Korea Largest E Commerce Play- GMKT

Discussion in 'Stocks' started by stonedinvestor, Mar 21, 2007.

  1. Bad Chart Big Risk Why Do I Like GMKT?

    This review is dedicated to Biobottom.

    Monday, March 12, 2007

    comments this AM comes from Goldman Sach's Asia team on Gmarket (NASDAQ:GMKT):

    GSCO notes Gmarket's GMV guidance miss in 4Q06 disturbed them. However they view Gmarket's enterprise value of $0.6 bn as unduly small relative to the franchise value of being Korea's largest e-commerce business growing at 2X-3X the pace of the e-commerce industry with the 7th most visited website in Korea, 11 mn active users, turnover last year of $2.4 bn, revenue last year of $164 mn, revenue growth last quarter of 67% yoy, and earnings growth last quarter of 78% yoy. Firm believes that Gmarket can fundamentally earn its way back to a $20-plus stock price by reporting GMV consistent with its guidance, starting with 1Q07 GMV out either in April or upon full results on May 9.

    GSCO sees 3 non-earnings developments which might assist the stock:

    1) Yahoo! or eBay could buy stock in Gmarket: eBay acquired prior market leader Internet Auction, and Yahoo! paid $13.30 per share for 4.5 mn Gmarket shares in June 2006. With GMV around one third that of Yahoo Japan and 3X faster growing, and GMV slightly larger than Taobao, the firm views Gmarket as complementary to Yahoo's Asian marketplaces.

    2) Gmarket could boost its e-commerce share and leverage its platform by acquiring smaller Korean marketplaces.

    3) Gmarket could coordinate any overseas expansion with Yahoo!, which controls the largest marketplaces in Japan, China, and Taiwan.

    GMKT is one of the more interesting e-commerce plays outside of the U.S. The stock got hit last Friday after reporting weaker than expected results but managed to bounce nicely during the day. Note that GSCO has a Buy and $21 tgt on the stock.


    S&P Marketscope - March 09, 2007 3:19 PM ET
    Related Quotes
    Symbol Last Chg
    GMKT Trade 15.46 +0.08
    Real time quote.

    >Analyst Stephen Ju tells salesforce GMKT hit first speed bump in its life as public co., as decreased consumer activity, warmer weather in Q4 caused it to miss its gross merchandise value (GMV) guidance... Also notes gross margin fell vs. prior Q, hurt by reclassification of certain costs, consumer reward marketing activities... Cuts $0.73 '07 EPADS est. to $0.68, $0.86 '08 to $0.75; $27 target to $20... But despite Q4 miss, notes co. now commands 19% share of Korean e-commerce... Maintains outperform, as feels asset value, high-growth outlook in GMV, rev. still intact.

    >> so we have a $27 target lowered to $20 never good. And another price target remaining firm at $21. Let's assume the Roth $27 was unrealistic and merge the new Roth with the Goldman PT's and come up with $20.50. Now look at a chart not the 3 month! You'll jump off a cliff- like the stock did! Lok at the 1 year and see how it's fallen back into a safe base. If this really was a one time miss it looks like a good investment down here.

    ~ stoney
  2. S2007S


    I played this one short a while back when it was at 26-27 range, it pulled back quite a bit since.
  3. Certainly the right call S2007S. Did you feel at the time that it was a big sham? Overvalued? Or just selling the Cramer hype which is what I would have done. it seems to me I remember he did about a week on this stock every night...

    What's your take down here?
  4. Those of you who bought on my first recommendation are up 6% already great job! But stop writing! I've been playing possum as it's a bottom feed anyway and well today's 4% natural move of course is too much I'm in 700 shares.

    I could have played this better but it was one of those maddening small gain after small gain on the daily and all that could of been wiped out with just one big down day which is what usually happens to me. Not this time of course.

    GMKT welcome to the SI family. :)
  5. Maybe you should try to hold it for a while.
  6. Alright, well I just got half my position on in this midday since it looked like it was holding up okay at 15.60... great revenue growth aswell as being a prime takeover candidate... too good a deal here. You still holding Stoney?
  7. Tommy I folded the same day! I still AM a MAJOR believer in this stock & think it is a prime takeout candidate However the freakin' government is asking for a lot of tax this year and I had to sell some stuff until I can generate a little income.
    >>>> I should be back in 2 weeks-- Don't take off till then please......
  8. Very interesting find TommyM affects professional sellers over 2000 won or something but the whole taxation at all is going to hamper their growth. This is something Ebay has handled very well. Have you heard of LQDT? ... it's interesting too.
    #10     Apr 15, 2007