The Coupang effect drives up shares of many companies

Industry

The Coupang effect drives up shares of many companies

Published: 15 Feb. 2021, 19:29

Coupang's headquarters in Songpa District, southern Seoul. [YONHAP]

Coupang's plan to list on the New York Stock Exchange triggered a surge in the stock prices of local logistics and packaging providers on Monday as investors turned positive on companies connected to the e-commerce player and to e-commerce more generally.

Some of the beneficiaries of the boom have tangible business ties to Coupang while others may not.

Dongbang, a Coupang logistics contractor, shot up by the daily limit of 29.99 percent to 9,970 won ($9.05) as investors bet that the Kospi-listed firm that handles delivery between Coupang’s sellers and fulfillment centers could benefit from the listing.

Also on a tear was KCTC, another logistics contractor, as the firm soared by 29.88 percent to 6,150 won.

KTH, an Kosdaq-listed IT company, rose 29.97 percent, as it works with the online retailer in providing the Coupang Play subscription-based streaming service.

Suppliers of cardboard boxes, often used for packaging, and paper materials also rode the wave, although some companies only have a vague connection with Coupang.

The shares of Tailim Packaging jumped by 9.68 percent to 5,890 won. A spokesperson at Tailim said that it provides packaging boxes to the e-commerce platform.

Daeyoung Packaging rose 29.86 percent to 2,370 won, although it declined to comment on business ties with the retailer.

Youngpoong Paper’s stock surged by 29.92 percent to 7,990 won. A source at the company said that it doesn’t have a direct business relation with Coupang.

Competitors to Coupang, such as Naver and Kakao, also did well, as a successful IPO could boost their valuations.

“The e-commerce platforms operated by Kakao and Naver could be reevaluated,” said Sung Jong-hwa, an analyst at eBEST Investment & Securities.

“The commerce business at Naver and Kakao have displayed steep growth, although not as much as Coupang,” he said, valuing Naver’s commerce unit in the range between 2.7 trillion won and 4.5 trillion won and Kakao’s between 1.1 trillion won and 1.8 trillion won.

On Monday, Coupang provided details about its stock compensation plan, which will cover a broader range of workers, including delivery drivers.

Kang Han-seung, a representative director at the company, said that all Coupang Friends delivery workers, non-manager employees and entry-level workers categorized level 1 to level 3 will receive 2-million-won worth of stock.

The compensation will be given in the form of restricted stock units, a type of stock-based employee reward that is fully paid when a certain condition is met.

Kang said that a worker should work for another two years at the company to receive the full compensation.

park.eunjee@joongang.co.kr [park.eunjee@joongang.co.kr