7 Comments

I think you may have made a mistake in the "Can Kaspi return a 10x" section. You give Kaspi's GMV as KZT 12 billion, and conclude that Kaspi could therefore become a 10x, since the e-grocery market is projected to reach 750 billion. Small problem, Kaspi's GMV is not 12 billion but 12 trillion KZT.

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Thank you fo your due diligence. The 12 Billion KZT was the GMV I mentioned for their nascent e-grocery market so I'm not referring to the total GMV of their marketplace. If I look at the most recent financial results presentation (https://ir.kaspi.kz/financial-information/), they increased their 19 billion KZT GMV (2022) to 69 billion KZT in 2023. I used this as an example to show Kaspi's ability to expand their offering and think they could have the potential to get to a multiple of their current size.

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Ah, I understand. Personally, I don't think e-Grocery will be revolutionary for them - they estimate the Kazakh grocery market to be worth $14b. Say 40% of that is in cities big enough for e-grocery to make sense, then within those cities they can capture a very optimistic 50% market share (of all groceries, not just e-groceries). Because groceries are a pretty low margin product, say the profit in total on that is 10%. Then assume profit is split 50:50 between Kaspi and Magnum. Multiply all those rather optimistic numbers together and you get $140m in profit - only about 7% of Kaspi's current run-rate profit. But let me know if your maths looks different.

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I agree, even if they capture a big percentage of the market, it will remain a smaller part of total revenue and profits. The idea is that they have this capability of launching new services that quickly grow so there's a sense of unknown optionality to their superapp business model.

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What a deep dive about this hidden gem! Will have to read it again and again. Thanks!

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Thank you for the kind words!

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Great write-up! The only company from Kazakhstan I was aware of until today was Kazatomprom. Thank you, for providing insights into another hidden game.

I’ve added a link to the analysis of Kaspi in RhinoInsights latest Friday Roundup.

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