![]() PayPal generates more stable returns than Qiwi, and it also has a presence in the Russian market. ![]() PayPal's stock is certainly pricier at 36 times this year's earnings, but that premium is justified by its growth. Those numbers compare poorly to PayPal's estimated growth rate of 23% this year. Investors should also note that many websites still report that Qiwi pays a 5% dividend yield - but it suspended that dividend last year. Qiwi's ADR shares currently trade at roughly 15 times the midpoint of that estimate assuming share counts and foreign exchange rates remain constant. However, it still expects its adjusted net profit to decline 0%-10%. Higher tax rates and unfavorable foreign exchange headwinds also took a bite out of its net profits.įor the full year, Qiwi expects its Payment Services net profit to rise 10%-15% as a few headwinds fade and it reaps the benefits of the Tochka and Rocketbank deals. Qiwi attributes those declines to higher expenses related to its SOVEST and Tochka projects, higher advertising and client acquisition expenses, and higher administrative and credit loss expenses. Its adjusted EBITDA slid 5% to 1.45 billion rubles ($25.3 million) last quarter, its adjusted net profit dropped 15% to 1.08 billion rubles ($18.9 million), and its net profit from its Payment Services segment tumbled 27% to 2.2 billion rubles ($38.6 million). Qiwi's top line growth looks promising, but its bottom line growth is less encouraging. By comparison, analysts expect PayPal's revenue to rise 18% this year, but the stock trades at almost seven times that estimate. This means that Qiwi's ADR shares currently trade at about 3.5 times the midpoint of its adjusted revenue estimate for 2018, but that valuation could fluctuate due to changing foreign exchange rates. Its updated forecast includes revenues from Tochka and Rocketbank for the first half of the year, while its older forecast assumed no meaningful revenue from the two brands. The launch of those projects (especially Tochka and its tech service agreements with Otkritie) boosted Qiwi's revenues from SMEs to 420 million rubles ($7.3 million), compared to nothing in the prior year quarter.įor the full year, Qiwi expects its adjusted revenues to rise 15%-20%, compared to its prior forecast for 12%-16% growth. Qiwi's first quarter figures include its new revenues from Tochka and Rocketbank. Qiwi attributes that growth to rising e-commerce and money remittance transactions. Its total Payment Services volume climbed 20% to 249.2 billion rubles ($4.4 billion). Qiwi's adjusted net revenue rose 41% annually to 4.1 billion rubles ($71.6 million) last quarter as its Payment Services segment revenue rose 26% to 3.7 billion rubles ($64.1 million). Otkritie nearly took a majority stake in Qiwi last year, but the deal was terminated after an insufficient number of shares were tendered. The acquisition of those brands, which were previously held by Russian banking giant Otkritie, formed the foundation for a new joint venture between Qiwi, Tochka, and Otkritie earlier this year. Qiwi recently acquired two other banking brands, Tochka and Rocketbank, to expand its presence with small to medium-sized enterprises (SMEs). It also offers pay-by-installment card systems through its SOVEST brand, along with other value-added services. Like PayPal, Qiwi provides Visa -branded prepaid cards. Its total number of Wallet users rose 13% annually last quarter to 20.3 million. ![]() Qiwi Wallet, which provides customer-to-merchant and peer-to-peer transfers, is similar to PayPal's core app. Users can send payments via online and mobile channels, or through its network of over 150,000 kiosks and terminals. It provides online payment services in Russia, Kazakhstan, Moldova, Belarus, Romania, the United Arab Emirates, and other overseas markets. Qiwi is based in Cyprus, but it generates most of its revenue from Russia.
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