6. Coupang, Inc. (NYSE:CPNG)
Abrams Capital Management’s Q3 2024 Investment: $319.59 Million
Percentage of Abrams Capital Management’s Portfolio: 5.13%
Number of Hedge Fund Holders: 56
Coupang, Inc. (NYSE:CPNG) is an internet retail giant that operates retail businesses through mobile applications in South Korea. It sells various products and services in the categories of home goods and décor products, apparel, and beauty products, among others. The stock is up by more than 50% for the year. The rally stems from solid financial results that have affirmed the company’s prospects in South Korea’s retail landscape.
Coupang, Inc. (NYSE:CPNG) reported strong third-quarter results on November 5, 2024. Revenue increased by 27% to $7.9 billion, and gross profit rose by 45% to $2.3 billion. This success was due to an 11% increase in active customers, who ordered nine times more than non-core members, boosting sales.
Although the company’s product commerce EBITDA margins fell by 5%, this was because of higher spending on technology. This investment shows Coupang, Inc. (NYSE:CPNG)’s focus on sustainable growth and improving customer experience. The company is financially strong with $1.8 billion in operating cash flow and $935 million in free cash flow.
Coupang, Inc. (NYSE:CPNG) was held by 56 hedge funds in Q3 2024, as per Insider Monkey’s database.
Baron Fifth Avenue Growth Fund stated the following regarding Coupang, Inc. (NYSE:CPNG) in its first quarter 2024 investor letter:
“We also added to our position in the Korean e-commerce platform, Coupang, Inc. (NYSE:CPNG), as the company continues to execute at a high level, reporting strong financial results, with accelerating revenue growth – revenues were up 20% year-over-year in constant currency in the fourth quarter, 29% excluding the impact from Coupang’s Fulfillment and Logistics accounting change, driven by growth in its number of customers count (up 16% year-over-year), growth of its loyalty Wow members (up 27% year-over-year) and growth in spending by existing cohorts (with every cohort, including those who have used the platform for a long time, growing at least 15% year-over-year), which suggests continued wallet share gains for the company. While Coupang continues to gain market share, its attractive unit economics are beginning to appear in results, with adjusted EBITDA margins of its commerce segment reaching 7.1% in the fourth quarter (up 190bps year-over-year). Coupang is utilizing the growing profits from commerce to invest in emerging offerings such as Fulfillment and Logistics by Coupang (FLC), expansion into Taiwan (with revenues up 2 times in the last six months) and Coupang Eats, its food delivery network, which saw order volume increase by 2 times as well in the last nine months. In the last week or so, Coupang also announced a material 58% Wow membership price hike, which should flow through nicely to the bottom line, sending the stock higher by close to 20%.”
