Kaspi.kz: consumer credit deep dive (stays BUY)
We remain in tune with the financialisaton of the Kazakh consumer. In this report, we hope to give investors a deeper insight into the role of consumer credit for both Kaspi, and the broader Kazakh economy. We focus on regulation, the relationship between credit and Marketplace growth, and the pace of increasing penetration. Our main takeaway is that Marketplace is still growing with credit. Each dollar of incremental GMV generates 85 USȼ of incremental credit risk: similar to 2020 levels. This has pros and cons. The cons include the Marketplace and Fintech businesses being exposed to the credit cycle and regulation. On the pro side, we believe that Kaspi has the upside of exerting more pricing power when the time comes, as take rates appear to be low relative to Kaspi’s offering for merchants, particularly on the e-commerce platform. We rate Kaspi a BUY, with a new price target (PT) of USD 92.9/GDR (vs. USD 94.3/GDR previously). Kaspi trades at a 9.2x P/E on our 2023E numbers. We believe this business could trade at around 11x P/E for 2023E under conservative assumptions.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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