Coupang Inc.

This is our first report on South Korean e-commerce giant, Coupang Inc. The company delivered an all-around beat in the most recent quarterly result. The company observed an acceleration in revenue and active customer growth, particularly noteworthy for the rapid acceleration in active customer numbers. This growth is a testament to Coupang’s unique value proposition in a retail market that high prices and limited selection have traditionally characterized. The quarter also brought significant milestones, with over $2 billion in operating cash flow and $1 billion in free cash flow over the trailing 12 months. Coupang reported its fourth consecutive quarter of substantial GAAP profitability, recording $145 million of net income in Q2. Beyond core offerings, newer categories like fashion and beauty experienced even more rapid growth. Third-party sales, along with emerging merchant services, saw notable expansion. Initiatives like Eats and the Taiwan market have demonstrated promise and potential. Coupang remains steadfast in its approach to disciplined capital allocation and delivering long-term shareholder value. Coupang’s disciplined execution across its business segments resulted in record-breaking net revenues, substantial gross profit growth, and an all-time high net income. Gross profit margins continued to improve, and operational efficiencies contributed to cost reductions. The company’s adjusted EBITDA also reached new heights, with the core product commerce segment displaying a robust margin. We initiate coverage on the stock with a ‘Buy’ rating.