Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Lotte Shopping is a deep value stock poised for a turnaround. </li>
<li>Lotte Shopping has clear turnaround catalysts, cheap valuations, and a solid technical setup. </li>
<li>Perhaps the most important catalysts for Lotte Shopping include getting rid of the most restrictions/social distancing measures related to COVID-19 which have been in place in the past three years.</li>
</ul>


Lotte Shopping is a deep value stock poised for a turnaround. 
Lotte Shopping has clear turnaround catalysts, cheap valuations, and a solid technical setup. 
Perhaps the most important catalysts for Lotte Shopping include getting rid of the most restrictions/social distancing measures related to COVID-19 which have been in place in the past three years.


Lotte Shopping: A Deep Value Stock Poised for a Turnaround

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>Alibaba is up 20% QTD and the public Vision Fund portfolio is on track for its first positive quarter in almost two years thanks to China upside, mostly for Didi</li>
<li>That has kept the share price elevated even as the discount to fair value has expanded since buybacks ended at Q2 results</li>
<li>At 34% now, there is room for the discount to expand further as the range before the buyback surge was generally closer to 40%</li>
</ul>


Alibaba is up 20% QTD and the public Vision Fund portfolio is on track for its first positive quarter in almost two years thanks to China upside, mostly for Didi
That has kept the share price elevated even as the discount to fair value has expanded since buybacks ended at Q2 results
At 34% now, there is room for the discount to expand further as the range before the buyback surge was generally closer to 40%


Softbank Group - China Rebound Has Helped After End-Of-Buyback Hangover

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/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">ATRenew (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. </li>
<li>The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.</li>
<li>The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.</li>
</ul>



ATRenew (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. 
The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.
The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.


ATRenew (RERE US): Pre-Owned Satisfaction

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.

<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

<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

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)

Lotte Shopping: A Deep Value Stock Poised for a Turnaround

Lotte Shopping is a deep value stock in Korea with key catalysts for a turnaround in 2023. Lotte Shopping currently has a market cap of 2.5...

Douglas Kim

Softbank Group - China Rebound Has Helped After End-Of-Buyback Hangover

A China re-rating has boosted the value of Alibaba and could help Vision Fund deliver its first positive quarter in almost two years but the...

Kirk Boodry

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

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

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52-week Range

Market Cap (USDm)

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Lotte Shopping: A Deep Value Stock Poised for a Turnaround

Lotte Shopping is a deep value stock in Korea with key catalysts for a turnaround in 2023. Lotte Shopping currently has a market cap of 2.5...

Douglas Kim

Softbank Group - China Rebound Has Helped After End-Of-Buyback Hangover

A China re-rating has boosted the value of Alibaba and could help Vision Fund deliver its first positive quarter in almost two years but the...

Kirk Boodry

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

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