Shares in Russian payment service provider QIWI have reached $23.50, their highest price since they were launched in a Nasdaq IPO at the start of May.
The company’s shares did not immediately fare so well after they went on sale at $17, falling as low as $15.62 on the 29th of May. However, they rebounded on 4th June when the company announced that net profit for the first quarter was three times higher than for the same period last year ($14.7 million compared to $4.3 million), rising by 8% on the day of the announcement.
The company explained that the growth was chiefly driven by increased revenue and significant operating leverage.
Shares continued to increase in value throughout June, and are now close to the target value, set by JPMorgan last year, of $24. However, JPMorgan analyst Aleksey Gogolev advises caution, reckoning that in order for the company’s shares to continue to grow faster than the market, some “positive surprises” will be needed. These could be in the form of rapid growth of advertising revenue on QIWI’s thousands of payment terminals, partnership with leading Russian supermarkets or an increase in profits from e-commerce payment processing.
120,000 cash machines, 11 million online users
As reported earlier by East-West Digital News, Qiwi, established in 2007, is a leading provider of cash and online payment services in Russia and Kazakhstan. The company also operates in 20 other countries in Europe, Asia, Africa and the Americas. A majority stake is owned by Qiwi’s management, while the Mail.ru Group and Japan’s Mitsui have minority stakes.
The operator dominates the Russian cash payment terminals market with more than 120,000 payment processing machines across the country. Russians use these nearly ubiquitous kiosks to pay for virtually everything from mobile phone bills to utilities, taxes, and fines.
Over the last few years, the company has gone online, providing 11 million users with electronic wallets and offering new products in partnership with VISA.
