Coupang Inc. (CPNG): Media reports of tax authority notifying c.W300bn in back taxes following special tax audit

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Coupang Inc. (CPNG): Media reports of tax authority notifying c.W300bn in back taxes following special tax audit

Goldman Sachs Coupang Inc. (CPNG)

announcement had helped shift the narrative toward WOW recovery, revenue

normalization, and 2027 EBITDA recovery, reports of a W300bn tax assessment risk

could bring investor attention back to cumulative regulatory costs, in our view. This

may weigh on sentiment recovery to some extent even if fundamentals remain

intact. We will monitor any formal updates on the situation.

Price Target Risks and Methodology - Coupang Inc.

Valuation methodology: We are Buy rated on Coupang. We apply an SOTP

methodology to derive our target price. We apply a 12.7x target multiple to Coupang’s

domestic Product Commerce, incorporating the heightened regulatory risk post

Coupang’s data breach; 20x target multiple to Coupang Taiwan, as we expect to see its

growth accelerating in its 8th year into its strategic launch, turning to profit by 2030E;

and 10x target multiple to Eats as we think Eats’ growth will facilitate Coupang’s

ecosystem vs. Eats business itself, though mature/profitable. This approach generates a

1-yr fwd EV of US$53bn, translating into a US$31 12m TP.

Key risks: Key downside risks include: 1) heightened regulatory/legal scrutiny and

escalation; 2) continued regulatory noise resulting in downturn of consumer sentiment,

leading to longer-than-expected drag on active users, as well as higher risk of

permanent user churn; 3) higher-than-expected churn of high-value users (i.e., WOW

members) post the data breach, negatively impacting LT GMV growth; 4)

slower-than-expected scaling of FLC due to GMV headwind from the downturn of active

user posing risks to profitability; and 5) changes to Coupang’s commitment to