Joint Stock Co Kaspi.kz (KSPI) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001985487

P/B 3.57

P/E 7.57

P/S 2.90

Market Cap 14.80 Bn

ROIC (Qtr) 23,236.54

Div Yield % 2.20

Rev 1y % (Qtr) -48.87

Total Debt (Qtr) 649.17 Mn

Debt/Equity (Qtr) 0.16

About

Kaspi.kz, a leading financial technology company based in Kazakhstan, is commonly known by its stock symbol KSPI. The company has established itself as a significant player in the financial services industry, providing various services and products to both consumers and merchants. Kaspi.kz operates a two-sided Super App business model, which integrates different services and products into a single platform. This model has allowed the company to cater to a diverse range of customer needs, resulting in a vast customer base of 14.0 million Average...

Kaspi.kz, a leading financial technology company based in Kazakhstan, is commonly known by its stock symbol KSPI. The company has established itself as a significant player in the financial services industry, providing various services and products to both consumers and merchants.

Kaspi.kz operates a two-sided Super App business model, which integrates different services and products into a single platform. This model has allowed the company to cater to a diverse range of customer needs, resulting in a vast customer base of 14.0 million Average Monthly Active Users (MAU) and 581,000 Active Merchants as of December 31, 2023. The company's operations span across various sectors, including payments, marketplace, fintech, and government services.

The Payments Platform is a fundamental part of Kaspi.kz's business, facilitating transactions between and among merchants and consumers. The platform offers various services, such as P2P Payments, Kaspi QR, Household Bill Payments, and Merchant Acquiring Services. Kaspi QR technology powers the company's proprietary payments network, enabling end-to-end payments functionality between consumers and merchants using the Kaspi.kz Super App.

The Marketplace Platform connects online and offline merchants with consumers, enabling merchants to increase their sales using an omnichannel strategy. The platform offers various services, including e-Commerce, m-Commerce, Kaspi Travel, and Kaspi Classifieds. Kaspi.kz's Marketplace Platform is fully integrated into its Super Apps, providing a seamless shopping experience for consumers.

The Fintech Platform provides consumers with Buy-Now-Pay-Later (BNPL) products, General Purpose Loans, Car Finance, and Kaspi Deposit accounts. The platform also offers merchant and micro-business finance services, designed to help merchants invest in their inventory and grow their sales volumes.

Kaspi.kz's Government Services platform provides digital access to everyday government services, including digital documents, ID documents, driving license renewal, car ownership registration, and tax filing. Although Kaspi.kz does not generate revenue directly from Government Services, it contributes to higher Super App user engagement and is synergetic with the company's other products.

Kaspi.kz has established a strong operational and financial track record, attributed to its competitive strengths. The company's powerful self-reinforcing network effects, led by its popular Super Apps, have contributed to its long-term growth and success. Kaspi.kz's ability to integrate various services and products into a single platform, its extensive proprietary data, and customer feedback enable it to plan future product upgrades and launches.

The company's growth strategy is focused on capitalizing on structural growth in digitalization, increasing adoption of existing digital services, developing new innovative digital services, replicating its successful track record into new geographies, and leveraging its technology and data capabilities to create new markets and grow in existing markets. Kaspi.kz's proprietary technology and data capabilities provide it with significant competitive advantages, enabling it to power its artificial intelligence and machine learning algorithms and provide a highly personalized user experience.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 911.06M provides robust 1.40x coverage of total debt 649.17M, indicating excellent debt servicing capability and financial flexibility.
Operating cash flow of 911.06M provides exceptional 32.79x coverage of minority interest expenses 27.79M, showing strong core operations.
Strong tangible asset base of 17.73B provides 27.32x coverage of total debt 649.17M, indicating robust asset backing and low credit risk.
Robust free cash flow of 653.95M exceeds capital expenditure of 257.11M by 2.54x, indicating strong organic growth funding capability.
Strong operating cash flow of 911.06M provides 5.06x coverage of SG&A expenses 179.96M, showing efficient operational cost management.

Cons

Operating cash flow of 911.06M barely covers its investment activities of (1.03B), with a coverage ratio of -0.88, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (1.03B) provide weak support for R&D spending of 229.67M, which is -4.50x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 1.55B provide limited coverage of acquisition spending of (1.01B), which is -1.54x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
Deposit liabilities of 12.78B significantly exceed cash reserves of 1.55B, which is 8.25x, indicating potential liquidity risk in stress scenarios.
Other current assets of 0 provide weak coverage of payables of 149.18M, which is 0x, suggesting potential working capital stress in near term.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	-0.04	2.56
EV to Cash from Ops.	-0.84	38.32
EV to Debt	-1.17	-11.37
EV to EBIT	-0.32	-12.79
EV to EBITDA	-0.31	7.72
EV to Free Cash Flow [EV/FCF]	-1.16	24.22
EV to Market Cap	-0.05	0.58
EV to Revenue	-0.15	-35.00
Price to Book Value [P/B]	3.57	3.74
Price to Earnings [P/E]	7.57	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	16.70	2.69
Dividend per Basic Share	1.71	0.10
FCF Dividend Payout Ratio %	0.09	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-72.78	-404.11
Cash and Equivalents Growth (1y) %	24.94	226.02
Dividend Growth (1y) %	-69.34	-0.27
EBIAT Growth (1y) %	-6.39	31.15
EBITDA Growth (1y) %	0.00	49.02
EBIT Growth (1y) %	-7.37	25.85
EBT Growth (1y) %	-7.37	17.82
EPS Growth (1y) %	-6.28	70.69
FCF Growth (1y) %	-52.52	295.45
Gross Profit Growth (1y) %	-13.09	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.00	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.00	1.21
Current Ratio	0.00	2.57
Debt to Equity Ratio	0.16	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	0.00	-544.82
EBIT Margin %	25,570.22	-197.78
EBT Margin %	46.60	-602.74
Gross Margin %	59.80	52.06
Net Profit Margin %	38.30	-605.52

Joint Stock Co Kaspi.kz (NASDAQ: KSPI)