UNPACKING GIGACLOUD TECHNOLOGY

The scope of this report is to evaluate the equity value of GigaCloud Technology Inc. using Discounted Cash Flow valuation methodology. The primary aim is to determine whether the current share price of the organization indicates an undervaluation, fair valuation, or an overvaluation. This model relies on data points available on publicly accessible internet forums or websites and should be exclusively used for informational purposes. The objective of this report is not to provide investment recommendations.

INDUSTRY OVERVIEW

GigaCloud Technology Inc. (Ticker Symbol: GCT) operates in the e-commerce logistics industry. E-commerce logistics is the essential framework that allows for the smooth movement of goods and services from online sellers to resellers/retailers and ultimately to the final consumers. This industry includes various sub-services such as warehousing, transportation, last mile delivery, and technological systems that assist in streamlining order fulfillment and delivery.

According to Polaris Market Research, the global market for e-commerce was valued at US$ 500.76 billion in 2024 and is projected to grow to US$ 609.59 billion in 2025, ultimately reaching approximately US$ 3,731 billion by 2034, with a CAGR of 22.3% from 2025 to 2034.

The e-commerce logistics market has been subject to considerable innovation and growth in recent years due to rapid positive shift in consumer trends towards online shopping and home delivery. The change in the consumer buying patterns, particularly intensified by the Covid-19 pandemic, has resulted in a significant transformation in retail logistics operations. Consequently, businesses are investing substantially in automated solutions or digital infrastructure to satisfy the rising demands for quick, dependable and safe e-commerce delivery service.

The e-commerce logistics industry is further segmented into the B2B e-commerce logistics market and B2C E-commerce logistics market. According to Modor Intelligence, the size of the overall e-commerce industry in the United States is expected to be at US$ 141.07 billion in 2025 and is projected to grow to US$ 216.06 billion by 2030, reflecting a CAGR of 8.9% from 2025 to 2030.

However, it is imperative to note that multiple reputable publications and financial forums project this industry to grow at a CAGR of 18% - 19%.

ABOUT THE COMPANY

GigaCloud Technology Inc. is an online global B2B solutions provider headquartered in El Monte, California, United States and is listed on the NASDAQ stock exchange (Ticker: GCT.) The organization operates in the B2B e-commerce logistics industry and is innovating the supply chain for wholesale buyers and sellers of large parcel merchandise. Their GigaCloud B2B marketplace technology effortlessly links suppliers and resellers around the world in real time, and combines the product exploration, purchases, and delivery, supported by an international logistics network spanning the U.S., U.K., Germany, Canada, and Japan.

BULL CASE: SCALABLE MARGINS AND B2B INFRASTRUCTURE

GigaCloud Technology presents a compelling long-term investment opportunity as a differentiated B2B marketplace operator with a scalable, asset-light business model. The company’s full-stack logistics platform, integrating warehousing, cross-border freight, and last-mile delivery, offers a vertically integrated solution that directly addresses long-standing inefficiencies in the global large-parcel supply chain.

From a macro perspective, the secular shift toward global e-commerce, especially in the furniture and home goods sector, supports continued volume growth. GigaCloud’s marketplace model allows for incremental margin expansion via increased seller adoption and growing network effects.

BEAR CASE: THIN MOAT, COMPETITIVE RISK AND PLATFORM EXECUTION CHALLENGES

Despite a promising headline growth narrative, GigaCloud’s long-term investment case warrants caution. At its core, GCT operates in a commoditized logistics space with limited differentiation and low switching costs for merchants. The company’s B2B marketplace is still relatively nascent, and the depth of its buyer and seller network may not be sufficient to defend against larger, better-capitalized incumbents such as Amazon or Alibaba.

The sustainability of GCT’s current margin profile is unproven at scale. Much of its profitability hinges on favorable freight rates and lean SG&A structures that may not hold as the business expands globally. Execution risks loom large, particularly in regions with complex regulatory environments or logistical infrastructure challenges.

CONCLUSION OF THE DCF MODEL

Based on our Discounted Cash Flow Model, we have concluded the implied share price of GigaCloud Technology Inc. to be US$ 53.95 per share. In comparison, the current market price of the company’s share is US$ 20.56 per share, representing a substantial undervaluation of 62% to our assessed implied value.

This significant undervaluation between the implied value and the prevailing market price is primarily driven by the continuing geopolitical uncertainty which has disrupted the global supply chain and has in turn resulted in a substantial underappreciation of the company’s long-term cash flow potential. This divergence has been further exemplified by the recently imposed tariffs by the United States’ administration and the ongoing legal proceeding between the company and its investors leading to a loss in stakeholder’s confidence.

While market prices are influenced by short-term volatility and uncertainty, our valuation reflects a long-term fundamental view based on the company’s projected financial performance and our discount rate assumptions.

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