Our target price of $35 for Coupang is based on the sum-of-the-part (SOTP) methodology where we value: 1) ex-Eats (mainly Product Commerce) at $51.4bn EV, assuming 9.8% WACC to 2027E ex-Eats adj. EBITDA, and 16x of target EV/EBITDA; and 2) Coupang Eats at $5.6bn, applying a 15% discount to the estimated Korea proportion of DHER EV. After subtracting $5.5bn of net cash, we derive fair equity value of $62.5bn, akin to $35 TP.

Downside risks to our rating and TP include: [1] a sharp slowdown in Korea's consumption due to weak macro (soft employment and tariff risk on exports); [2] greater competition with Naver, AliExpress, Temu and/or the other e-commerce players; and [3] an additional increase of investments in Developing Offerings, mainly for Taiwan and Eats.