Coupang, Inc.

CPNG Details

Coupang, Inc. (NYSE: CPNG) is a Korean e-commerce company that sells garments, electronics, footwear, food products, furniture, nutritional supplements, and other items via mobile applications and websites. It also operates an e-commerce and logistics system and provides delivery services. Furthermore, it offers online advertising space on its websites and mobile applications. CPNG was listed on NYSE on March 11, 2021, at an issue price of USD 35.00 per share. As of October 08, 2021, the company's market capitalization stood at USD 47.75 billion.

Key Recruitment: On August 26, 2021, CPNG appointed Alex Wong as its Head of Public Affairs. Mr Wong has been tasked with monitoring public policy considerations, ties with the US government, and stakeholder engagement in this new role. Before joining CPNG, he served the US Department of State as Deputy Assistant Secretary of State for East Asian & Pacific Affairs.

Q2FY21 Results: The company reported a YoY surge of 71.31% in total revenues to USD 4.48 billion in Q2FY21 (ended June 30, 2021) from USD 2.61 billion in Q2FY20. Net retail sales, representing 89.20% of the total Q2FY21 revenue, expanded by 64.96% YoY. However, net loss (attributable to shareholders) for Q2FY21 increased to USD 518.60 million from USD 159.91 million in Q2FY20. CPNG exited the quarter with a cash balance of USD 4.28 billion and total outstanding debt of USD 646.90 million.

Key Risks: CPNG is heavily dependent on Coupang Pay for payment processing across its business, which must adhere to a complex set of laws, rules, and regulations, particularly in the areas of online and mobile payment services. As a result, any deterioration in its quality, usability, convenience, or attractiveness could harm the company's operations.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CPNG Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: CPNG's stock price decreased 38.71% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 25.76 to USD 65.00. The stock is currently trading below its 50 DMA level, and its RSI Index is at 44.40. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 33.67. Considering the significant correction in the stock price in the past six months, decent balance sheet, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the closing price of USD 28.10, up 2.14% as of October 08, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

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