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Coupang’s ransom, listed on the New York Stock Exchange (NYSE) on the 11th (local time), exceeded 100 trillion won. The trade was closed at $49.25, a 40.71% increase from the offering price of $35, and the market capitalization based on the closing price reached $8.85 billion.
As Coupang’s ransom soared, Naver(380,500 +1.87%)Y-Mart(178,500 +0.56%)There is a voice saying that we have to see again. In particular, the target price of Naver, the No. 1 e-commerce company, is being revised upward. This is because, while Coupang, the second place in e-commerce, is recognized for its corporate value of 100 trillion won, Naver’s current market cap is only 62 trillion won even when the search platform, Naver Shopping, Naver Webtoon, and Z Holdings are combined.
2nd place, more expensive than 1st place
Naver closed the deal at 38,500 won, up 1.87% on the 12th. Meritz Securities raised its target price for Naver to W520,000. The logic is that Naver Shopping is overly undervalued when compared based on Coupang’s offering price. Naver’s shopping transaction last year was 30 trillion won, and Coupang was 22 trillion won.
The reason why second-class companies are recognized for higher valuations is because their business models are similar and different. The core of the Coupang business model is rocket delivery through direct purchase. It buys products in advance and stocks them up before taking orders. Warehouse and delivery personnel are also weapons. Although it is still incurring operating losses, it is a structure that can accelerate the speed of operating profit growth if sales increase significantly.
On the other hand, Naver eCommerce is an intermediary platform. A representative example is a smart store that allows small business owners and self-employed to easily sell products online. It also serves as a price comparison platform. Its strength is its ability to generate revenue based on shopping search advertisements.
As the business model is different, Coupang’s share price-to-sales ratio (PSR) cannot be applied to Naver Shopping as it is. This is because the competition for shopping brokerage platforms is fierce, making it difficult to receive high valuations. Meritz Securities calculated the average PSR based on the total transaction amount of not only Coupang but also other e-commerce platforms such as EBay Korea Market Curly 11st Street WeMef Ticket Monster. Coupang was recognized for 2.3 times based on the public offering price, while other companies were recognized for less than 1 times. The average was 0.7 times.
If 0.7x is applied to Naver Shopping’s total sales forecast for next year (40 trillion won), the corporate value of Naver Shopping is 28 trillion won. Kim Dong-hee, a researcher at Meritz Securities, said, “We will raise the value of Naver Shopping from 21 trillion won to 28 trillion won. Can be higher here.”
Will the anti-Coupang solidarity work?
Naver faces Coupang and CJ Logistics(170,500 +0.89%), E-Mart and other triangular formations are also built. In order to reinforce its logistics capabilities, after exchanging shares with CJ Group in October last year, it is preparing to collaborate with E-Mart, a strong player in traditional offline distribution, through the exchange of shares. In the market, △ Naver provides an e-commerce platform △ CJ Logistics is in charge of Coupang’s strong point of full-filment (seller’s delivery, packaging, and inventory management agency) △ E-Mart secures high-quality products and establishes national offline stores and SSG.com distribution center as a logistics base. It is expected that the’triangular cooperation’ of (mini full-filment center) will be achieved.
Some say that E-Mart SSG.com needs to be reevaluated. Park Hee-jin, a researcher at Shinhan Financial Investment, said, “If Coupang’s listing valuation method and discount rate are applied, E-Mart (share ratio 50.1%) and Shinsegae(287,000 -0.17%)The corporate value of SSG.com, whose majority shareholder (26.7%) is the largest shareholder, amounts to 9.3 trillion won. “This is 94.0% and 88.2% of the E-Mart and Shinsegae market caps, respectively,” he analyzed. E-Mart’s stock price increased 0.56% on the same day and closed at 178,500 won.
Coupang ransom appreciation properly?
However, there is also a bubble controversy over Coupang’s recognition of the value of 100 trillion won. This is because it is receiving a valuation similar to that of Amazon and Alibaba, which are making profits without making a profit. It is an analysis that even if it attracts all the values as a financial and content platform, the value was evaluated too high. Park Sang-jun, a researcher at Kiwoom Securities, said, “I think the public offering price of $35 is reasonable, but it is difficult to see that the closing price ($49.25) will be maintained on the first day. It should be visible to be able to earn 7 trillion won, but now it is not visible,” he explained.
Jae-yeon Ko/Hankyung Economic Daily [email protected]