Freedom (US:FRHC) Seeking Alphaยท2024-06-19 11:20Financial Performance - Freedom Holding reported consolidated revenue of $1.64 billion for fiscal 2024, a 105.5% increase year-over-year, and net profit of $375 million, an 82.4% increase year-over-year, resulting in an EPS of $6.37, up 93.6% year-over-year [1] - The company's assets grew from $5 billion to $8.3 billion, marking a 63% increase, with significant growth in margin lending, brokerage receivables, issued loans, and trading securities [8] Market Position and Valuation - Freedom Holding is relatively under-covered in the market, which may present hidden investment opportunities [1] - The company faces challenges in comparative valuation due to a lack of direct peers in the Central Asian region, with Kaspi being the closest comparable entity [2] - The current price-to-earnings ratio is 14.55x, with a projected decline to 13.77x, indicating a potential target price of $122.80 by the end of 2025, representing an upside potential of 50.4% [4] Business Segments and Growth Strategy - The brokerage business generated $617 million in revenue, a 60.4% increase, while banking revenues surged 151% to $615 million, and the insurance segment doubled to $341 million [21] - The company integrated 13 new companies and expanded into new markets, including Austria, Belgium, Bulgaria, Italy, and the Netherlands, indicating a strong organic growth strategy [21] - Freedom Holding has diversified its investments beyond financial services, investing over $100 million into startups and acquiring a payment system, which supports its vision of developing a comprehensive digital fintech ecosystem [21] Regulatory and Market Sentiment - The negative perception of Freedom Holding as a target for short sellers is expected to diminish, potentially reducing the discount applied to its valuation [2] - The company has effectively addressed allegations made by Hindenburg Research, which has likely improved its credibility in the market [12][21]