Kaspi.kz: A Digital Titan's Path to Dominance in Central Asia and Beyond

Kaspi.kz (KSPI), Kazakhstan’s leading fintech and e-commerce powerhouse, has emerged as a regional disruptor with ambitions to expand beyond its borders. Despite macroeconomic headwinds and the risks tied to its high-profile Turkish acquisition, Kaspi’s robust financial performance, strategic ecosystem, and execution excellence position it as a compelling investment opportunity. This analysis explores why the stock remains a buy, despite near-term turbulence.

The Financial Foundation: Growth Anchored in Scale

Kaspi.kz’s 2024 results underscore its dominance in Kazakhstan’s digital economy. Full-year revenue surged 32% YoY, driven by triple-digit growth in e-commerce (85% YoY) and strong contributions from its Payments and Fintech platforms. The company’s Marketplace GMV grew 44% system-wide, with e-Grocery and e-Cars—key verticals—expanding at 97% and 62%, respectively. The Payments segment, now handling 35% of transactions via its proprietary POS Register, saw net income rise 24% YoY, reflecting operational efficiency.

The Fintech division, meanwhile, delivered 30% TFV growth, with Merchant & Micro Business Finance products—tailored to SMEs—accounting for 17% of total lending volume. This diversification highlights Kaspi’s ability to monetize its ecosystem beyond traditional banking services, a trend that positions it to capitalize on Central Asia’s underpenetrated digital finance market.

Strategic Expansion: The Turkish Gambit and Beyond

The acquisition of a 65.4% stake in Hepsiburada, Turkey’s largest e-commerce platform, marks Kaspi’s boldest move yet. While Hepsiburada’s Q1 2025 results revealed challenges—14.8% GMV decline and deteriorating free cash flow—the deal’s long-term potential remains compelling. Hepsiburada commands a 69.5% share of Turkey’s 3P Marketplace GMV, a position underpinned by its 72% parcel delivery market share via HepsiJet logistics.

Kaspi’s integration strategy aims to leverage Hepsiburada’s scale to:
1. Cross-sell services: Deploy its BNPL (BINPL) and merchant finance products to Turkish SMEs.
2. Expand logistics: Use HepsiJet’s network to fuel cross-border e-commerce between Kazakhstan and Turkey.
3. Access a larger consumer base: Turkey’s population of 85 million represents a critical growth frontier for Kaspi’s Super App ecosystem.

While near-term risks include Turkey’s inflation (44.4% in 2024) and political volatility, Kaspi’s financial strength—BBB- investment-grade credit rating, KZT1.3 trillion in liquidity—provides a buffer to weather the storm.

The Marketplace Engine: Why Kaspi’s Dominance is Unshaken

Kaspi’s core Marketplace remains its crown jewel. E-commerce GMV grew 85% in 2024, fueled by Kaspi Delivery (orders up 128%) and its 50% e-commerce delivery market share via Postomat kiosks. The company’s e-Grocery segment, now serving 858,000 active consumers, mirrors the success of regional peers like Amazon Fresh, while Kaspi Travel (up 34% YoY) and Kaspi Tours (9% of Travel GMV) highlight its ability to innovate in adjacent sectors.

This dominance is underpinned by a Super App ecosystem that integrates payments, financial services, and logistics, creating a virtuous cycle of customer retention and cross-selling. With 73 monthly transactions per active consumer—a record high—the company’s sticky user base insulates it from competition.

The Bull Case: Why Now is the Time to Buy

Despite the Turkish overhang, several factors make Kaspi.kz a compelling buy:
1. Valuation: Trading at 9.4x 2028E earnings, the stock offers a discount to peers like MercadoLibre (20x) and Sber (12x), despite its superior profitability (80% ROE over eight years).
2. Debt Capacity: Kaspi’s BBB- rating and $1.1 billion cash reserves give it flexibility to fund Hepsiburada’s turnaround without diluting shareholders.
3. Execution Track Record: The company has consistently exceeded guidance, with net income growing 25% in 2024 and 20% expected in 2025 (excluding Turkish losses).

Conclusion: A Titan in the Making

Kaspi.kz is not just a Kazakhstan success story—it’s a regional digital powerhouse with the scale, liquidity, and vision to dominate Central Asia and beyond. While Hepsiburada’s near-term struggles are real, they pale against the long-term opportunity to leverage its logistics and market share in Turkey. With a Super App ecosystem that drives 32% annual revenue growth, a fortress balance sheet, and execution that consistently outperforms expectations, Kaspi.kz is primed to deliver returns for patient investors.

The upcoming Q1 2025 results (May 12) will test whether Kaspi can mitigate Turkish risks while maintaining its Kazakh momentum. If management delivers on its 20% net income growth target—excluding Hepsiburada—while outlining a clear path to stabilize its Turkish operations, the stock could re-rate to its $17 billion market cap potential. In a world of digital winners and losers, Kaspi.kz is firmly in the former category.