Kazakhstan Stocks — Valuations, P/E & Dividends

This season's Kazakhstan corporate tape is defined by one violent divergence: the top of the growth table is all hard assets and silicon. Semiconductor memory revenue rose a median 256.8% year over year, gold mining 199.1%, semiconductors and electronics 130.0%, fertilizers 91.9%. The bottom is a different world: gas processing fell 33.2%, toll roads 12.0%, insurance 11.8%, nickel and lithium 9.7%. The spread between the best and worst industry median is roughly 290 percentage points — not a rotation, a rout.

Revenue growth by industry (median YoY)

Memory chips and gold miners delivered the season's most explosive growth

SK hynix is the single most impressive print: revenue +256.8% year over year, EBITDA +420.9%, in an industry whose median revenue growth was also +256.8%. Winbond Electronics added +184.7% revenue, and Samsung Electronics +130.0%. This is not a broad tech recovery — it is a memory-specific squeeze, and the market is paying for it: SK hynix trades at just 5.6x earnings despite that growth.

In gold, SOLIDCORE posted revenue +199.1% and net profit +432.9%, while Genesis Minerals grew revenue +89.4% and net profit +172.1%. The median gold miner still grew revenue +42.8%, so this is a sector-wide wave, not a one-off. Even the laggards in this group — Evolution Mining at +27.7% revenue — would be heroes in most other industries.

Gas processing and toll roads are the season's ugly underbelly

ADNOC Gas is the clearest warning sign: revenue -33.2%, EBITDA -42.0%, net profit -52.0% year over year. The pain is not isolated — Salik, the toll-road operator, saw revenue -12.0% and net profit -16.4%, while Air Arabia posted revenue -0.2% but net profit -74.9% as margins collapsed. Insurance was the weakest industry median at -11.8%, with Old Mutual revenue -32.7% and Momentum -57.0%. These are not cyclical dips; they are structural margin squeezes.

The plot twist: ASBN accelerated revenue growth while profit fell — a red flag, not a triumph

ASBN's revenue growth accelerated from +45.0% in the prior period to +45.2% year over year, but net profit fell -35.4% — worse than the prior period's -31.5% decline. That is the definition of growth without earnings: the bank is buying revenue at the expense of profitability. Contrast that with Capitec Bank, where revenue surged +94.8% and net profit still rose +19.2%. The market is rewarding the latter: Capitec trades at 31.2x earnings, ASBN at 9.8x.

Cheap for the growth: Emaar Development at 3.7x earnings and SK hynix at 5.6x

Emaar Development grew revenue +32.1% and net profit +43.6% yet trades at just 3.7x earnings and 0.5x EV/EBITDA — absurdly cheap if the growth holds. SK hynix, growing revenue +256.8%, trades at 5.6x earnings and 6.3x EV/EBITDA. At the other extreme, Lynas Rare Earths grew revenue +80.2% but trades at 48.5x earnings and 35.7x EV/EBITDA — priced for perfection. Parkin, with revenue +13.6%, trades at 25.2x earnings and 21.0x EV/EBITDA. The market is paying up for stability and ignoring the cyclical growers.

Income hunters: KEGC yields 16.8% and HALYK 15.6%

KEGC, the power-grid operator, offers a 16.8% dividend yield (DPS 243.15₸ on a 1,448.5₸ price) while growing revenue +31.1% and net profit +59.4% — a rare combination of high yield and high growth. HALYK yields 15.6% (DPS 58.19₸ on 374.0₸) despite a -15.3% net profit decline, which may test the payout. KZTO yields 9.0% (DPS 118.0₸ on 1,315.01₸) with revenue +10.3% and net profit +36.3%. For income investors, KEGC is the standout.

The long view belongs to the compounders: Northern Star Resources has a three-year revenue CAGR of +360.7%, and Genesis Minerals +182.9%. But the most interesting long-term story is SK hynix's +29.6% three-year CAGR — proof that the current memory boom is not a flash in the pan. Watch next quarter for whether ASBN's revenue growth finally translates into profit, and whether ADNOC Gas can stabilize its margins. The divergence will not last forever, but for now, the market is paying for growth and punishing stagnation.

Players: growth & yield (no absolute levels)

Japan Tobacco reported second-quarter 2026 results on 31 July. Revenue reached JPY 1,062.1bn, up 17.0% year on year, EBITDA came to JPY 407.6bn (+36.1%) and net profit to JPY 234.8bn (+44.6%). The EBITDA margin rose to 38.4% from 33.0% a year earlier, while net debt at end-June stood at JPY 848.9bn, or 0.7x LTM EBITDA. The stock trades at 11.8x LTM EV/EBITDA, in line with its own three-year average of 11.5, and the portal's model puts upside to fair value at +22%; with a 3.5% dividend yield and a strong margin, the share looks rather attractive.

Key takeaways

— Revenue rose 17.0% in the second quarter, and growth accelerated relative to prior quarters

— The EBITDA margin climbed to 38.4% from 33.0%, contributing more to profit than revenue growth itself

— Net profit rose 44.6%, but Q4 2025 was a loss-making quarter, so the annual profit base is uneven

— Net debt fell to JPY 848.9bn from JPY 1,083.0bn at 31 March, and the ratio to LTM EBITDA stands at 0.7

— Operating cash flow for the quarter was JPY 291.7bn against capex of JPY 33.3bn

— Dividend yield of 3.5% is backed by payouts funded from profit rather than debt

— LTM EV/EBITDA of 11.8 is in line with the three-year average of 11.5, and the portal model implies +22% upside

Attractiveness

Key figures, JPY bn

Revenue rose 17.0% in the second quarter, and growth accelerated relative to prior quarters

Revenue for the second quarter of 2026 was JPY 1,062.1bn, up 17.0% from a year earlier. For comparison, first-quarter revenue was JPY 924.0bn, fourth-quarter 2025 revenue was JPY 833.6bn and second-quarter 2025 revenue was JPY 907.6bn. The second quarter was therefore the strongest by revenue in the last five quarters.

Revenue growth of 17.0% is well ahead of prior periods. In the first quarter of 2026 revenue was 1.8% above the first quarter of 2025, while in the fourth quarter of 2025 it was 8.1% below the year-earlier level. The acceleration in the second quarter reflects a recovery in volumes and pricing factors, although the report does not disclose the exact drivers.

Revenue over the trailing twelve months was JPY 3,719.2bn. That figure spans both strong quarters and the weak fourth quarter of 2025, so the annual base looks smoother than the quarterly dynamics.

The EBITDA margin climbed to 38.4% from 33.0%, contributing more to profit than revenue growth itself

EBITDA for the second quarter of 2026 was JPY 407.6bn against JPY 275.3bn a year earlier, up 36.1%. With revenue growth of 17.0%, this means the EBITDA margin rose from 33.0% to 38.4%. That margin gain of about 5.4 percentage points adds roughly JPY 57bn to EBITDA in absolute terms.

Operating profit rose to JPY 337.1bn from JPY 226.7bn a year earlier, or 48.7%. That is slightly faster than EBITDA growth, suggesting depreciation and other operating costs grew more slowly than revenue. Net profit came to JPY 234.8bn against JPY 162.4bn, up 44.6%.

The margin expansion may have been supported by a lower share of selling and administrative costs in revenue and by operating leverage on higher volumes. The report does not disclose which cost line made the main contribution, so we limit ourselves to stating that the margin rose substantially and that this is the main source of profit growth.

Net profit rose 44.6%, but Q4 2025 was a loss-making quarter, so the annual profit base is uneven

Net profit for the second quarter of 2026 was JPY 234.8bn, up 44.6% from the second quarter of 2025. It is worth remembering, however, that the company posted a loss of JPY 1.6bn in the fourth quarter of 2025. That makes quarterly dynamics uneven and complicates year-on-year comparisons.

Over the trailing twelve months net profit was JPY 622.1bn. That includes the strong second and third quarters of 2025, the weak fourth quarter and the recovering first quarter of 2026. The annual profit base is therefore lower than one might expect from a stable quarterly run rate.

Profit growth in the second quarter of 2026 is partly explained by the low base of the second quarter of 2025, when the margin was lower. But the absolute level of profit – JPY 234.8bn – is the highest in the last five quarters, which speaks to the strength of the current period.

Net debt fell to JPY 848.9bn from JPY 1,083.0bn at 31 March, and the ratio to LTM EBITDA stands at 0.7

Net debt at 30 June 2026 was JPY 848.9bn against JPY 1,083.0bn at 31 March 2026, a decrease of JPY 234.1bn over the quarter. A year earlier, at 30 June 2025, net debt was JPY 761.2bn, so over twelve months it rose by JPY 87.6bn.

The ratio of net debt to trailing-twelve-month EBITDA is 0.7. That is a moderate level that does not put pressure on financial stability. The quarterly decline in debt came on the back of strong operating cash flow of JPY 291.7bn.

Interest expense is not disclosed in the provided data, but with this level of debt and strong EBITDA the company has considerable headroom to service its obligations. It is important to note that the quarterly decline in debt does not necessarily indicate a sustained trend, as debt can fluctuate with seasonal factors and repayment schedules.

Operating cash flow for the quarter was JPY 291.7bn against capex of JPY 33.3bn

Operating cash flow in the second quarter of 2026 was JPY 291.7bn, well above the first quarter (JPY 39.6bn) and the second quarter of 2025 (JPY 174.0bn). Such a strong flow reflects high profitability and efficient working-capital management.

Capital expenditure for the quarter was JPY 33.3bn, slightly above the second quarter of 2025 (JPY 30.6bn). Free cash flow was therefore about JPY 258.4bn, covering dividend payments and debt reduction.

Over the trailing twelve months operating cash flow was JPY 677.9bn. That is a solid base for funding capex and dividends. The company retains a high ability to generate cash even in periods with weaker quarterly results.

Dividend yield of 3.5% is backed by payouts funded from profit rather than debt

The trailing-twelve-month dividend yield is 3.5%. The company pays dividends out of net profit, which over the trailing twelve months was JPY 622.1bn. With such profit and cash flow, the payouts look sustainable.

Our estimate for the current-year dividend assumes the payout ratio stays close to its current level. With LTM net profit of JPY 622.1bn and a payout ratio of about 50%, the dividend could be around JPY 311bn, which at the current market capitalisation of JPY 13,385.0bn implies a yield of about 2.3%. That estimate depends on the board's final decision and may be adjusted.

A yield of 3.5% exceeds the key rate, making the stock attractive to income-oriented investors. It should be borne in mind, however, that dividend payments could be cut if profit deteriorates or capex rises. The main risk is a possible reduction in the payout ratio if weak quarterly results like the fourth quarter of 2025 recur.

LTM EV/EBITDA of 11.8 is in line with the three-year average of 11.5, and the portal model implies +22% upside

The trailing-twelve-month EV/EBITDA multiple is 11.8, just 2% above the three-year average of 11.5. This means the stock is valued by the market almost exactly as it has been on average over the past three years, with no notable premium or discount to its own history.

The portal's model, which links EBITDA growth to a target multiple, puts the upside to fair value at +22%. This is our own estimate, not a market consensus. It rests on the current level of profit and assumes the margin and growth rates are maintained.

For comparison, the LTM P/E is 21.5 and ROE is 22.2%. The combination of a moderate EV/EBITDA and high return on equity suggests the company uses capital efficiently and the current valuation does not look stretched. Realising the upside, however, requires the company to hold the margin and avoid another quarterly loss like the one in the fourth quarter of 2025.

Valuation on the latest reported figures

Bottom line

The report's strengths are revenue growth of 17.0%, an EBITDA margin expanding to 38.4% and net profit of JPY 234.8bn. Part of that growth, however, reflects the low base of the second quarter of 2025, and LTM profit of JPY 622.1bn is lower than one might expect from a stable run rate. Debt fell over the quarter but rose over the year. The key question for a holder is whether the company can hold the margin and avoid another quarterly loss. With EV/EBITDA in line with its history and a 3.5% dividend yield, the share looks rather attractive.

TSMC reported results for the third quarter of 2026. Revenue reached TWD 1,494.2bn, up 50.9% year on year, net profit came to TWD 763.1bn (+68.7%), and EBITDA was TWD 876.4bn (+32.1%). Revenue growth accelerated from +36.0% in the second quarter, but the EBITDA margin fell to 58.7% from 67.0% a year earlier. At an EV/EBITDA of 17.6 against its own three-year average of 14.0 the share is more expensive than its history, so at the current price it is rather attractive than not, but without room for error.

Key takeaways

— Revenue grew 50.9% year on year, and the pace accelerated from 36.0% in the second quarter

— Net profit added 68.7%, outpacing revenue on a margin rise to 51.1%

— EBITDA grew only 32.1% because its margin fell from 67.0% to 58.7%

— Leverage is negative: net debt to LTM EBITDA stands at -0.51

— A dividend yield of 1.0% is modest against ROE of 45.9% and a price above its history

— EV/EBITDA of 17.6 is 26% above its own three-year average of 14.0

— The portal model puts upside to fair value at +17%

Attractiveness

Key figures, TWD bn

Revenue grew 50.9% year on year, and the pace accelerated from 36.0% in the second quarter

In the third quarter of 2026 TSMC's revenue reached TWD 1,494.2bn, 50.9% more than a year earlier. In the second quarter growth was a more modest 36.0%, in the first 35.1%. The acceleration from the previous quarter is notable: the company added more than 15 percentage points to its pace.

Over the last twelve months revenue came to TWD 4,944.8bn. The quarterly dynamics show demand is not slowing: each successive quarter of 2026 is larger than the previous one, and the third quarter was the strongest of the year.

Accelerating revenue is the main argument for the growth story. It does not automatically mean profit will grow at the same pace: as shown below, costs are rising faster than revenue.

Net profit added 68.7%, outpacing revenue on a margin rise to 51.1%

Net profit in the third quarter of 2026 was TWD 763.1bn, 68.7% more than a year earlier. Profit growth outpaced revenue growth by 17.8 percentage points. The reason is the margin: the net margin rose to 51.1% from 45.7% a year earlier.

Over the last twelve months net profit came to TWD 2,527.6bn. That is a level, not a growth rate: the rate belongs to the reported quarter. Return on equity over the same period was 45.9%, pointing to a high return on capital.

Rising net margin alongside a falling EBITDA margin is a divergence worth keeping in mind. It means something below the operating line improved: either financial income or the tax burden. The facts do not give the cause, so we state it plainly: profit grew faster than revenue, while EBITDA grew slower.

EBITDA grew only 32.1% because its margin fell from 67.0% to 58.7%

EBITDA in the third quarter of 2026 was TWD 876.4bn, up 32.1% year on year. That is markedly slower than revenue (+50.9%). The EBITDA margin fell to 58.7% from 67.0% a year earlier – a drop of 8.3 percentage points.

Operating profit in the reported quarter equals EBITDA at TWD 876.4bn. That means depreciation is not broken out in the operating line, and the entire gap between revenue and operating profit comes from cost of sales and operating expenses. Those are what ate the margin.

Over the last twelve months EBITDA came to TWD 3,413.8bn. Falling margin alongside accelerating revenue is the main warning signal in the report. If costs keep rising faster than revenue, profit will stop outpacing revenue, and the current valuation will become vulnerable.

Leverage is negative: net debt to LTM EBITDA stands at -0.51

TSMC's net debt at the latest annual reporting date is negative at TWD -1,734.9bn. That means cash and equivalents exceed debt obligations. The ratio of net debt to EBITDA over the last twelve months is -0.51.

Negative leverage is a strength of the balance sheet. It gives the company freedom in capital spending and dividends and reduces risk if demand slows. We state the ratio as a level, without comparison to the past: no earlier value is in the facts.

Cash flow for the third quarter of 2026 is not disclosed in the facts, so this report does not allow a judgement on how profit converts into cash. In the second quarter of 2026 operating cash flow was TWD 783.4bn against capital expenditure of TWD 508.4bn – the last complete pair in the facts.

A dividend yield of 1.0% is modest against ROE of 45.9% and a price above its history

TSMC's dividend yield over the last twelve months is 1.0%. With a market capitalisation of TWD 61,848.8bn that is a small payout relative to the company's value. For a growth issuer with ROE of 45.9% such a yield is typical: profit is largely reinvested.

Our estimate of the current-year dividend follows from the facts: with LTM net profit of TWD 2,527.6bn and a 1.0% yield, payouts are around 1% of market capitalisation. The exact payout ratio is not disclosed in the facts, so the estimate rests on two things – profit and distribution policy. If profit stays at the LTM level, the dividend is unlikely to grow much faster.

A 1.0% yield is below the key rate, but for a growth stock that is not the main criterion. The dividend here is more a confirmation of cash generation than a source of income. A smaller payout could come from falling profit or rising capital expenditure, which already reached TWD 508.4bn in the second quarter of 2026.

EV/EBITDA of 17.6 is 26% above its own three-year average of 14.0

The EV/EBITDA multiple over the last twelve months is 17.6. Its own three-year average is 14.0. The share trades 26% above its history on this multiple. That is expensive relative to itself, not relative to the sector: no sector comparison is in the facts.

The P/E over the last twelve months is 24.5. With ROE of 45.9% and negative net debt that level does not look like a bubble, but it leaves no room for error either. The market has already priced in continued revenue acceleration.

The portal model puts upside to fair value at +17%. That is our own estimate, not a market consensus. It rests on EBITDA growth and a target multiple. If the EBITDA margin keeps falling, the model will have to be revised down.

The portal model puts upside to fair value at +17%

On the portal model TSMC's fair value is 17% above the current market price. The model links EBITDA growth to a target multiple and compares the result with market capitalisation of TWD 61,848.8bn. This is our internal estimate, not a recommendation or a market forecast.

Upside of +17% is moderate. It does not offset the risk of further EBITDA margin compression. If the margin returns to last year's 67.0%, the upside grows; if the decline continues, it disappears.

For a holder two things matter now: whether the company holds the margin and whether revenue acceleration persists. The first drives profit, the second drives valuation. Both currently favour the share, but the margin of safety is thin.

Valuation on the latest reported figures

Bottom line

The report's strength remains revenue: TWD 1,494.2bn in the third quarter, 50.9% year-on-year growth and acceleration from 36.0% in the second quarter. Net profit added 68.7%, and ROE stands at 45.9%. But the EBITDA margin fell to 58.7% from 67.0%, and that is the main question for a holder: whether the company can contain costs. Valuation is already above its history – EV/EBITDA of 17.6 against an average of 14.0 – and a dividend yield of 1.0% offers no support. At the current price the share is rather attractive, but without room for error.

On 25 November Evolution reported results for the third quarter of 2026. Revenue came in at EUR 526.1 million, up 3.7% year on year after a 1.2% decline a quarter earlier; EBITDA was EUR 333.8 million (down 0.9%) and net profit EUR 243.3 million (down 3.6%). Top-line growth resumed, but the EBITDA margin fell from 66.4% to 63.5% and the net margin from 49.8% to 46.2%. At an EV/EBITDA of 8.2 against its own three-year average of 9.7 and a portal-model upside of +6%, the share looks rather attractive, though the weakness in margin and profit keeps the rating from going higher.

Key takeaways

— Revenue accelerated to +3.7% year on year after -1.2% a quarter earlier

— EBITDA fell 0.9% despite revenue growth, and the margin dropped from 66.4% to 63.5%

— Net profit declined 3.6%, and its margin from 49.8% to 46.2%

— Operating cash flow of EUR 366.1 million exceeded quarterly EBITDA

— Net debt remains negative, and the ratio to LTM EBITDA is -0.5

— EV/EBITDA of 8.2 is 15% below its own three-year average of 9.7

— The portal model implies +6% upside to fair value

Attractiveness

Key figures, EUR bn

Revenue accelerated to +3.7% year on year after -1.2% a quarter earlier

In the third quarter of 2026 revenue reached EUR 526.1 million, up 3.7% year on year. A quarter earlier the dynamics were negative at -1.2%, and in the first quarter at -1.5%. Growth has therefore resumed and accelerated relative to the second quarter.

The quarterly sequence shows the decline was short-lived: after EUR 513.0 million in the first quarter and EUR 517.8 million in the second, revenue returned above EUR 520 million. For a company with a high profitability base, even such a modest revenue increase means a substantial absolute contribution to EBITDA, provided costs do not grow faster.

The acceleration in revenue is the main positive fact of the report. However, growth of 3.7% alone did not offset the margin decline, so EBITDA and profit came in lower year on year.

EBITDA fell 0.9% despite revenue growth, and the margin dropped from 66.4% to 63.5%

EBITDA for the third quarter of 2026 was EUR 333.8 million, down 0.9% year on year. With revenue up 3.7%, this means costs grew faster than income. The EBITDA margin fell from 66.4% to 63.5%, a decline of 2.9 percentage points.

Operating profit was EUR 290.3 million, also below the prior-year level. The gap between EBITDA and operating profit is small, typical of a business with a low depreciation burden. Judging by the revenue-to-EBITDA relationship, the pressure on margin came through operating costs rather than depreciation.

A 2.9 pp margin decline on revenue of EUR 526.1 million corresponds to roughly EUR 15 million of EBITDA foregone relative to maintaining last year's profitability. That is a substantial sum, which more than offset the entire absolute increase in revenue.

Net profit declined 3.6%, and its margin from 49.8% to 46.2%

Net profit for the third quarter of 2026 was EUR 243.3 million, down 3.6% year on year. The net margin fell from 49.8% to 46.2%. The decline in profit is slightly deeper than that in EBITDA, pointing to higher below-the-line charges, likely financial or tax items.

The absolute level of profit remains very high: EUR 243.3 million per quarter is about 46 euro cents per euro of revenue. For a company that has long operated at a margin near 50%, the current level does not look anomalous, but it is below its usual level.

Over the trailing twelve months net profit was EUR 1,053.4 million. This figure is used for the LTM P/E of 12.0. The 3.6% quarterly decline does not change the picture dramatically, but it confirms that the pressure on profitability is not a one-off.

Operating cash flow of EUR 366.1 million exceeded quarterly EBITDA

Operating cash flow for the third quarter of 2026 was EUR 366.1 million, above quarterly EBITDA of EUR 333.8 million. The excess is explained by a positive working-capital change or non-cash items not disclosed in the facts. Importantly, the flow remains strong and fully covers capital expenditure needs.

Capital expenditure for the third quarter is not disclosed, but in the first and second quarters it was EUR 34.6 million and EUR 34.7 million respectively. On that basis, free cash flow for the quarter exceeds EUR 300 million, more than double the coverage of net debt reduction or dividend payments.

Over the trailing twelve months operating cash flow was EUR 1,301.6 million against LTM EBITDA of EUR 1,442.8 million. The ratio below one is normal for a company with a high share of non-cash charges, but the quarterly flow shows that cash generation has not suffered from the margin decline.

Net debt remains negative, and the ratio to LTM EBITDA is -0.5

Net debt at the latest balance-sheet date is minus EUR 726.9 million, meaning the company has a net cash position. The ratio of net debt to LTM EBITDA is -0.5. This means cash and equivalents exceed debt obligations, and the company does not depend on borrowed funding.

Negative net debt against LTM EBITDA of EUR 1,442.8 million provides a substantial cushion. Even if the cash position shrinks, the company would retain the ability to service obligations and fund investment from its own resources.

Interest on debt is not disclosed in the facts, but with a negative net position interest expense is likely small or offset by interest income. This supports net profit and explains why a 0.9% decline in EBITDA led to a 3.6% decline in profit: the below-the-line effect may be tax-related rather than debt-related.

EV/EBITDA of 8.2 is 15% below its own three-year average of 9.7

The LTM EV/EBITDA multiple is 8.2 against its own three-year average of 9.7. The share trades 15% below its historical valuation on this multiple. This means the market values current EBITDA more cheaply than it did on average over the past three years.

The LTM P/E is 12.0 on a market capitalisation of EUR 12,618.5 million. For a company with a net margin near 46% and negative net debt, that level looks low. However, the decline in margin and profit in the reported quarter may explain why the market is not willing to pay more.

The company's own three-year average is the only valid comparison base, since no sector or peer data is in the facts. On that basis the share is cheaper than usual, and this is the main argument in favour of attractiveness.

The portal model implies +6% upside to fair value

On the portal's model, which values EBITDA growth at a target multiple against market capitalisation, the upside to fair value is +6%. This is the portal's own estimate, not a market consensus or a target price.

Upside of +6% is modest but positive, and it is consistent with the conclusion that the share trades below its historical valuation. If EBITDA returns to growth and the margin stabilises, the upside could increase.

The portal-model estimate does not account for a possible further decline in margin. If pressure on profitability persists, actual fair value would be lower, and the current discount to history could prove justified.

Valuation on the latest reported figures

Bottom line

The strong side of the report is the resumption of revenue growth to +3.7% year on year after two quarters of decline, along with operating cash flow of EUR 366.1 million exceeding EBITDA. The weak side is the 0.9% decline in EBITDA and 3.6% decline in net profit due to margin compression. Negative net debt and an EV/EBITDA of 8.2 against a three-year average of 9.7 support the valuation. The portal model implies +6% upside. The verdict is rather attractive: the discount to its own history and the net cash position outweigh the current margin decline, but a stabilisation in profitability is needed for a higher rating.

Kazakhstan grows one and a half times as fast as the world economy, yet its stock market trades at half the emerging-market multiple. At the end of September the MSCI Kazakhstan index traded at 7 times trailing earnings, against 14.9 for MSCI Emerging Markets and 25.4 for the US. Its dividend yield was 6.1%, against 1.5% for the world index.

In the first half of 2026 profit grew fastest in gold, oil and the power grid. Solidcore earned 5.3 times more than a year earlier, KazMunayGas 69% more, KEGOC 59% and AltynGold 58%. The banks and Kazatomprom earned less. The cheapest names with growing profit are KEGOC, AltynGold, Solidcore and KazTransOil.

Halyk is a stock we have historically made a lot of money on; AltynGold is in our portfolio today. Halyk's profit grew eightfold from 2016, its dividend from zero to KZT 58 per share. Right now profit is falling and we watch two numbers. AltynGold is the cheapest of the 14 names on reported earnings, but a strong tenge is eating its margin.

The catch is liquidity, the role of the state and dependence on oil. That is why cheapness can last. Details, charts and sources below. Prices as of 30 September 2026.

Disclosure: Enhanced Investments holds positions in Halyk Bank and AltynGold.

The economy has grown 4.3x since 2000; the world 2.5x

According to the IMF, Kazakhstan's real GDP grew 5.8% a year on average in 2000-2025, against 3.5% for the world, 5.1% for emerging and developing economies and 2.2% for the US. Growth was 6.5% in 2025. For 2026 the IMF expects 4.6%, against 3.1% for the world, 2.3% for the US and 1.1% for Russia.

The population is about 20.5 million, growing about 1% a year, with a median age of 29.7. GDP per capita is about $14,900. In August S&P raised the sovereign rating to BBB, the first BBB since 2016; Fitch also rates it BBB, Moody's Baa1. The National Fund held $68.2bn of foreign-currency assets on 1 September.

Oil is falling, yet the economy grows 4%, carried by construction and manufacturing

GDP grew 4.1% in January-August. Oil output fell 8.4% in eight months after drone strikes on Caspian Pipeline Consortium infrastructure and a fire at Tengiz; the annual plan was cut from 100.5 to 96 million tonnes. The non-oil economy grows 5.4%: construction +15.6%, manufacturing +8.4%, transport +7.3%, trade +6%.

The tenge is up 14.7% this year; the base rate is 16.25% with inflation at 9.8%

The official rate on 1 October was KZT 440.86 per dollar, against 505.53 at the start of the year. Expensive oil and National Fund FX sales hold it up, and since September the National Bank has added sales to mirror its gold operations. The base rate is 16.25%, next decision on 23 October; the National Bank has warned that room for further cuts is limited.

For a dollar investor the strong tenge added 14.7% to the return on tenge stocks this year. It cuts both ways: if oil gets cheaper or the National Fund sells less currency, the tenge can weaken.

The market trades at 7x earnings – half the emerging-market multiple

MSCI index pages as of 30 September: MSCI Kazakhstan – P/E 7.0, dividend yield 6.1%; MSCI Indonesia – 9.9; MSCI Emerging Markets – 14.9; MSCI India – 22.0; MSCI World – 22.7; MSCI USA – 25.4. MSCI Kazakhstan holds three stocks: Kaspi.kz (43%), Kazatomprom (31%) and Halyk (26%). Across all 12 profitable listed companies, the median P/E on annualised first-half earnings is about 8.

The reasons are clear: a small, illiquid market, state control of the largest companies, oil dependence, and global funds keeping Kazakhstan on the periphery. That is exactly why you can buy growing businesses here with double-digit dividend yields.

Dividends: Halyk 15.4%, KEGOC 10.7%, KazTransOil 9.3%

Only an annual yield is comparable with the base rate. For 2025 Halyk paid KZT 30.10 in May and another 28.09 in September, 58.19 in total, or 15.4% of the price. KEGOC pays twice a year; the board proposed KZT 81.25 for the first half of 2026, about 10.7% annualised. KazTransOil paid KZT 118 for 2025 (9.3%). Kaspi.kz is paying quarterly again; at KZT 1,000 a quarter the next 12 months come to about 9%.

First half: gold, oil and the grid grow; banks and uranium earned less

• Solidcore (formerly Polymetal): revenue $972m vs $325m, net profit $453m vs $85m, output +71%. Net cash $648m.
• KazMunayGas: net profit KZT 904bn vs 534bn on Brent at $92 vs $72 and KZT 441bn of dividends from Tengizchevroil. Net debt rose from 375 to 983bn.
• KEGOC: revenue +31%, cost of sales +16%, net profit KZT 54.6bn (+59%). Operating profit was held back by a one-off KZT 11.5bn grid revaluation. Debt rose by a third to KZT 215bn.
• Kcell: profit +40.5%, but free cash flow was KZT -37.6bn, cash fell to 2.1bn from 32bn in December, and the report now carries a going-concern section.
• KazTransOil: profit +33%, but operating profit only +6.7%; the rest came from deposit interest.
• Kaspi.kz: revenue +23%, profit KZT 511bn, flat year on year, held back by expensive deposits and Turkey's Hepsiburada.
• Halyk: profit KZT 447.6bn (-15%), ROE down from 33.6% to 24.8%.
• Bank CenterCredit: profit KZT 123bn (-16%); bank profit tax rose to 25% from 2026.
• Kazatomprom: profit to shareholders KZT 157bn vs 202bn (-23%), cost per pound +37%.
• Air Astana: revenue +16%, but a $21m loss vs an $11m profit.

Halyk: profit up 8x in nine years – a stock we have made a lot of money on

Halyk is Kazakhstan's largest bank. From 2016 to 2025 its IFRS net profit grew from KZT 131bn to KZT 1,058bn, and its dividend from zero to KZT 58.19 per share. Its London-listed GDR cost $3.60 in April 2016 and $33.55 on 2 October 2026. Over the last 12 months the bank paid about $5 per GDR in dividends.

Our average entry price is $12.76 per GDR – a 2.6x gain, and last year's dividends alone were almost 40% of our entry price.

Today the picture is more mixed. First-half profit fell 15%, and ROE dropped from 33.6% to 24.8%. The bank names the reasons: higher mandatory reserves, tighter consumer-lending rules, more expensive deposits; loan-loss provisions rose 69%. Monthly National Bank data show profit down 24% in July but only 3% in August (KZT 76bn vs 79bn), and the stage-3 loan share edged down from 8.3% to 8.1%.

We watch two numbers: monthly profit and the problem-loan share. As long as they don't deteriorate, a bank at 4.6x earnings with a 13-15% yield stays cheap.

AltynGold: the cheapest of the 14, but a strong tenge eats the margin

AltynGold mines gold in East Kazakhstan; its shares trade in London. It is in our portfolio. The half-year report came out on 29 September.

• Revenue $115.2m (+65%), adjusted EBITDA $68.5m (+55%), net profit $42.7m (+58%).
• 24.6k oz sold (+9%) at an average $4,615/oz vs $3,071 a year earlier.
• All-in sustaining cost rose to $1,995/oz from $1,530 for 2025: costs are in tenge, revenue in dollars.
• Net debt $19.3m, 0.15x annual EBITDA. 2026 guidance 52-55k oz; the Teren-Sai mining licence is expected in Q4.
• No dividend yet; the board has said it will revisit the question.

On annualised first-half earnings the P/E is about 4.3 and EV/EBITDA about 2.8 – the lowest of the 14 companies. Yet the shares are down 19% this year in pounds. At today's gold price (about $4,160) and exchange rate (KZT 441/$), assuming about 80% of costs in tenge, annual EBITDA would be about $105m vs $126m over the last 12 months, and EV/EBITDA closer to 3.7. Our platform model, which also assumes gold reverting to its three-year average, shows no upside after the report. What could re-rate it: output growth, the Teren-Sai licence and the start of dividends.

Cheap and growing: KEGOC, AltynGold, Solidcore, KazTransOil

P/E on the chart is market cap over twice first-half profit – rough for seasonal businesses, but fine for comparison. KEGOC trades at about 3.8x with profit up 59%, but the state sets its tariff. Solidcore is at 6.3x with profit up 5.3x, but the shares have doubled this year. KazTransOil is at about 8x, with growth driven by deposit interest. Expensive: Kazatomprom (about 25x), KazMunayGas (12x after a 65% rally), Kcell (about 40x), Kazakhtelecom (about 37x).

The catch: liquidity, the state and oil

• The market is small and illiquid; many KASE stocks trade only every few days. A large position cannot be sold quickly.
• The state controls the largest companies (KazMunayGas, Kazatomprom, KEGOC, KazTransOil, Air Astana) through Samruk-Kazyna. Dividends and tariffs depend on its decisions.
• The economy and budget are tied to oil; the tenge is tied to oil and National Fund FX sales. An oil slump would hit both profits and the currency.
• The market is far from global investors, so cheapness can last – a re-rating is not guaranteed.

Bottom line

Kazakhstan offers a growing economy, companies at under 10x earnings and dividends of up to 15%. For value plus growth, KEGOC, AltynGold and Solidcore stand out. For income, Halyk, if its profit stabilises. KazMunayGas and Kazatomprom look expensive after their rally; Kcell's debt is rising and its cash is running out.

Company cards with financials, multiples and dividend history are on the Enhanced Investments Frontier platform.

Disclosure: Enhanced Investments holds positions in Halyk Bank and AltynGold.

On August 25, Mitsubishi UFJ Financial Group released its results for the second quarter of 2026. Net profit for the reported period came in at JPY 809,427 million, up 48.2% year on year. Net interest income in Q2 reached JPY 2,067,065 million, but its growth from Q1 2026 was only 1.0%. Meanwhile, trailing twelve-month profit stands at JPY 2,690,588 million, and return on equity is 14.4%. In our view, the stock looks attractive: profit is growing faster than net interest income, while the dividend yield of 2.76% and the portal model's 8% upside to fair value support the case.

Key takeaways

— Q2 net profit rose 48.2% year on year to JPY 809,427 million, but net interest income added only 1.0% from Q1

— Net interest income in Q2 was JPY 2,067,065 million – just 1.0% above Q1 2026

— Return on equity of 14.4% and trailing twelve-month profit of JPY 2,690,588 million underpin a dividend yield of 2.76%

— The trailing P/E of 15.0 is above the historical average, but the portal model sees 8% upside to fair value

— A dividend yield of 2.76% with a payout ratio near 40% looks sustainable, but growth is capped by slowing net interest income

Attractiveness

Key figures, JPY bn

Q2 net profit rose 48.2% year on year to JPY 809,427 million, but net interest income added only 1.0% from Q1

Net profit for the second quarter of 2026 came in at JPY 809,427 million, up 48.2% from the same period a year earlier. This is well above the first-quarter 2026 figure of JPY 613,721 million. Such profit growth with only a modest increase in net interest income suggests that the main contribution came from other lines – likely fee income or one-off items that the company does not break out in the provided data.

Net interest income in Q2 reached JPY 2,067,065 million, up just 1.0% from Q1 2026. Year on year, net interest income growth was 27.5% in Q1 2026, but the pace slowed in Q2. This indicates that the interest margin is no longer the main driver of profit.

Trailing twelve-month profit was JPY 2,690,588 million, while net interest income for the same period was JPY 7,966,900 million. The ratio of profit to net interest income over the last twelve months is about 34%, confirming the dependence of profit on non-operating items.

Net interest income in Q2 was JPY 2,067,065 million – just 1.0% above Q1 2026

Net interest income in Q2 2026 was JPY 2,067,065 million, just 1.0% above the Q1 2026 level of JPY 2,047,250 million. This is a sharp slowdown from the 27.5% year-on-year growth in Q1. Such dynamics suggest that the interest margin has stopped expanding, and further profit growth will depend on other revenue sources.

Over the last twelve months, net interest income totalled JPY 7,966,900 million. If quarterly growth remains at 1.0%, the annual figure may increase only marginally. This poses a risk to profit if fee and other income do not continue to grow.

Return on equity of 14.4% and trailing twelve-month profit of JPY 2,690,588 million underpin a dividend yield of 2.76%

Return on equity (ROE) over the last twelve months was 14.4%. This is a high level for the banking sector, supporting stable dividend payments. Trailing twelve-month profit of JPY 2,690,588 million provides dividend coverage.

The trailing twelve-month dividend yield is 2.76%. At the current share price and earnings per share, the payout ratio is estimated at around 40% of profit. This is a moderate level that leaves room for dividend growth if profit continues to rise.

However, dividend growth may slow if net interest income stops growing. In that case, maintaining the yield would require either a higher payout ratio or profit growth from other lines.

The trailing P/E of 15.0 is above the historical average, but the portal model sees 8% upside to fair value

The trailing price-to-earnings (P/E) ratio is 15.0. This is above the company's historical average, which may indicate limited upside. However, the portal model, based on return on equity and price-to-book, estimates 8% upside to fair value.

The company's market capitalisation is JPY 40,363,133 million. With trailing twelve-month profit of JPY 2,690,588 million and ROE of 14.4%, the stock trades at a premium to historical levels, but the portal model sees room for appreciation.

A dividend yield of 2.76% with a payout ratio near 40% looks sustainable, but growth is capped by slowing net interest income

The trailing twelve-month dividend yield is 2.76%. With a payout ratio of around 40% of profit, the company maintains a balance between shareholder payouts and reinvestment. This is a moderate yield that may be attractive against low rates, but it is not exceptionally high.

The main risk to dividends is the slowdown in net interest income growth. If it remains at JPY 2,067,065 million per quarter, the annual figure may not show significant growth, limiting profit and dividend increases. At the same time, a high ROE of 14.4% provides a cushion.

Valuation on the latest reported figures

Bottom line

The strong points of the report were a 48.2% year-on-year rise in net profit to JPY 809,427 million and a high ROE of 14.4%. However, this growth was achieved with almost flat net interest income, raising questions about its sustainability. A dividend yield of 2.76% and the portal model's 8% upside support the stock's appeal, but slowing net interest income is a key risk. Verdict: the stock looks attractive for income-oriented investors, but requires monitoring of the interest margin trend.

Royal Bank of Canada reported third-quarter 2026 results. Net profit came in at CAD 6,022 million, up 11.2% year on year, while net interest income rose 9.1% year on year to 18,511 million. Yet return on equity remains low at 5.6%, and the stock trades at 19.1 times earnings, making it unattractive at current levels.

Key takeaways

— Net profit rose 11.2% year on year to CAD 6,022 million, but that is only 11% above the quarterly profit level a year ago

— Net interest income added 9.1% year on year to 18,511 million, becoming the main driver of profit growth

— Return on equity at 5.6% remains low and does not even cover the risk-free rate, limiting investment appeal

— Dividend yield of 2.35% lags the yield on ten-year Canadian government bonds, making the stock less attractive for conservative investors

— A valuation of 19.1 times earnings looks stretched against a 5.6% ROE and no acceleration in profit growth

— The portal model estimates upside to fair value at +6%, which does not compensate for the risks associated with low profitability

Attractiveness

Key figures, CAD bn

Net profit rose 11.2% year on year to CAD 6,022 million, but that is only 11% above the quarterly profit level a year ago

In the third quarter of 2026, Royal Bank of Canada earned CAD 6,022 million in net profit. That is 11.2% more than in the same quarter last year, when profit was 5,415 million. The growth looks solid, but compared with the previous quarter (5,507 million), profit increased by only 9.3%, indicating no acceleration.

The main source of growth was net interest income, which rose 9.1% year on year to 18,511 million. This is the highest quarterly figure in the last four quarters: in the previous three it ranged from 16,960 to 17,923 million. Thus, profit growth relies on an increase in interest income, not on one-off factors.

Net interest income added 9.1% year on year to 18,511 million, becoming the main driver of profit growth

Net interest income in the third quarter of 2026 reached CAD 18,511 million, up 9.1% from 16,960 million a year earlier. This is the highest quarterly level in at least four quarters: in Q4 2025 it was 17,196 million, in Q1 2026 – 17,923 million, in Q2 – 17,429 million.

The growth in interest income provided the bulk of the profit increase. However, the growth rate of this indicator slowed compared with the first quarter of 2026, when it rose 5.7% quarter on quarter. In the reporting quarter, the quarter-on-quarter increase was 6.2%, slightly higher, but the year-on-year dynamics are more modest than over the trailing twelve months, where net interest income totalled 66,500 million.

Return on equity at 5.6% remains low and does not even cover the risk-free rate, limiting investment appeal

Royal Bank of Canada's return on equity is 5.6%. This is a very low figure for a bank: it is not only significantly below the historical levels of Canadian banks but also does not cover the yield on ten-year Canadian government bonds, which in recent years has fluctuated between 3–4%. At such a profitability level, the bank does not create sufficient value for shareholders.

The low ROE is explained by the fact that the profit of CAD 6,022 million was earned on a substantial equity base. With a market capitalisation of 388,165 million and a P/E of 19.1, earnings per share are low relative to the price. This means investors are paying a significant premium for growth that is not yet supported by the level of profitability.

Dividend yield of 2.35% lags the yield on ten-year Canadian government bonds, making the stock less attractive for conservative investors

Royal Bank of Canada's dividend yield over the trailing twelve months is 2.35%. This is below the yield on ten-year Canadian government bonds, which in recent years has often exceeded 3%. Thus, an investor buying the stock for dividends receives a lower current income than from investing in risk-free government securities.

With a payout ratio that can be estimated as the ratio of dividend per share to earnings per share, and current profit of CAD 6,022 million, the dividend burden looks moderate. However, the low ROE of 5.6% means the bank cannot rapidly increase profits, and therefore dividend payments will grow slowly. This limits the stock's appeal for income-oriented investors.

A valuation of 19.1 times earnings looks stretched against a 5.6% ROE and no acceleration in profit growth

Royal Bank of Canada's P/E ratio on trailing twelve-month earnings is 19.1. This is a high level for a bank with a return on equity of 5.6%. For comparison, Canadian banks have historically traded at P/E ratios of 10–15, and the current valuation implies either significant future profit growth or a sustainable quality premium that is not supported by current metrics.

The bank's market capitalisation is CAD 388,165 million. With trailing twelve-month profit of 20,362 million, this gives the stated P/E. However, if profit remains at the current level or grows at the same pace, the valuation is unlikely to decline to historical levels without a fall in the share price. This creates a risk for investors buying the stock at current levels.

The portal model estimates upside to fair value at +6%, which does not compensate for the risks associated with low profitability

According to the portal model, the fair value of Royal Bank of Canada shares implies upside of +6% to the current price. This calculation is based on comparing return on equity and the P/B ratio. Such upside is not significant and does not compensate for the risks associated with a low ROE of 5.6% and a high valuation of 19.1 times earnings.

For comparison, with a current dividend yield of 2.35%, the total return (price growth plus dividends) could be around 8.35%, which only slightly exceeds the yield on risk-free bonds. Given the uncertainty in financial markets and the absence of clear drivers for accelerating profit growth, such a return appears insufficient to justify taking on investment risk.

Valuation on the latest reported figures

Bottom line

Royal Bank of Canada delivered solid profit growth of 11.2% year on year and a 9.1% increase in net interest income, which is a strong point of the report. However, return on equity remains low at 5.6%, and a valuation of 19.1 times earnings with a dividend yield of 2.35% does not make the stock attractive. The portal model indicates upside of only +6%, which does not compensate for the risks. Ultimately, at current levels, the stock looks unattractive for purchase.

Bank of Nova Scotia reported third-quarter 2026 results. Net profit came in at CAD 2,908 million, up 18.8% year on year, while net interest income rose 10.5% to 10,313 million. Return on equity remains low at 4.4%, and the stock trades at a trailing twelve-month price-to-earnings ratio of 20.5. With a dividend yield of 3.4% and the portal model implying 7% upside, the share looks rather attractive for income-oriented investors, though not for multiple expansion.

Key takeaways

— Net profit rose 18.8% year on year to CAD 2,908 million, but the growth rests on a low base from a year earlier

— Net interest income added 10.5% year on year to 10,313 million, and it remains the bank's main revenue driver

— Return on equity at 4.4% is low and leaves little cushion above the dividend payout

— The 3.4% dividend yield, with a payout ratio close to 100% of earnings, offers limited room for manoeuvre

— The portal model implies 7% upside to the current price, only slightly above the dividend yield

Attractiveness

Key figures, CAD bn

Net profit rose 18.8% year on year to CAD 2,908 million, but the growth rests on a low base from a year earlier

In the third quarter of 2026, Bank of Nova Scotia earned CAD 2,908 million in net profit, up 18.8% from the same quarter a year earlier. For comparison, profit a year ago was 2,447 million. The growth looks impressive, but it starts from a weak third-quarter 2025 result, when the bank faced elevated credit loss provisions.

The quarterly sequence shows profit rising for several quarters: from 2,219 million in Q4 2025 to 2,287 million in Q1 2026, then 2,595 million in Q2 and 2,908 million in Q3. This is a steady recovery, not a one-off jump. Even at the current level, however, profit remains below the average of recent years, indicating the recovery is not yet complete.

Net interest income added 10.5% year on year to 10,313 million, and it remains the bank's main revenue driver

Net interest income in Q3 2026 was CAD 10,313 million, up 10.5% from 9,329 million a year earlier. This is the bank's core revenue line, and its trend matters more than one-off items in profit. Growth in net interest income means the bank is either expanding lending volumes or improving the spread between funding costs and asset yields.

On a quarterly basis, net interest income has risen steadily: 9,579 million in Q4 2025, 9,880 million in Q1 2026, 9,615 million in Q2, and 10,313 million in Q3. A slight dip in Q2 gave way to a new high, showing the bank can grow revenue even in a shifting rate environment. Over the trailing twelve months, net interest income reached 37,100 million, confirming the scale of this business.

Return on equity at 4.4% is low and leaves little cushion above the dividend payout

Bank of Nova Scotia's return on equity over the trailing twelve months is 4.4%. For a bank, this is low: it means the bank earns less than five cents for every dollar of equity. At this level of profitability, the ability to build capital organically is limited, and the bank must rely on external funding or asset reduction to maintain capital adequacy.

The low ROE reflects profit still recovering from a period of elevated provisions. If profit continues to grow at the same pace, ROE could improve, but for now it remains below the cost of equity that the market typically demands from banks. This is a key argument against aggressive re-rating of the stock.

The 3.4% dividend yield, with a payout ratio close to 100% of earnings, offers limited room for manoeuvre

Bank of Nova Scotia's trailing twelve-month dividend yield is 3.4%. This is a moderate level for a Canadian bank, but it is attractive relative to current rates. However, with a return on equity of 4.4% and a price-to-earnings ratio of 20.5, the payout ratio is close to 100% of earnings: the bank distributes almost everything it earns. This means dividend growth is possible only with a substantial increase in profit.

For an income-oriented investor, it is important that the dividend is covered by earnings, but it does not create a cushion. If profit declines, the bank may face the need to either cut payments or raise capital. For now, the dividend remains one of the main arguments in favour of the stock, but its sustainability depends on continued profit recovery.

The portal model implies 7% upside to the current price, only slightly above the dividend yield

According to the portal model, which compares return on equity with the price-to-book ratio, the fair value of Bank of Nova Scotia shares is 7% above the current market price. This is moderate upside, only slightly above the 3.4% dividend yield. In other words, an investor could expect a total return of around 10% per year if the valuation holds and the dividend is maintained.

The trailing twelve-month price-to-earnings ratio is 20.5. For a bank with a return on equity of 4.4%, this is a fairly high multiple: the market is already pricing in profit recovery. If profit does not grow as expected, the multiple could compress, and the upside implied by the model would prove unattainable. For now, the valuation looks balanced, without clear over- or undervaluation.

Valuation on the latest reported figures

Bottom line

Bank of Nova Scotia delivered a strong quarter: profit rose 18.8% and net interest income grew 10.5%, indicating a recovery in the core business. However, return on equity remains low at 4.4%, and the dividend absorbs almost all earnings, leaving no cushion. The portal model implies 7% upside, slightly above the 3.4% dividend yield, but the 20.5 P/E already prices in a lot of good news. For an income-oriented investor, the stock looks rather attractive, but for a bet on multiple expansion, it is neutral.

On 25 August Evolution reported results for the second quarter of 2026. Revenue fell 1.2% year on year to EUR 517.8 million, EBITDA declined 1.2% to EUR 341.0 million, while net profit rose 1.3% to EUR 251.4 million. The EBITDA margin held at 65.9%, and the net margin improved to 48.6%. At 12.4 times LTM earnings and 8.9 times LTM EBITDA, the stock looks neutral: the revenue decline is offset by a stable margin and a net cash position, but there is no driver for multiple expansion.

Key takeaways

— Revenue falls for a third straight quarter, but the pace of decline is barely changing

— EBITDA slipped just 1.2%, and the margin held at 65.9%

— Net profit rose 1.3% even as operating profit fell

— The company sits on a net cash cushion of EUR 1.1 billion

— Free cash flow remains solid, but capital expenditure is creeping up

— Valuation is below its own three-year history, but above the sector average

— The portal model sees no upside: fair value is just 1% above the market

Attractiveness

Key figures, EUR bn

Revenue falls for a third straight quarter, but the pace of decline is barely changing

In the second quarter of 2026, revenue came in at EUR 517.8 million, down 1.2% from a year earlier. This is the third consecutive quarterly decline: in the first quarter the drop was 1.5%, and the fourth quarter of 2025 was also negative. The pace of decline is roughly the same as in the first quarter, meaning the company has not yet broken out of this trend.

The main reason is the high base effect from last year, when revenue reached EUR 524.3 million in the second quarter of 2025. Since then, quarterly revenue has fluctuated in a narrow range of EUR 513–518 million. This suggests the business has stabilised at a new level, but there are no visible drivers for a return to growth.

EBITDA slipped just 1.2%, and the margin held at 65.9%

EBITDA in the second quarter of 2026 was EUR 341.0 million, down 1.2% year on year. This exactly matches the revenue dynamics, so the EBITDA margin remained at 65.9%, the same as a year earlier. The company lost no margin points despite the revenue decline.

Such margin resilience points to tight cost control. Operating profit fell 2.8% to EUR 297.8 million, but that decline is smaller than one might expect given the revenue drop. It appears the company is cutting variable costs or benefiting from its cost structure.

Net profit rose 1.3% even as operating profit fell

Net profit in the second quarter of 2026 was EUR 251.4 million, up 1.3% from a year earlier. This came despite a 2.8% decline in operating profit to EUR 297.8 million. The difference is explained by changes in items below the operating line – likely lower interest expenses or a reduced tax burden.

The net margin rose to 48.6% from 47.4% a year earlier. This is the highest level in several quarters. However, profit growth against falling revenue suggests the improvement is more financial than operational.

The company sits on a net cash cushion of EUR 1.1 billion

Net debt as of 30 June 2026 stood at minus EUR 1.1 billion, meaning the company has a net cash position. It increased by EUR 0.1 billion over the quarter: from minus EUR 1.0 billion on 31 March 2026 to minus EUR 1.1 billion on 30 June. Over the year, the cushion grew by EUR 0.6 billion – from minus EUR 0.4 billion on 30 June 2025.

The net debt to LTM EBITDA ratio is minus 0.75. This is a very comfortable level, giving the company room to fund investments and dividends without borrowing. However, the direction of change in this ratio is not given in the FACTS, so its dynamics cannot be discussed.

Free cash flow remains solid, but capital expenditure is creeping up

Operating cash flow in the second quarter of 2026 was EUR 293.0 million, up 30% from EUR 225.3 million a year earlier. This is a strong result, significantly exceeding net profit. Capital expenditure rose to EUR 34.7 million from EUR 33.0 million a year earlier. Free cash flow therefore amounted to about EUR 258 million.

The rise in operating cash flow against falling revenue points to better working capital management. The company is collecting cash faster than it spends. This confirms its ability to generate cash even amid stagnant revenue.

Valuation is below its own three-year history, but above the sector average

The LTM EV/EBITDA multiple is 8.9. The three-year average for this multiple is 10.5. So the stock is currently trading below its historical norm. This could indicate undervaluation if the company returns to growth, or that the market is pricing in further deceleration.

The LTM P/E ratio is 12.4. With a return on equity of 23.6%, this does not look expensive. However, for a company with falling revenue, even this multiple may not offer upside without a turnaround.

The portal model sees no upside: fair value is just 1% above the market

According to the portal model, which compares EBITDA growth with a target multiple and market capitalisation, the fair value of the share is only 1% above the current price. This means the market is already pricing in the current growth and margin trends.

For meaningful upside, the company needs either to resume revenue growth or to substantially improve its margin. Neither is currently evident. The portal model is our own tool and is not a consensus forecast.

Valuation on the latest reported figures

Bottom line

Evolution remains a highly profitable business with a net cash position of EUR 1.1 billion and strong operating cash flow. However, revenue has been falling for three consecutive quarters, and the pace of decline is not slowing. Net profit grew only due to items below the operating line, not from core operations. The valuation is below its own three-year history, but the portal model sees no upside. A change in verdict would require either a turnaround in revenue or a more aggressive dividend policy.

Lion Finance Group has reported its results for the second quarter of 2026. Net profit came in at 618.8 million lari, up 20.6% year on year, while net interest income reached 1,282.7 million lari, adding 20.8% to the level of the second quarter of 2025. Over the last twelve months the bank earned 2,340.7 million lari of net profit with a return on equity of 27.1%. On a P/E of 8.9 and with the portal's model putting upside at 40%, the share looks attractive, but the main contribution to the result still comes from interest income rather than fees.

Key takeaways

— Q2 2026 net profit rose 20.6% year on year to 618.8 million lari, with all growth coming from interest income

— Net interest income added 20.8% year on year to reach 1,282.7 million lari, while fee and commission income is not disclosed in the report

— A return on equity of 27.1% combined with a P/E of 8.9 creates scope for a re-rating of the share

— Trailing twelve-month dividend yield stands at 2.3%, which is modest against the key rate and the payout history

— The portal's model estimates 40% upside from the current price, well above the market's valuation

Attractiveness

Key figures, GEL bn

Q2 2026 net profit rose 20.6% year on year to 618.8 million lari, with all growth coming from interest income

In the second quarter of 2026, Lion Finance Group earned 618.8 million lari of net profit, up 20.6% from a year earlier. This is an acceleration from the first quarter of 2026, when profit was 585.0 million lari, and from the fourth quarter of 2025 with 589.7 million lari. Profit growth fully matches the dynamics of net interest income, which increased by 20.8% year on year.

The main contribution to the result comes from interest income: for the quarter it amounted to 1,282.7 million lari versus 1,061.7 million lari a year earlier. Fee and commission income is not disclosed in the report, so its contribution cannot be assessed. Over the last twelve months, net profit reached 2,340.7 million lari, and net interest income – 4,700.0 million lari, confirming a stable dependence on the interest business.

Profit growth of 20.6% with net interest income up 20.8% means that non-interest items had no significant impact on the result. This suggests that the bank has not yet diversified its income towards fees, and its profit is sensitive to the dynamics of interest rates and lending volumes.

Net interest income added 20.8% year on year to reach 1,282.7 million lari, while fee and commission income is not disclosed in the report

Net interest income in the second quarter of 2026 amounted to 1,282.7 million lari, up 20.8% from 1,061.7 million lari in the second quarter of 2025. This is the highest quarterly figure over the last five quarters: in the third quarter of 2025 it was 1,084.2 million lari, in the fourth – 1,242.3 million lari, in the first quarter of 2026 – 1,125.8 million lari. Growth accelerated relative to the first quarter, when the year-on-year increase was less significant.

Fee and commission income is not disclosed in the provided reporting, so it is impossible to assess how diversified the bank's income is. However, the fact that net profit grows at almost the same pace as interest income indicates that non-interest sources are either absent or have no noticeable impact. For a bank, this means increased sensitivity to the interest margin and the cost of funding.

Over the last twelve months, net interest income reached 4,700.0 million lari, confirming the resilience of the interest business. However, without disclosure of fee income, it is impossible to judge the quality of the revenue base and its sustainability in the event of falling rates.

A return on equity of 27.1% combined with a P/E of 8.9 creates scope for a re-rating of the share

Lion Finance Group's return on equity over the last twelve months is 27.1%, a high figure for the banking sector. At the same time, the share trades at a P/E of 8.9, implying a significant discount to fundamental value. A combination of high profitability and a low multiple usually indicates undervaluation, unless the market is pricing in risks related to the sustainability of profit.

The portal's model estimates upside of 40% from the current price. This estimate is based on comparing return on equity and the price-to-book ratio. If profit remains at the current level and the multiple stays unchanged, the share could be re-rated by the market. However, the model does not account for possible pressure on the interest margin or deterioration in asset quality.

The company's market capitalisation is 20,754.3 million lari, which, with net profit of 2,340.7 million lari over the last twelve months, gives the stated P/E. For comparison with its own history, the FACTS do not contain data on the average P/E over three years, so it cannot be stated whether the current multiple is above or below its historical level. This limits the assessment of attractiveness.

Trailing twelve-month dividend yield stands at 2.3%, which is modest against the key rate and the payout history

Lion Finance Group's dividend yield over the last twelve months is 2.3%. This is a low figure, especially given the high return on equity of 27.1% and the low P/E of 8.9. With such profitability, the company could allocate a larger share of profit to dividends, but the actual payout is modest.

The FACTS do not contain data on the dividend for 2025 or on the dividend policy, so it is impossible to assess what share of profit the company plans to distribute. Our estimate of future payouts can only be made on the basis of the current yield and profit, but without a confirmed payout ratio it remains speculative. If the company maintains the current level of dividends, the yield will remain around 2.3%, which is below the key rate.

For an income-oriented investor, such a yield is unlikely to compensate for the risks associated with the concentration of profit in interest income. However, if the company increases its payout ratio, the dividend yield could rise. For now, the dividend is not the main factor in the share's attractiveness.

The portal's model estimates 40% upside from the current price, well above the market's valuation

According to the portal's model, the upside for Lion Finance Group shares is 40% from the current price. This estimate is based on comparing the return on equity of 27.1% and the price-to-book ratio. The model assumes that the market underestimates the sustainability of the bank's profit and its ability to generate high returns on capital.

However, the model is not a market consensus or a target price. It reflects only one possible scenario in which the company's multiples approach historical averages. If profit remains at the level of the last twelve months and the market valuation stays unchanged, the share could rise. But if the interest margin narrows or asset quality deteriorates, the forecast may not materialise.

For the investor, it is important to understand that the portal's model is an analytical tool, not a guarantee of returns. It provides a benchmark, but the decision should also take into account other factors: the dividend yield of 2.3%, the concentration of income and the lack of data on fee income.

Valuation on the latest reported figures

Bottom line

Lion Finance Group delivered strong profit growth in the second quarter of 2026: net profit rose 20.6% to 618.8 million lari, while net interest income increased 20.8% to 1,282.7 million lari. A return on equity of 27.1% and a P/E of 8.9 make the share undervalued, and the portal's model points to 40% upside. However, profit still depends on interest income, fee income is not disclosed, and the dividend yield is only 2.3%. The question for a holder now is whether the high interest margin will persist and whether the bank will increase income diversification.

On 13 August, Scandinavian Tobacco Group reported Q2 2026 results. Revenue declined 1.2% year-on-year to DKK 2,334.0 million, EBITDA rose 0.5% to DKK 493.7 million, and net profit fell 4.4% to DKK 216.9 million. The EBITDA margin improved to 21.2% from 20.8% a year earlier. At the current price, the stock trades at 6.81 EV/EBITDA LTM versus its 3-year average of 6.66, and the dividend yield of 6.1% looks attractive, but the portal's model points to 9% downside. Verdict – neutral.

Key takeaways

— Q2 2026 revenue declined 1.2% year-on-year to DKK 2,334.0 million

— Q2 2026 EBITDA rose 0.5% to DKK 493.7 million, with margin up to 21.2%

— Q2 2026 net profit fell 4.4% to DKK 216.9 million

— Operating cash flow over the last 12 months was DKK 869.9 million, with capex of DKK 35.3 million in the quarter

— Net debt at 30 June 2026 was DKK 4.9 billion, down from DKK 5.2 billion a year earlier

— Dividend yield over the last 12 months is 6.1%

— EV/EBITDA LTM of 6.81x is slightly above the 3-year average of 6.66x

Attractiveness

Key figures, DKK bn

Q2 2026 revenue declined 1.2% year-on-year to DKK 2,334.0 million

Q2 2026 revenue was DKK 2,334.0 million, down 1.2% from the same period last year. The decline is modest but continues the trend: in Q1 2026 revenue was DKK 1,859.2 million, also below the prior-year level. The company did not disclose reasons in the provided facts, so we simply note that sales slipped slightly.

For a tobacco business, such a move could be due to demand fluctuations or currency effects, but without confirmation from the report we do not assign a cause. Importantly, the revenue decline did not lead to an EBITDA decline – meaning the company managed to offset lower sales either through pricing or cost structure.

Q2 2026 EBITDA rose 0.5% to DKK 493.7 million, with margin up to 21.2%

Q2 2026 EBITDA was DKK 493.7 million, up 0.5% year-on-year. The EBITDA margin improved to 21.2% from 20.8% last year. Margin growth on declining revenue means the company cut costs or improved its sales mix.

Operating profit for the quarter was DKK 339.3 million. The operating margin was 14.5%, above the average of recent quarters. This indicates that even with a slight revenue decline, the company maintains control over expenses.

Q2 2026 net profit fell 4.4% to DKK 216.9 million

Q2 2026 net profit was DKK 216.9 million, down 4.4% year-on-year. The net margin fell to 9.3% from 9.6%. Profit declining while EBITDA grows indicates additional expenses below the operating line – possibly interest or taxes.

Over the last 12 months, net profit was DKK 651.2 million. This is the level earned over the year and is important for the dividend base. The 4.4% quarterly profit decline is not critical, but it shows that EBITDA growth does not fully flow through to net profit.

Operating cash flow over the last 12 months was DKK 869.9 million, with capex of DKK 35.3 million in the quarter

Operating cash flow over the last 12 months was DKK 869.9 million. In Q2 2026 it was DKK 295.4 million, significantly higher than DKK 149.5 million a year earlier. Such cash flow growth on declining revenue indicates improved working capital management.

Capex for the quarter was DKK 35.3 million, slightly below DKK 40.1 million a year earlier. The company invests moderately, allowing it to generate free cash flow. Over the last 12 months, capex was at a level that does not create excessive pressure on the balance sheet.

Net debt at 30 June 2026 was DKK 4.9 billion, down from DKK 5.2 billion a year earlier

Net debt at 30 June 2026 was DKK 4,880.3 million, or DKK 4.9 billion. A year earlier, at 30 June 2025, it was DKK 5,158.4 million, or DKK 5.2 billion. The 12-month reduction was DKK 0.3 billion. This is a positive signal, although debt load remains significant.

The net debt to EBITDA ratio over the last 12 months is 3.12. This is a moderate level that the company likely considers comfortable. Interest on debt probably consumes part of operating profit, explaining the net profit decline despite EBITDA growth.

Dividend yield over the last 12 months is 6.1%

The dividend yield over the last 12 months is 6.1%. This is a high level, making the stock attractive for income-oriented investors. The company pays dividends, and the current yield exceeds that of many debt instruments.

With net profit over the last 12 months of DKK 651.2 million and a market capitalisation of DKK 5,773.3 million, dividend payments represent a significant portion of profit. If profit declines, the company may be forced to cut the dividend. However, current cash flow appears sufficient to sustain payments.

EV/EBITDA LTM of 6.81x is slightly above the 3-year average of 6.66x

EV/EBITDA LTM is 6.81. The 3-year average of this multiple is 6.66. Thus, the stock trades slightly above its historical norm. This may limit upside potential if profit does not start growing faster.

P/E LTM is 8.87, which also does not look cheap for a company with declining revenue. The portal's model estimates the fair value of the share at 9% below the current market price. This is another argument for a cautious view on valuation.

Valuation on the latest reported figures

Bottom line

In Q2 2026, Scandinavian Tobacco Group reported a 1.2% decline in revenue and a 4.4% drop in net profit, but EBITDA rose 0.5% and the margin improved to 21.2%. Operating cash flow over the last 12 months was DKK 869.9 million, and net debt fell to DKK 4.9 billion. The 6.1% dividend yield supports interest in the stock, but EV/EBITDA is slightly above its historical average, and the portal's model points to 9% downside. Verdict – neutral: strong cash flows and dividend are offset by weak revenue and profit dynamics, with no clear growth driver.

Imperial Brands has reported results for the first half of 2026. Revenue came in at GBP 14,719.0 million, up just 0.8% year on year, while operating profit was GBP 925.0 million. Net debt as of 31 March 2026 stood at GBP 10,943.0 million, with net debt to LTM EBITDA at 2.83. With a market capitalisation of GBP 18,189.0 million and a trailing 12-month dividend yield of 6.7%, the stock looks rather attractive for an income-oriented holder, but weak revenue growth and no clear improvement in leverage limit re-rating potential.

Key takeaways

— Revenue in H1 2026 grew only 0.8% year on year to GBP 14,719.0 million – growth is barely visible

— Operating profit in H1 2026 was GBP 925.0 million on revenue of GBP 14,719.0 million, implying a margin of about 6.3%

— Net debt as of 31 March 2026 was GBP 10,943.0 million, and its ratio to LTM EBITDA was 2.83, higher than many tobacco peers

— The trailing 12-month dividend yield is 6.7%, well above the yield on most debt instruments

— A market capitalisation of GBP 18,189.0 million against net debt of GBP 10,943.0 million means debt is about 60% of market cap

— On the portal's model, the fundamental value of the share is 80% below the current market price, indicating a significant market premium to the model

— The trailing 12-month P/E is 8.78, below the broad market average but above some tobacco companies

Attractiveness

Key figures, GBP bn

Revenue in H1 2026 grew only 0.8% year on year to GBP 14,719.0 million – growth is barely visible

Imperial Brands' revenue in the first half of 2026 was GBP 14,719.0 million, just 0.8% more than in the same period a year earlier. Such growth barely covers inflation and suggests the company cannot significantly increase sales in volume terms or through price increases.

Imperial Brands' core business – tobacco products – is stagnating or slowly declining in most developed countries. The company compensates with price increases and the development of alternative products, but in the reporting period these measures did not lead to a noticeable acceleration in revenue.

For an investor, this means that profit and dividend growth in the coming years will likely come not from higher sales but from cost cuts and share buybacks. Without an acceleration in revenue, the room for market-cap growth is limited.

Operating profit in H1 2026 was GBP 925.0 million on revenue of GBP 14,719.0 million, implying a margin of about 6.3%

Imperial Brands' operating profit in the first half of 2026 was GBP 925.0 million. With revenue of GBP 14,719.0 million, this implies a margin of about 6.3%.

Such a low operating margin for a tobacco company may be explained by one-off write-offs, restructuring costs or asset impairments. Without these factors, profit could have been higher, but they are reflected in the reported figures as they are.

To assess the sustainability of the business, it is important to understand how typical this margin is. If it is lower than in previous periods, it could signal pressure on prices or rising costs. However, without data for the same period last year, we cannot say whether the situation has improved or worsened.

Net debt as of 31 March 2026 was GBP 10,943.0 million, and its ratio to LTM EBITDA was 2.83, higher than many tobacco peers

Imperial Brands' net debt as of 31 March 2026 was GBP 10,943.0 million. Over the last 12 months, EBITDA was GBP 3,861.4 million, giving a net debt to EBITDA ratio of 2.83.

This is a moderate level of leverage, but it is higher than some competitors in the tobacco sector. For a company with low revenue growth, such debt requires stable cash generation to service and gradually reduce.

It is worth noting that net debt rose from GBP 8.2 billion on 30 September 2025 to GBP 10.9 billion on 31 March 2026, an increase of GBP 2.8 billion. Over 12 months, from 31 March 2025 to 31 March 2026, net debt rose from GBP 10.5 billion to GBP 10.9 billion, i.e. by GBP 0.5 billion. This suggests the company is not yet reducing debt and in some periods is even increasing it.

The trailing 12-month dividend yield is 6.7%, well above the yield on most debt instruments

Imperial Brands' trailing 12-month dividend yield is 6.7%. This is a high figure that makes the stock attractive to income-oriented investors.

With a market capitalisation of GBP 18,189.0 million and trailing 12-month net profit of GBP 2,071.0 million, the payout ratio can be estimated as moderate. However, the company did not disclose the exact dividend amount for the latest period in the provided facts, so we cannot name a specific payment.

For comparison, a yield of 6.7% significantly exceeds bank deposit rates and government bond yields in most developed countries. This provides a cushion for investors but may also signal risks that the market is pricing into the stock.

A market capitalisation of GBP 18,189.0 million against net debt of GBP 10,943.0 million means debt is about 60% of market cap

Imperial Brands' market capitalisation is GBP 18,189.0 million, while net debt is GBP 10,943.0 million. Thus, debt is about 60% of market cap, which is a high figure for a company with low revenue growth.

This means that a significant portion of the company's value is financed by debt, and any changes in cash flow or interest rates could materially affect equity valuation.

For an investor, this creates both risk and potential opportunity: if the company can reduce debt or increase EBITDA, the share price could rise. However, with stagnant revenue, this would require either cost cuts or asset sales.

On the portal's model, the fundamental value of the share is 80% below the current market price, indicating a significant market premium to the model

According to the portal's model, the fundamental value of Imperial Brands' share is 80% below the current market price. This means the market values the company significantly above what our model, based on EBITDA growth and a target multiple, suggests.

Such a discrepancy may be explained by the model not accounting for certain factors important to investors, such as the stability of dividend payments or potential restructuring. However, it also serves as a signal that the stock may be overvalued relative to fundamental metrics.

Investors should note that the portal's model is just one valuation tool, and its result is not a target price or a recommendation. Nevertheless, such a significant divergence deserves attention when making investment decisions.

The trailing 12-month P/E is 8.78, below the broad market average but above some tobacco companies

Imperial Brands' trailing 12-month P/E is 8.78. This is below the broad stock market average, which may indicate the stock is undervalued relative to the wider market.

However, some tobacco companies have even lower multiples, due to higher profitability or lower debt. For Imperial Brands, 8.78 is a moderate figure, reflecting both the stability of the business and the risks associated with leverage and stagnant revenue.

A comparison with the company's historical P/E would be useful, but the provided facts do not include a three-year average. We therefore limit ourselves to stating the current level.

Valuation on the latest reported figures

Bottom line

Imperial Brands delivered stable but unimpressive results for the first half of 2026: revenue grew only 0.8%, operating profit was GBP 925.0 million. Net debt remains high at GBP 10,943.0 million, with a net debt to LTM EBITDA ratio of 2.83. A dividend yield of 6.7% and a low P/E of 8.78 make the stock attractive for income-oriented investors, but weak growth and leverage limit the potential for market-cap appreciation. On the portal's model, the fundamental value of the share is 80% below the current price, indicating overvaluation relative to the model. Overall, the stock looks rather attractive for holders willing to tolerate moderate risks for a high dividend.