Coupang’s ’55 trillion’ rosy outlook… “highly rated” vs “appropriate”

There is an evaluation that Coupang, who chose to go to the US, can receive up to 55 trillion won in corporate value, and stock markets are also arguing. At the same time, the opinion that the amount is possible due to the abundant financial power of the US stock market and that it is convincing considering the potential of Coupang are raised simultaneously. There is also a movement to re-evaluate overall domestic e-commerce companies such as Naver and Kakao.

According to the financial investment industry on the 16th, Coupang submitted a report for listing of Class A common stocks to the US Securities and Exchange Commission (SEC) on the 12th (local time). Although the number of listed stocks and the offering price have not been determined, foreign media such as The Wall Street Journal and Bloomberg project the value of Coupang at 30 to 50 billion dollars (about 33 to 55 trillion won). Compared to the current market cap of the securities market, it ranks 7th after Samsung SDI (55 trillion won), and second only to Naver (65 trillion won) for major IT companies.

There is also a distrust of the rosy outlook on Coupang’s values. Even considering the growth trend, it is impossible for Coupang to be recognized as a major global e-commerce company. Large e-commerce companies such as Amazon and Alibaba have grown based on huge markets such as the United States and China, while Coupang has limited business areas in Korea. The scale at the time of listing is also different. In the case of Alibaba, which was recognized for its value of 168 billion dollars in the past and wrote a new IPO record in the US stock market, the transaction value of the year just before listing reached about 28 trillion won.

An official in the financial investment industry pointed out, “Considering the difference between funding power and supply and demand, we have no choice but to receive higher value in the United States than in Korea.” . This official said, “Compared to e-commerce rivals Naver Commerce and Kakao Commerce, it should be viewed at a similar level, and traditional distribution powerhouses such as Hyundai, CJ, and Shinsegae are still influential.” It was highly evaluated only for the growth of the company’s appearance,” he explained.

However, some analyzes that the current forecasts are reasonable enough considering Coupang’s potential. Lee Ji-young, a researcher at Samsung Securities, said, “Coupang recorded 91% sales growth in 2020, which significantly exceeded Amazon (38%) and eBay (19%),” said “Rocket Fresh, Coupang Itz, and other service expansion strategies were effective.” Said. High customer loyalty and online video service (OTT) are also strengths. “The purchase amount of Coupang customers is increasing in proportion to the subscription year, and they have a four-fold higher frequency of purchase,” said Lee. “In the mid- to long-term, there is a possibility of growing into a total platform company that encompasses OTT, AI, and IT.” Explained.

The move to re-evaluate domestic e-commerce companies with Coupang’s listing is also noticeable. Seong Jong-hwa, a researcher at EBEST Investment & Securities, said, “We believe that Coupang’s listing on the New York Stock Exchange (NYSE) will be an opportunity for the value of Naver and Kakao’s commerce sector to be re-evaluated.” It was analyzed that it is worth 7.6 trillion won. This is the average calculated by applying the annual transaction amount and discount rate compared to the US stock market, assuming Coupang’s future market cap is 33.2 trillion to 55.4 trillion won. We also raised our target prices for Naver and Kakao by 11% and 10%, respectively.