x OP, whereas it is currently trading at 15.6x the best-case OP estimate.</li>
</ul>


South Korea’s largest e-commerce company, Coupang (CPNG US) is no longer a growth stock with revenue expected to start falling on a YoY basis from 4Q22 onwards.
Therefore, we think Coupang’s current valuation, which is based on inflated revenue estimates should become redundant.
We think a no-growth, low-margin business like Coupang does not deserve to trade north of 10.0x OP, whereas it is currently trading at 15.6x the best-case OP estimate.


Coupang: Time Ditch EV/Sales and Focus on Profitability-Based Multiples

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<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

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>Softbank Group’s share price has been supported by the share buyback programme since late September, but 2Q FY2022 results are likely act as a negative catalyst for Softbank shares</li>
<li>Alibaba and its core listed holdings in the Vision Funds have seen market values go lower in recent months; see the diverging market price chart trends in this report</li>
<li>In addition, valuations among the unlisted holdings are also under pressure into October, so 2Q results may not capture the full extent of the down rounds</li>
</ul>


Softbank Group’s share price has been supported by the share buyback programme since late September, but 2Q FY2022 results are likely act as a negative catalyst for Softbank shares
Alibaba and its core listed holdings in the Vision Funds have seen market values go lower in recent months; see the diverging market price chart trends in this report
In addition, valuations among the unlisted holdings are also under pressure into October, so 2Q results may not capture the full extent of the down rounds


Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

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

GoTo Gojek Tokopedia Tbk PT / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (GOTO IJ)</a> confirmed that it is exploring a coordinated secondary offering of shares held by pre-IPO shareholders. The Series A shareholders’ lock-up expires on 30 November 2022. </li>
<li>The lock-up of 89.63% of the outstanding shares expires on 30 November. Within these shares, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> and <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> stakes are worth a combined US$2.6bn.</li>
<li>GoTo continues to grow but with material losses and cash burn. The shares are fairly valued but the sizeable secondary offering (US$1 billion based on reports) will pressure the price. </li>
</ul>



GoTo (GOTO IJ) confirmed that it is exploring a coordinated secondary offering of shares held by pre-IPO shareholders. The Series A shareholders’ lock-up expires on 30 November 2022. 
The lock-up of 89.63% of the outstanding shares expires on 30 November. Within these shares, Alibaba (ADR) (BABA US) and Softbank Group (9984 JP) stakes are worth a combined US$2.6bn.
GoTo continues to grow but with material losses and cash burn. The shares are fairly valued but the sizeable secondary offering (US$1 billion based on reports) will pressure the price. 


GoTo Lock-Up: A Sizeable Secondary Offering Incoming

Global Digital Niaga Tbk PT / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/global-digital-niaga-pt-blibli" target="_blank" data-smartkarma-citation="entities:34881:1" rel="noopener">Blibli (1437710D IJ)</a>, a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.</li>
<li>We have previously discussed the IPO in <a href="https://www.smartkarma.com/insights/blibli-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:82294" rel="noopener">Blibli IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/blibli-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:82376" rel="noopener">Blibli IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/blibli-vs-tokopedia-vs-bukalapak-vs-lazada-vs-shopee" target="_blank" data-smartkarma-citation="insights:82473" rel="noopener">Blibli Vs Tokopedia Vs Bukalapak Vs Lazada Vs Shopee</a>. </li>
<li>Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.</li>
</ul>



Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
We have previously discussed the IPO in Blibli IPO: The Bull Case, Blibli IPO: The Bear Case and Blibli Vs Tokopedia Vs Bukalapak Vs Lazada Vs Shopee. 
Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.


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: Time Ditch EV/Sales and Focus on Profitability-Based Multiples

We think a no-growth, low-margin business like Coupang does not deserve to trade north of 10.0x OP, whereas it is currently trading at 15.6x the...

Oshadhi Kumarasiri

Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

Softbank's share price has defied gravity of late, diverging from the trends of its listed holdings but we see clear hurdles going forward from the...

Victor Galliano

GoTo Lock-Up: A Sizeable Secondary Offering Incoming

The lock-up of 89.63% of shares expires on 30 November. The shares are fairly valued at the last close, but the sizeable secondary offering (US$1bn...

Arun George

Blibli IPO: Valuation Insights

Bookbuilding will close on 24 October. Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.

Arun George

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52-week Range

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Coupang: Time Ditch EV/Sales and Focus on Profitability-Based Multiples

We think a no-growth, low-margin business like Coupang does not deserve to trade north of 10.0x OP, whereas it is currently trading at 15.6x the...

Oshadhi Kumarasiri

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

Softbank Group (9984 JP) – Defying Gravity into 4Q 2022

Softbank's share price has defied gravity of late, diverging from the trends of its listed holdings but we see clear hurdles going forward from the...

Victor Galliano

GoTo Lock-Up: A Sizeable Secondary Offering Incoming

The lock-up of 89.63% of shares expires on 30 November. The shares are fairly valued at the last close, but the sizeable secondary offering (US$1bn...

Arun George

Blibli IPO: Valuation Insights

Bookbuilding will close on 24 October. Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.

Arun George