Why is this important
UZCARD is the dominant payment system in Uzbekistan (70% of the market versus 30% at HUMO). Profit growth of 41% was ensured by the expansion of cashless payments, online purchases, and the number of cards. The state sold 75% of the shares for $25.2 million in 2022 — today the company is worth at least $75-100 million, making the deal extremely profitable for new owners. Income growth (+69%) above profit (+41%) indicates investment in development.
What happened
- Net profit for 9 months – 930 billion soums (+40.8%);
- Revenue – 1.5 trillion (+69.2%);
- Operating profit – 1 trillion (+59.1%);
- In 2022, 75% of the shares were sold for 210.1 billion soums ($25.2 million), the company’s valuation was 280 billion soums.
With 9 months’ profit of 930 billion (annual projected to be around 1.2 trillion) and a standard P/E multiplier of 10-15 for payment systems, UZCARD’s capitalization is estimated at 12-18 trillion soums ($1-1.5 billion). This is 40-60 times higher than the 2022 estimate.
Growth drivers
Increase in revenue (+69.2%):
- Increasing the number of non-cash transactions (online purchases, transfers, service payments);
- Increase in the number of UZCARD cards (salary, pension, student);
- Commission from acquiring (shops, online stores);
- Partnerships with banks and fintechs.
Operating profit growth (+59.1%): lower than revenue growth (+69.2%), indicating an increase in operating expenses: investments in IT infrastructure, marketing, expansion of the terminal network.
Net profit growth (+40.8%): lower than operating profit (+59.1%) due to interest expenses, taxes, and depreciation.
Competition
- UZCARD: 930 billion in profit for 9 months, dominates with 70% of the market;
- HUMO: 224 billion in profit for 9 months, 30% of the market.
UZCARD surpasses HUMO in profit by 4.2 times due to its dominance: most salaries, pension cards, and government payments go through UZCARD.
Context
UZCARD is the national payment system of Uzbekistan, created in 2001 as an alternative to Visa/Mastercard. Processes UZCARD card transactions and provides processing to banks.
Cashless payments in Uzbekistan are growing by 50-70% annually due to:
- Distribution of online purchases (e-commerce);
- Increase in the number of bank cards;
- State policy on cash flow reduction;
- Development of fintechs (Paynet, Click, Payme).
UZCARD may conduct an IPO in the future or attract a strategic investor for scaling. With a capitalization of $1-1.5 billion, the company is attractive to international payment systems or funds.
