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>Sea's share price rose 14% yesterday after beating consensus revenue by 1.4%, but this seems unwarranted as Sea lowered the lower-end of the e-commerce revenue guidance by $400m to $8.5bn.</li>
<li>Nonetheless, most of this price reaction could be short covering as <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>’s results were rather disappointing on multiple fronts.</li>
<li>With Free Fire faltering fast, we think Sea could get washed back to rough seas before reaching calm waters.  </li>
</ul>


Sea's share price rose 14% yesterday after beating consensus revenue by 1.4%, but this seems unwarranted as Sea lowered the lower-end of the e-commerce revenue guidance by $400m to $8.5bn.
Nonetheless, most of this price reaction could be short covering as Sea Ltd (SE US)’s results were rather disappointing on multiple fronts.
With Free Fire faltering fast, we think Sea could get washed back to rough seas before reaching calm waters.  


<ul>
<li>
<a href="https://www.smartkarma.com/entities/coupang-inc" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a>’s 1Q22 results were mixed with revenue 2.5% below consensus but an operating loss of $205.7m was $94.3m lower than consensus through a 3% gross margin improvement.</li>
<li>The company’s comments on the gross margin outlook are a bit concerning and make us think that the improvement in Q1 was just a one-off.</li>
<li>Coupang is fundamentally expensive on EV/GMV+Retail Sales. With selling pressure from Softbank and a significant downside to revenue estimates, we remain Short Coupang.</li>
</ul>



Coupang (CPNG US)’s 1Q22 results were mixed with revenue 2.5% below consensus but an operating loss of $205.7m was $94.3m lower than consensus through a 3% gross margin improvement.
The company’s comments on the gross margin outlook are a bit concerning and make us think that the improvement in Q1 was just a one-off.
Coupang is fundamentally expensive on EV/GMV+Retail Sales. With selling pressure from Softbank and a significant downside to revenue estimates, we remain Short Coupang.


Coupang: Decelerating Revenue, Sporadic Profitability and Still Expensive

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Coupang reported better than expected results in 1Q 2022. Coupang had operating loss of $205.7 million in 1Q 2022, which was 31% better than consensus. </li>
<li>This is a High Conviction turnaround story marked by significant improvement in profit margins. The company's gross profit increased by an impressive 42% YoY. </li>
<li>Given Coupang's excellent earnings in 1Q 2022, the tide has turned on Coupang and there is likely to be improving positive sentiment on this stock in the next several weeks.</li>
</ul>


Coupang reported better than expected results in 1Q 2022. Coupang had operating loss of $205.7 million in 1Q 2022, which was 31% better than consensus. 
This is a High Conviction turnaround story marked by significant improvement in profit margins. The company's gross profit increased by an impressive 42% YoY. 
Given Coupang's excellent earnings in 1Q 2022, the tide has turned on Coupang and there is likely to be improving positive sentiment on this stock in the next several weeks.


Coupang 1Q 2022 Earnings: Beats Consensus Earnings Estimates (A High Conviction Turnaround Play)

<ul>
<li>We have been Bearish on Coupang since 12 May 2021. Now we are turning Positive since we believe the valuations have become a lot more attractive. </li>
<li>We highlight four major factors that could result in higher profit margins for Coupang in 2022 including competitors exiting early dawn service, lower COVID and EATS related costs. </li>
<li>Our base case valuation of Coupang is implied market cap of $24.9 billion and target price of $14.1 per share, representing 32% upside from current levels.</li>
</ul>


We have been Bearish on Coupang since 12 May 2021. Now we are turning Positive since we believe the valuations have become a lot more attractive. 
We highlight four major factors that could result in higher profit margins for Coupang in 2022 including competitors exiting early dawn service, lower COVID and EATS related costs. 
Our base case valuation of Coupang is implied market cap of $24.9 billion and target price of $14.1 per share, representing 32% upside from current levels.


Coupang: Four Major Factors to Drive Higher Profit Margins in 2022

<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

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)

Sea Ltd: In Rough Seas

Sea's share price rose 14% yesterday after beating consensus revenue by 1.4%, but this seems unwarranted as Sea lowered the lower-end of the e...

Oshadhi Kumarasiri

Coupang: Decelerating Revenue, Sporadic Profitability and Still Expensive

Coupang's comments on the gross margin outlook are a bit concerning and make us think that the improvement in Q1 was just a one-off. Meantime, the...

Oshadhi Kumarasiri

Coupang 1Q 2022 Earnings: Beats Consensus Earnings Estimates (A High Conviction Turnaround Play)

Given Coupang's excellent earnings in 1Q 2022, the tide has turned on Coupang and there is likely to be improving positive sentiment on this stock...

Douglas Kim

Coupang: Four Major Factors to Drive Higher Profit Margins in 2022

We have been Bearish on Coupang since 12 May 2021. Now we are turning Positive since we believe the valuations have become a lot more attractive.

Douglas Kim

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

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