Coupang Inc
Coupang, Inc. (NYSE: CPNG) owns and operates an e-commerce business, which primarily serves the Korean retail market. Through its mobile applications and Internet Websites, the Company offers products and services that span a range of categories, including home goods and decor, apparel and beauty products, fresh food and grocery, sporting goods, electronics, everyday consumables, travel, restaurant order and delivery, content streaming, and advertising. It operates through two segments: Product Commerce and Developing Offerings.
Recent Financial and Business Updates:
Q2 2023 Notable Financial and Operational Achievements
Overall Performance:
- Net revenues reached USD 5.8 billion, signifying a 16% year-over-year increase on a reported basis and a significant 21% increase on an FX-neutral basis.
- The growth rate in revenue would have been roughly 300 basis points higher than the 21% growth rate if not for the accounting change in FLC revenue, now recorded on a net basis starting from Q2 2023.
- Gross profit surged by 32% year-over-year, amounting to USD 1.5 billion.
- Gross profit margin displayed a notable improvement, standing at 26.1%, which reflects a 320 basis points increase year-over-year. The accounting alteration in FLC revenue this quarter had a positive impact of 100 basis points.
- Net income amounted to USD 145 million, yielding a margin of 2.5%, indicating a noteworthy improvement of USD 221 million compared to the previous year.
- Adjusted EBITDA stood at USD 300 million, with a margin of 5.1%, showcasing a significant improvement of 380 basis points over the previous year.
- Earnings per share (EPS) reached USD 0.08, indicating a notable increase of USD 0.12 year-over-year.
- Operating cash flow for the trailing twelve months surged to USD 2.0 billion, marking a substantial increase of USD 2.3 billion compared to the previous year.
- Free cash flow for the trailing twelve months amounted to USD 1.1 billion, reflecting a remarkable increase of USD 2.2 billion year-over-year.
- Active customer growth demonstrated a solid increase, standing at 10% year-over-year, with a total of 19.7 million active customers.
Segmental Highlights:
- Net revenues for the Product Commerce segment reached USD 5.7 billion, reflecting a 16% year-over-year increase on a reported basis and a substantial 21% increase on an FX-neutral basis.
- Adjusted EBITDA for the Product Commerce segment amounted to USD 408 million, showcasing a substantial increase of USD 310 million year-over-year.
- The adjusted EBITDA margin for the Product Commerce segment exhibited a notable improvement, reaching 7.2%, reflecting a substantial increase of 520 basis points year-over-year.
- In contrast, the Developing Offerings segment (comprising International, Coupang Eats, Play, and Fintech) reported a negative adjusted EBITDA of USD 107 million.
Technical Observation (on the daily chart)
Currently, the stock is currently near an important resistance level of USD 20.00-USD 22.00, after giving a break due to Q2FY23 results announcement. A retracement and retest of USD 17 levels is expected before a move towards upside. The RSI (14 period) momentum indicator is at an overbought value of 70.44, with expectations of further consolidation or a short-term correction. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels respectively.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, expectations of results announcement, and technical indicators analysis, a ‘Watch’ rating has been given to Coupang, Inc. (NYSE: CPNG) at the current market price of USD 19.38 as of August 09, 2023, at 09:30 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is August 09, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services. Please note past performance is neither an indicator nor a guarantee of future performance.
Please also read our Terms & Conditions and Financial Services Guide for further information.
Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website including entities covered in this Report.