Core Insights - Coupang Inc. reported record annual sales of 49.1 trillion won ($36.8 billion) in 2025, marking a 14% increase from the previous year [1] - Despite annual gains, fourth-quarter operating profit plummeted 97% due to a personal data breach in December, leading to a quarterly net loss of 37.7 billion won ($28.3 million) [1] Financial Performance - Annual revenue rose to 49.1 trillion won ($36.8 billion), up from 41.3 trillion won ($30.9 billion) the previous year, with a constant currency increase of 18% [1] - Annual operating profit reached 679 billion won ($509 million), an 8% increase from 602.3 billion won ($451 million) in the prior year [1] - Net income for the year totaled 303 billion won ($227 million), more than tripling from the previous year [1] - Fourth-quarter revenue increased 11% year-on-year to 12.81 trillion won ($9.61 billion) but fell 5% from the previous quarter [1] Operational Challenges - Operating profit for Q4 dropped to 11.5 billion won ($8.6 million) from 435.3 billion won ($326 million) a year earlier, with an operating margin of 0.09% [1] - The December data breach negatively impacted revenue growth, active customer numbers, and profitability, although recovery began in the first quarter [1] - Active customers in the product commerce segment totaled 24.6 million in Q4, up 8% year-on-year but down 100,000 from the previous quarter [1] Segment Performance - Product commerce revenue for Q4 was 10.74 trillion won ($8.06 billion), an 8% increase year-on-year [1] - Growth businesses, including Farfetch and Coupang Eats, generated revenue of 2.07 trillion won ($1.55 billion), up 32%, but recorded an adjusted EBITDA loss of 434.9 billion won ($326 million) [1] - Revenue per active customer rose 3% on a constant currency basis to $301 (436,400 won) [1] Cash Flow and Share Repurchase - Operating cash flow for the year decreased to $1.8 billion from $1.91 billion, while free cash flow fell to $527 million from $1.02 billion [1] - The company repurchased 5.9 million shares of Class A common stock for $162 million last year [1]

Core Viewpoint - Coupang and Sea Limited, once popular growth stocks, are now being evaluated for their potential as turnaround plays in the current market environment [1][3]. Coupang Overview - Coupang operates South Korea's largest e-commerce platform and went public at $35 in March 2021, reaching an all-time high of $50.45 shortly after [2]. - The stock currently trades at approximately $27, having retreated from its peak due to slowed growth and rising interest rates [3]. - Coupang's active customer base grew from 14.9 million at the end of 2020 to 23.4 million in Q1 2025, with Wow subscribers increasing from 6 million in 2020 to 13 million in 2023 [6]. - The company has expanded its marketplace to Taiwan and acquired Farfetch to diversify beyond South Korea, achieving a revenue CAGR of 26% from 2020 to 2024 [7]. - Coupang turned profitable on a GAAP basis in 2023 and 2024, driven by higher-margin marketplace expansion and automation [8]. - Analysts project Coupang's revenue and GAAP EPS to grow at CAGRs of 13% and 130% from 2024 to 2027, respectively, with a current valuation of 1.4 times this year's sales [9]. Sea Limited Overview - Sea Limited, based in Singapore, operates Shopee, the leading e-commerce platform in Southeast Asia, and went public at $15 in October 2017, reaching a peak of $366.99 in October 2021 [2]. - The stock currently trades at around $163, facing challenges as growth has slowed and competition has intensified [3][12]. - Sea's strategy relied on Garena's gaming profits to subsidize Shopee's losses, but the gaming segment has faced setbacks, including the ban of Free Fire in India [11]. - Despite these challenges, Sea's revenue grew at a CAGR of 40% from 2020 to 2024, and it also turned profitable on a GAAP basis in 2023 and 2024 [14]. - Analysts expect Sea's revenue and GAAP EPS to grow at CAGRs of 20% and 97% from 2024 to 2027, with plans to enhance Shopee's features and expand into Vietnam [15]. Investment Comparison - Coupang is viewed as a more balanced investment with a cheaper valuation compared to Sea, which is heavily reliant on a single aging video game for profits [16]. - While Sea is growing faster, its higher forward price-to-sales ratio makes it less attractive than Coupang [16].