As of early July, South Korean e-commerce company Coupang (NYSE:CPNG) had the biggest initial public offering (IPO) of 2021. However, CPNG stock’s post-IPO performance hasn’t been stellar.
The second-biggest IPO this year was held by none other than Didi Global (NYSE:DIDI). Lately, though, that company has famously been the target of cybersecurity crackdowns by the Chinese government.
Didi and a number of other China-based companies have struggled due to the governments harsh scrutiny, restrictions and penalties. There might be a “buy when there’s blood on the streets” trade here, but not every investor wants to get involved.
Yet, some folks still want to capitalize on Asia’s ripe monetization opportunities, particularly in the field of e-commerce. That’s where Coupang comes in. So, let’s start our discussion today with a bit of technical analysis.
A Closer Look at CPNG Stock
Going back to the beginning, Coupang filed for its initial public offering on Feb. 12. As I alluded to earlier, this was the biggest U.S. IPO of the year at that time.
CPNG stock shot up on its first day of public trading on Mar. 11. The stock closed that day at $49.65, around 40% higher than the stock’s IPO price of $35 according to Yahoo! Finance.
With a little bit of hype-fuel still in the tank, the bulls managed to push the share price even higher on the next day. Coupang shares opened at $52.54 on Mar. 12, but the price declined over the ensuing months.
At the end of July, CPNG stock was down to $36.32. Whether this is a problem or an opportunity depends on your perspective.
If you believe in Coupang’s future and like to buy stocks at reduced price points, then this could be your chance to take a long position with confidence. As of Aug. 5, CPNG trades around the $39 mark.
Coupang’s Strong Position in Asia
Before we go further, I should clarify something; please don’t misunderstand my earlier comments about Didi and other China-based companies. It’s fine to invest in them. You just need to be aware of what you’re getting into.
To use Didi as an example, China’s regulators have “prohibited new downloads of the company’s app.” It has also been reported that regulators are considering the Didi IPO as a “deliberate act of deceit.”
Meanwhile, Coupang — which is based in South Korea — doesn’t have these problems. Indeed, it appears that Coupang is thriving and expanding. For example, the e-commerce company’s first-quarter 2021 revenue increased 74% year-over-year (YOY) to a whopping $4.2 billion.
Moreover, Coupang had $4 billion in cash at the end of Q1 2021. So, financially speaking, this contender is in a position of strength. Plus, it’s in expansion mode — not just fiscally, but also geographically.
Branching Out
Beyond South Korea, CPNG stock stands to gain from the company branching out into three more Asian markets.
For instance, not long ago, the company finished hiring senior-level executives in Singapore and was reportedly set to begin operations there.
Singapore’s total population is below 6 million. However, the people of Singapore are known to be highly tech-literate, so an e-commerce company like CPNG should be a great fit for this market.
Moreover, Coupang has also launched operations in Japan — specifically in Tokyo’s Shinagawa Ward, according to Nikkei Asia — with a focus on food delivery. Japan represents a vast market, with well over 126 million citizens.
Finally, on top of all that, the company recently started offering on-demand delivery through its app in Taiwan, specifically in Taipei City. Through this service, the company’s Taiwan-based customers are able to purchase food, beverages, pet supplies and daily necessities for prompt delivery.
The Bottom Line on CPNG Stock
All things considered, I honestly find it baffling that CPNG stock ran out of gas so quickly.
The facts show that Coupang is doing well financially — and is branching out into multiple Asian markets.
Most importantly, though, the company provides access to the region without being the target of Chinese regulators. That’s a problem that many investors, understandably, would rather not deal with.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
