Humo Under New Ownership: Paynet to Replace Kaspi.kz – What Lies Ahead

The purchase of Humo has become one of the most discussed events of the last months in the field of privatisation in Uzbekistan. Anvar Isamukhamedov, CEO of Paynet, expressed confidence that “Humo’s synergy with other payment market players will allow it to preserve and multiply its achievements”. Kursiv Uzbekistan talked to experts about why Kazakhstan’s Kaspi.kz abandoned the deal and the prospects for the payment system with a new owner.

Kaspi left but promised to be back

The Agency for State Assets Management announced the start of privatisation of the state’s stake in Humo this summer. In August, it became known that Kazakhstan’s Kaspi.kz was interested in buying the payment system. However, as early as November, the financial giant backed out of the deal without specifying the reasons but promised to continue looking for opportunities to play a role in Uzbekistan’s digital transformation.

“Exact information about the reasons for the exit is available only to the parties to the deal, who are bound by confidentiality agreements,” commented Rustam Mukhametshin, an independent expert in the financial sector and management consulting. According to him, M&A deals involve complex negotiations where the parties agree on the value and other conditions. “For example, it is important for the state not only to receive funds but also to ensure the stability of the payment system. Therefore, some points may become commercially unacceptable for the buyer,” he adds.

At the last stage of privatisation, three bidders competed for Humo, but Paynet offered the highest price—$65 mln—which ensured its victory.

Is the price fair?

Kursiv Uzbekistan experts believe that the purchase price is justified, although considering the company’s prospects, one could expect a higher value.

“The $65mln deal looks quite justified, although we could have expected more competition for such a high-quality asset and higher price offers,” Avesta Investment Group analyst Zakhro Murtazayeva said.

She notes that given Humo’s strong infrastructure—more than 30 mln issued cards, 6.4 thousand ATMs, and over 210 thousand terminals—and its high penetration in the regions, a slight undervaluation is possible. The P/E (x5.6) and P/B (x2.6) multiples confirm this. For example, when TBC acquired Payme, the earnings multiple exceeded x10. However, compared to the Uzcard deal, where the P/E was only x0.4, Humo’s valuation seems fair.

Odil Musaev, managing director of Alkes Research, agrees that the deal’s value reflects market consensus. “Humo has significant infrastructure scale and a strong market position. These factors make the deal valuation of $65mln reasonable,” he believes.

Expert Rustam Mukhametshin adds that, at the current profitability level, an investment in Humo could pay off in 5 to 7 years.

Prospects of Humo under the leadership of Paynet

Experts believe that Humo’s acquisition will open new opportunities for the development of the company and Uzbekistan’s payment ecosystem.

Prior to the deal, Paynet was already among the top three non-bank mobile applications in terms of the number of transactions through Humo cards, occupying 14% of the market, following Click and Payme. Murtazayeva believes Paynet can now gain a competitive advantage by increasing its share of transactions and offering more diverse services. She believes this is possible thanks to integration with Paynet’s extensive network of payment terminals (more than 25,000 points) and Humo’s 6,400 ATMs.

According to her, Humo already has a strong technical base, including contactless payments, HUMOPay and SoftPOS.

“In the international arena, Humo, having already started cooperation with neighbouring countries, will be able to enter new markets using Paynet as an operational base. Together, they can develop regional products such as cross-border transfers or integration with mobile wallets. This will strengthen Paynet’s position as a regional leader and allow it to offer more diverse financial solutions,” the analyst adds.

Odil Musaev sees significant potential in leveraging Paynet’s expertise. “Paynet is known for its innovative solutions, such as the launch of Paynet Crypto, an online platform for buying crypto-assets. Integrating such technologies into Humo can accelerate development and increase the company’s competitiveness,” he notes.

Murtazaeva notes that at the end of 2023, Humo’s share in the P2P transactions segment was 34.3%, compared to 31.7% in 2022. The expert assumes that it will continue to grow in the near future.

“With its strong positions in the POS and acquiring segments, Humo will be able to offer enhanced payment solutions, especially in regions where its reach is already leading,” emphasised Avesta Investment Group.

Key challenges

Retaining Humo’s customers’ trust will be one of Paynet’s key challenges. “It is important to communicate the benefits of the deal to users and ensure transparent communication,” says Zakhro Murtazaeva.

“The transfer of Humo into private hands will increase competition in the market. It will stimulate all participants, including Uzcard and international payment systems, to improve the quality of services,” Odil Musayev emphasises. He adds that increased competition may lead to lower tariffs and better user conditions.

Rustam Mukhametshin sees challenges in organisational and technological aspects. “The first thing that needs to be solved is organisational issues. Technological integration can be postponed for the time being,” he summarised.