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Coupang, Inc. (CPNG) RSS Feed

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Coupang, Inc.  

(6) COUPANG IPO ANALYSIS FROM A KOREAN! - The Only Video You Need ($CPNG 2021 Stock Review) - YouTube

 

The largest e-commerce company in South Korea, Coupang (ticker: CPNG), went public this past week in spectacular fashion. It now ranks as the country’s second-largest publicly held company, trailing only (005930) It was the biggest U.S. initial public offering by a foreign issuer since (9988) in 2014, and the biggest U.S. new issue of any kind since (UBER) in 2019. Founded in 2010 by Harvard Business School dropout Bom Kim, Coupang has become a huge force in the South Korean economy.

The largest e-commerce company in South Korea, Coupang (ticker: CPNG), went public this past week in spectacular fashion. It now ranks as the country’s second-largest publicly held company, trailing only Samsung Electronics. It was the biggest U.S. initial public offering by a foreign issuer since Alibaba Group Holding in 2014, and the biggest U.S. new issue of any kind since Uber Technologies in 2019.

Founded in 2010 by Harvard Business School dropout Bom Kim, Coupang has become a huge force in the South Korean economy. The company accounts for 4% of the country’s consumer commerce, with a broad array of online retailing services: Think Amazon.com plus Instacart, DoorDash, and Netflix. Coupang has about 50,000 employees and expects to hire another 50,000 Koreans by 2025.

Coupang may be like Amazon, but it has important geographical advantages. South Korea is a tech-savvy, superdense, highly populated country of more than 50 million people. Eric Kim, who sat on the Coupang board from 2011 to 2017 while a managing director at Maverick Capital, an investor in the company, notes that South Korea has about the same land mass as Indiana—but almost 10 times the population. Take out the uninhabitable mountain regions, he adds, and all of those people are jammed into an area the size of Rhode Island.

That high density helps make Coupang superresponsive. The company has 25 million square feet of warehouse space, spread over 100 locations in more than 30 cities. Coupang says that 70% of Koreans live within seven miles of one of its distribution centers. Almost anything can be ordered same-day, and “dawn delivery” assures that goods ordered by midnight are delivered by 7 a.m.

Coupang has also eliminated the need for cardboard boxes and bubble wrap for 75% of deliveries. (Let’s see you do that, Amazon.) Coupang Fresh, the company’s market-leading online grocery service, ships goods in reusable containers—leave them by the door and they are whisked away by one of Coupang’s 15,000 delivery staff members for reuse. Returning goods? Leave them outside your door—no special packaging or printed label required.

Coupang had 2020 revenue of $12 billion, up 91% from the previous year, as the pandemic helped accelerate growth from 55% in 2019 and 69% in 2018. Growth was above 90% in each of the past four quarters.

While not profitable yet, the company is getting close. Coupang’s profit margin, as measured by adjusted earnings before interest, taxes, depreciation, and amortization, was minus 2.1% last year, versus minus 8.8% the previous year. And that reflects some unusual costs to protect workers from the pandemic.

 

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