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.

Equity Bottom-Up

<ul>
<li>Coupang Inc., an e-commerce giant based in South Korea, has reportedly shown significant advancements and growth in their latest fourth quarter earnings.</li>
<li>They boasted a year of accelerating growth, record profits and notably expanded free cash flows in business, with the creation of the ‘wow’ moments for customers deemed as the foundation to their long-term growth, profitability and in turn, shareholder value.</li>
<li>Customer growth and revenues notably accelerated every quarter in 2023, with active customers growing 16% year-over-year.</li>
</ul>


Coupang Inc., an e-commerce giant based in South Korea, has reportedly shown significant advancements and growth in their latest fourth quarter earnings.
They boasted a year of accelerating growth, record profits and notably expanded free cash flows in business, with the creation of the ‘wow’ moments for customers deemed as the foundation to their long-term growth, profitability and in turn, shareholder value.
Customer growth and revenues notably accelerated every quarter in 2023, with active customers growing 16% year-over-year.


Coupang Inc: Amplifying Luxury Retail Reach With The Farfetch Acquisition! - Major Drivers

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we discuss how Temu and AliExpress have been taking away meaningful market share away from Coupang (CPNG US) in Korea in the past year. </li>
<li>Temu's MAU skyrocketed in the past year in Korea. Temu's MAU surged from zero in January 2023 to 3.28 million as of December 2023.</li>
<li>One could argue that Coupang's valuations are overvalued relative to its Chinese competitors such as PDD Holdings (PDD US).</li>
</ul>


In this insight, we discuss how Temu and AliExpress have been taking away meaningful market share away from Coupang (CPNG US) in Korea in the past year. 
Temu's MAU skyrocketed in the past year in Korea. Temu's MAU surged from zero in January 2023 to 3.28 million as of December 2023.
One could argue that Coupang's valuations are overvalued relative to its Chinese competitors such as PDD Holdings (PDD US).


Temu and AliExpress Taking Away Meaningful Market Share from Coupang in Korea

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>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

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>CPNG will provide Farfetch with a bridge loan to save it from default. In exchange, CPNG acquires Farfetch business and its US$ 460mn+ net debt.</li>
<li>For Farfetch to achieve profitability, CPNG will need to conduct major layoffs and cancel brand deals, but both are difficult to achieve, in our view.</li>
<li>CPNG only found limited overseas success in Taiwan, and EU poses an even greater challenge. We cut TP to US$ 14.1 on increased debt and FCF burden.</li>
</ul>


CPNG will provide Farfetch with a bridge loan to save it from default. In exchange, CPNG acquires Farfetch business and its US$ 460mn+ net debt.
For Farfetch to achieve profitability, CPNG will need to conduct major layoffs and cancel brand deals, but both are difficult to achieve, in our view.
CPNG only found limited overseas success in Taiwan, and EU poses an even greater challenge. We cut TP to US$ 14.1 on increased debt and FCF burden.


[Coupang Inc. (CPNG US, SELL, TP US$14.1) TP Change]: Farfetch May Glitter, but It Isn’t Gold

Douglas Research Advisory

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.


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.

Coupang (CPNG US)

Coupang Inc: Amplifying Luxury Retail Reach With The Farfetch Acquisition! - Major Drivers

Coupang Inc., an e-commerce giant based in South Korea, has reportedly shown significant advancements and growth in their latest fourth quarter...

Baptista Research

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

[Coupang Inc. (CPNG US, SELL, TP US$14.1) TP Change]: Farfetch May Glitter, but It Isn’t Gold

CPNG saves Farfetch from default with a bridge loan, acquiring the business and its debt. Achieving profitability will require layoffs and...

Blue Lotus Research Institute

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

Coupang Inc: Amplifying Luxury Retail Reach With The Farfetch Acquisition! - Major Drivers

Coupang Inc., an e-commerce giant based in South Korea, has reportedly shown significant advancements and growth in their latest fourth quarter...

Baptista Research

Temu and AliExpress Taking Away Meaningful Market Share from Coupang in Korea

In this insight, we discuss how Temu and AliExpress have been taking away meaningful market share away from Coupang (CPNG US) in Korea in the past...

Douglas Kim

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

[Coupang Inc. (CPNG US, SELL, TP US$14.1) TP Change]: Farfetch May Glitter, but It Isn’t Gold

​CPNG saves Farfetch from default with a bridge loan, acquiring the business and its debt. Achieving profitability will require layoffs and...

Blue Lotus Research Institute

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

CPNG saves Farfetch from default with a bridge loan, acquiring the business and its debt. Achieving profitability will require layoffs and...