Presentation on Private Equity Valuation of Bkash. This presentation was performed for a National Financial Modeling Competition called " Blueprints," organized by NSU Finance Club

1. TheCase

5. The Mastermind

8. The Demand

9. The Timeline

10. Financial

11. BD - Macro
0.0
10.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
GDP Growth Bangladesh (%)
6.05
6.13
6.36
3.633.01
5.31
10.30
2.38
5.31
8.40
6.11
2.21
2.01
3.33
5.67
7.59
7.056.77
9.11
8.90
5.42
8.13
11.33
6.22
7.53
6.99
6.19
5.43
5.78
0.00
5.00
10.00
15.00
INFLATION

13. Banking

14. Mobile Money

15. 506,032
4,327,308
83,358
178,322
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2013 2014 2015 2016 2017
Industry Transaction
Average Daily Transactions Count Agents

16. 3868 4061 3963 4777
4% 4%
3%
4%
8%
9%
6%
5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
1000
2000
3000
4000
5000
6000
April May June July
Transaction Amount (BDT in Crore)
Growth in No. of Agents
Growth in No. of Agent Banking Subscribers

17. BKASH

18. Cash in Cash out
Send Money
Bank Transfer
Payment
Payment
Mobile Recharge
Interest on Savings

20. BusinessProfile

21. BusinessProfile

22. Revenue

25. Economic

26. 186

29. Growth drivers

33. management

34. Source: Company Financials & Team Estimates
42.4%
25.4%
8.7%
7.5%
16%

36. Competitor

37. BDT 2,50,000
BDT 15,000
BDT 18
BDT 18.5
BDT 25,000
BDT 15,000
Maximum Amount
Per Transaction
Daily Amount of
Transaction
Cash out charge
Per BDT 100

38. 2,757,340
3,247,362
1,879,500
861,720

39. FUTURE POTENTIALS
Source: Team Analysis
Payment SystemSimilar Models

40. 0%
50%
100%
150%
200%
250%
bKash M-Pesa
10%
44%
0.14%
229.63%
Transaction Value per GDP Gross Profit Per User

41. •
•
•

43. 1,577,733
8,848,788
1,299,000
6,371,128
82.3%
77.0%

44. 0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2015 2016 2017 2018 2019 2020 2021
Gross Profit Spread

45. 10,961
23,004
-
5,000
10,000
15,000
20,000
25,000
2015 2016 2017 2018 2019 2020 2021 2022

46. -
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2015 2016 2017 2018 2019 2020 2021

47. -
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2014A 2015A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Revenue Cost of Services Gross Profit/Loss Profit Before Tax Profit After Tax
10 year projections

48. FCFE 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
1 2 3 4 5 6 7 8 9
Net Income 750 1,206 1,462 3,144 4,922 7,132 9,448 13,196 17,934 21,686
+Depreciaiton & amortization 126 168 227 310 206 261 323 409 486 577
Net working capital -364 -206 -276 -323 -370 -429 -496 -571 -667 -783
-Capex -175 -178 -180 -182 -185 -187 -190 -192 -195 -197
FCFE 336 991 1,233 2,948 4,573 6,777 9,085 12,842 17,558 21,282
Terminal value 167,336
DCF 336 853 914 1,884 2,517 3,213 3,710 4,517 5,319 49,215

49. 3.3% 3.4%
11.6%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net profit margin
16.7%
20.8%
39.3%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Gross profit margin
7.9% 7.7%
18.8%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
EBITDA margin

50. 2.0% 1.8%
4.9%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
ROA
9.3%
15.8%
32.9%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
ROE

51. Risk Factors
Technological Market Interest Regulatory
Tech
companies
need to be
updated.
More
competition
might
fragment the
market
Floating
earnings will
be volatile
due to this
risk
Sudden
regulatory
changes
might affect
profitability

52. THANK Y U
Question

53. Transaction Limits
Transaction Type
Maximum Number of Transactions Amount Per Transaction Maximum Amount
Per Day Per Month Minimum (Tk) Maximum (Tk) Per Day (Tk) Per Month (Tk)
Cash in from Agent
2 20 50 15,000 15,000 100,000
Deposit from i-banking
Send Money 20 70 10 10,000 10,000 25,000
Mobile Recharge 50 1,500 10 1,000* 10,000 100,000
Payment No Limit No Limit 1 No Limit No Limit No Limit
Cash Out from Agent
2 10
50
10,000 10,000 50,000
Cash Out from ATM 2,000
International Remittance 5 20 50 25,000 25,000 150,000
Bank Transfer (iBanking)
Existing Cash In limits applicable. Cash In limits include any transfer received from iBanking and Cash in from Agent
i.e. Cash In from Agent and Receive from iBanking will share the same limit.
A bKash Account holder can withdraw a maximum amount of Tk 10,000 per day and Tk 50,000 per month from his/her Account (Agent & ATM combined)
A bKash Account holder can keep a maximum amount of Tk 300,000 in his/her bKash Account at any moment
A maximum of *Tk. 1,000 airtime balance can be recharged to a prepaid number and a maximum of *Tk. 5,000 to a postpaid number from a bKash account in a single transaction
Transaction limits

54. CoE 16%
Rf 9.50%
Beta 1.1
Rm 6%
COE Calculation

55. Income Statement
Income Statement 2014A 2015A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Volume of Transactions (BDT mn) 860,800 1,299,000 1,805,000 2,175,300 2,863,421 3,775,625 4,942,878 6,371,128 8,211,676 10,335,385 13,007,719 16,370,259 19,777,042 23,891,729
Cash Out Fees 5,373 7,860 11,158 13,082 12,577 16,820 22,743 30,996 41,185 52,194 64,600 81,853 97,185 115,309
p2p fees 270 413 508 636 1,017 1,187 1,374 1,592 - - - - - -
Airtime Purchase 75 286 357 432 475 522 564 609 646 684 719 754 785 816
Others 14 27 65 109 2,433 3,223 3,552 4,832 6,529 8,700 11,464 15,081 19,376 24,431
Revenue 5,732 8,587 12,088 14,258 16,501 21,751 28,233 38,028 48,360 61,578 76,783 97,688 117,345 140,556
Revenue as %of transaction 66.6% 66.1% 67.0% 65.5% 57.6% 57.6% 57.1% 59.7% 58.9% 59.6% 59.0% 59.7% 59.3% 58.8%
Cost of Services 4,773 7,011 9,766 11,299 11,879 14,817 18,495 23,671 30,247 37,388 45,462 56,554 66,598 79,330
CoS as %of transaction 55.5% 54.0% 54.1% 51.9% 41.5% 39.2% 37.4% 37.2% 36.8% 36.2% 34.9% 34.5% 33.7% 33.2%
Gross Profit/Loss 958 1,576 2,322 2,959 4,622 6,934 9,738 14,357 18,112 24,189 31,321 41,134 50,747 61,227
GP as %of transaction 11.1% 12.1% 12.9% 13.6% 16.1% 18.4% 19.7% 22.5% 22.1% 23.4% 24.1% 25.1% 25.7% 25.6%
Other Income 663 897 1,124 1,391 1,532 1,550 1,568 1,588 1,610 1,634 1,660 1,688 1,718 1,751
Donor Grants - 119 55 51
Operating & Admin Expenses 783 1,220 1,957 2,462 2,893 3,869 5,458 7,749 9,473 11,483 14,212 17,189 20,409 24,215
Marketing & Promotional Expenses 496 852 876 1,041 2,004 2,643 3,460 3,186 2,464 3,101 3,902 4,911 3,955 4,778
Utilization of grant funds - 119 55 51 48 60 82 116 155 206 269 357 446 555
Profit Before Contributing to WPPF 342 401 612 847 1,210 1,912 2,306 4,895 7,632 11,034 14,598 20,365 27,655 33,429
Contribution to WPPF 16 19 43 56 56 57 58 59 60 61 62 64 65 66
Profit Before Tax 326 382 570 791 1,153 1,856 2,249 4,836 7,572 10,972 14,535 20,301 27,590 33,363
Current Income Tax Expenses 19 43 267 266 404 649 787 1,693 2,650 3,840 5,087 7,106 9,657 11,677
Deferred Income Tax Expenses/(Income) 118 99 (33) 37
Total Tax 137 142 235 303 404 649 787 1,693 2,650 3,840 5,087 7,106 9,657 11,677
Profit After Tax 189 239 335 488 750 1,206 1,462 3,144 4,922 7,132 9,448 13,196 17,934 21,686

56. Balance SheetBalance Sheet (BDT mn) 2014A 2015A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Net PPE 203 405 708 768 817 827 992 1240 1612 2257 3386 5417 9209 16576
Net Intangible Assets 148 335 269 464
Deferred Tax Assets 40 1 -
Non-current Assets 390 740 979 1,231 817 827 992 1,240 1,612 2,257 3,386 5,417 9,209 16,576
Total Receivables 99 158 220 427 410 549 742 1,012 1,344 1,703 2,108 2,671 3,172 3,763
Advances, Deposits & Prepayments 53 206 218 232 236 240 244 248 252 256 260 264 269 273
Advance Income Tax 113 225 367 538 645 774 891 1,024 1,178 1,319 1,478 1,655 1,820 2,002
Airtime Balance 45 156 798 1,163 1,396 1,675 1,926 2,215 2,547 2,929 3,281 3,675 4,116 4,610
Airtime Proceeds & Transit 117 67
Restricted Cash & Equivalents 7,223 11,172 17,507 21,985 28,940 38,159 53,417 73,311 100,238 133,396 176,993 234,206 296,790 375,262
Fixed Deposits 400 1,470 1,620 2,122 2,122 2,440 2,806 3,227 3,711 4,268 4,908 5,644 6,491 7,464
Cash & Equivalents 1,103 306 300 186
Current Assets 9,154 13,760 21,029 26,654 33,750 43,838 60,026 81,037 109,270 143,872 189,028 248,115 312,657 393,375
TOTAL ASSETS 9,544 14,500 22,008 27,885 34,567 44,665 61,018 82,277 110,883 146,129 192,414 253,532 321,865 409,950
Share Capital 38 38 38 38 38 38 38 38 38 38 38 38 38 38
Convertible preference shares 4 4 4 4 4 4 4 4 4 4 4 4
Share Premium 1,286 1,286 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133
Share Money Deposit 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Retained Earnings (157) 80 416 903 1,653 2,859 4,321 7,464 12,386 19,518 28,966 42,162 60,095 81,781
TOTAL EQUITY 2,019 2,257 2,591 3,079 3,829 5,035 6,497 9,640 14,562 21,694 31,142 44,338 62,271 83,957
Deferred Tax Liability - 59 - 36
Employee Benefits - - 118 45
Other non-current Liabilities 7 7 7 7
Finance Lease Liabilities - - 19 41
Non-current Liabs 7 66 144 128 257 514 1,027 2,055 4,110 6,164 9,246 10,171 11,188 12,307
Customer Deposits 4,547 7,347 11,488 14,886 19,595 25,837 36,168 49,638 67,870 90,321 119,840 158,578 200,952 254,085
Other Deposits 2,275 3,615 5,801 6,778 8,922 11,764 16,468 22,602 30,903 41,126 54,566 72,205 91,499 115,692
Trade & Other Payables 305 606 673 1,023 990 1235 1541 1973 2521 3116 3788 4713 5550 6611
Current Finance Lease Liabilities - - 6 17 17 17 17 17 17 17 17 17 17 17
Grant Funds 126 27 49 44 44 44 44 44 44 44 44 44 44 44
Accrued Expenses 223 498 903 1,312 1,443 1,588 1,699 1,818 1,909 2,004 2,084 2,168 2,233 2,300
Provision for Tax 41 84 352 617 1,111 1,222 1,345 1,439 1,539 1,616 1,697 1,748 1,783 1,819
Total Current Liabs 7,518 12,177 19,272 24,678 32,123 41,708 57,282 77,530 104,803 138,244 182,038 239,473 302,079 380,568
TOTAL LIABILITIESS 7,525 12,243 19,416 24,806 32,380 42,222 58,309 79,585 108,913 144,409 191,284 249,644 313,267 392,875

57. FCFF
FCFE 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
1 2 3 4 5 6 7 8 9
Net Income 750 1,206 1,462 3,144 4,922 7,132 9,448 13,196 17,934 21,686
+Depreciaiton & amortization 126 168 227 310 206 261 323 409 486 577
Net working capital -364 -206 -276 -323 -370 -429 -496 -571 -667 -783
-Capex -175 -178 -180 -182 -185 -187 -190 -192 -195 -197
FCFE 336 991 1,233 2,948 4,573 6,777 9,085 12,842 17,558 21,282
Terminal value 167,336
DCF 336 853 914 1,884 2,517 3,213 3,710 4,517 5,319 49,215

58. CoE 17%
Rf 9.50%
Beta 1.2
Rm 6%
COE Calculation (Bullish Case)

59. Income Statement (Bullish Case)
Income Statement 2014A 2015A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Volume of Transactions (BDT mn) 860,800 1,299,000 1,805,000 2,175,300 2,863,421 3,722,447 4,739,473 6,032,358 7,368,451 8,997,686 10,526,216 12,310,857 14,394,050 16,386,289
Cash Out Fees 5,373 7,860 11,158 13,082 12,577 16,349 21,746 29,592 37,670 46,808 54,410 64,716 75,100 84,780
p2p fees 270 413 508 636 1,004 1,140 1,318 1,523 - - - - - -
Airtime Purchase 75 286 357 432 475 522 564 609 646 684 719 754 785 816
Others 14 27 65 109 2,433 3,204 33,653 43,269 53,485 65,988 78,118 92,312 109,042 125,500
Revenue 5,732 8,587 12,088 14,258 16,488 21,215 57,281 74,993 91,800 113,480 133,247 157,783 184,927 211,096
Revenue as %of transaction 66.6% 66.1% 67.0% 65.5% 57.6% 57.0% 120.9% 124.3% 124.6% 126.1% 126.6% 128.2% 128.5% 128.8%
Cost of Services 4,773 7,011 9,766 11,299 11,754 14,240 18,021 22,930 28,355 34,488 39,749 46,712 53,813 61,195
CoS as %of transaction 55.5% 54.0% 54.1% 51.9% 41.0% 38.3% 38.0% 38.0% 38.5% 38.3% 37.8% 37.9% 37.4% 37.3%
Gross Profit/Loss 958 1,576 2,322 2,959 4,735 6,975 39,261 52,063 63,445 78,992 93,498 111,070 131,114 149,901
GP as %of transaction 11.1% 12.1% 12.9% 13.6% 16.5% 18.7% 82.8% 86.3% 86.1% 87.8% 88.8% 90.2% 91.1% 91.5%
Other Income 663 897 1,124 1,391 1,532 1,548 1,566 1,583 1,600 1,619 1,637 1,657 1,677 1,698
Other Income as %of transaction 6.9% 6.2% 6.4% 5.4% 4.2% 3.3% 2.6% 2.2% 1.8% 1.6% 1.3% 1.2% 1.0%
Donor Grants - 119 55 51
Operating & Admin Expenses 783 1,220 1,957 2,462 3,773 5,232 6,959 9,765 12,431 14,978 17,411 20,062 23,281 26,282
Marketing & Promotional Expenses 496 852 876 1,041 2,004 2,978 4,266 4,826 4,421 4,499 5,263 4,924 5,758 4,916
Utilization of grant funds - 119 55 51 51 62 176 241 309 399 489 602 733 869
Profit Before Contributing to WPPF 342 401 612 847 439 252 29,426 38,813 47,885 60,734 71,972 87,138 103,018 119,533
Contribution to WPPF 16 19 43 56 56 57 58 59 60 61 62 64 65 66
Profit Before Tax 326 382 570 791 383 195 29,368 38,754 47,825 60,673 71,910 87,075 102,953 119,466
Current Income Tax Expenses 19 43 267 266 134 68 10,279 13,564 16,739 21,236 25,168 30,476 36,034 41,813
Deferred Income Tax Expenses/(Income) 118 99 (33) 37
Total Tax 137 142 235 303 134 68 10,279 13,564 16,739 21,236 25,168 30,476 36,034 41,813
Profit After Tax 189 239 335 488 249 127 19,089 25,190 31,086 39,437 46,741 56,598 66,920 77,653

60. Balance Sheet (Bullish Case)
Balance Sheet (BDT mn) 2014A 2015A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Net PPE 203 405 708 768 817 831 998 1247 1621 2270 3405 5448 9261 16670
Net Intangible Assets 148 335 269 464
Deferred Tax Assets 40 1 -
Non-current Assets 390 740 979 1,231 817 831 998 1,247 1,621 2,270 3,405 5,448 9,261 16,670
Total Receivables 99 158 220 427 410 534 710 966 1229 1528 1776 2112 2451 2767
Advances, Deposits & Prepayments 53 206 218 232 236 240 244 248 252 256 260 264 269 273
Advance Income Tax 113 225 367 538 645 774 891 1024 1178 1319 1478 1655 1820 2002
Airtime Balance 45 156 798 1,163 1338 1538 1769 2123 2547 3057 3821 4776 6209 7016
Airtime Proceeds & Transit 117 67
Restricted Cash & Equivalents 7,223 11,172 17,507 21,985 28,940 37,622 45,057 53,729 61,208 69,343 74,807 80,104 85,022 86,958
Fixed Deposits 400 1,470 1,620 2,122 2122 2440 2806 3227 3711 4268 4908 5644 6491 7464
Cash & Equivalents 1,103 306 300 186
Current Assets 9,154 13,760 21,029 26,654 33,691 43,148 51,476 61,317 70,126 79,771 87,050 94,556 102,262 106,481
TOTAL ASSETS 9,544 14,500 22,008 27,885 34,509 43,980 52,474 62,564 71,747 82,040 90,455 100,003 111,523 123,151
Share Capital 38 38 38 38 38 38 38 38 38 38 38 38 38 38
Convertible preference shares 4 4 4 4 4 4 4 4 4 4 4 4
Share Premium 1,286 1,286 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133 2,133
Share Money Deposit 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Retained Earnings (157) 80 416 903 1,152 1,279 20,368 45,558 76,644 116,082 162,823 219,422 286,341 363,995
TOTAL EQUITY 2,019 2,257 2,591 3,079 3,328 3,455 22,544 47,734 78,820 118,258 164,999 221,597 288,517 366,170
Deferred Tax Liability - 59 - 36
Employee Benefits - - 118 45
Other non-current Liabilities 7 7 7 7
Finance Lease Liabilities - - 19 41
Non-current Liabs 7 66 144 128 257 514 1,027 2,055 4,110 6,164 9,246 10,171 11,188 12,307
Customer Deposits 4,547 7,347 11,488 14,886 19,595 25,473 30,508 36,379 41,443 46,951 50,651 54,237 57,568 58,878
Other Deposits 2,275 3,615 5,801 6,778 8,922 11,599 13,891 16,564 18,870 21,378 23,063 24,696 26,212 26,809
Trade & Other Payables 305 606 673 1,023 979 1187 1502 1911 2363 2874 3312 3893 4484 5100
Current Finance Lease Liabilities - - 6 17 17 17 17 17 17 17 17 17 17 17
Grant Funds 126 27 49 44 44 44 44 44 44 44 44 44 44 44
Accrued Expenses 223 498 903 1,312 1443 1588 1699 1818 1909 2004 2084 2168 2233 2300
Provision for Tax 41 84 352 617 1111 1222 1345 1439 1539 1616 1697 1748 1783 1819
Total Current Liabs 7,518 12,177 19,272 24,678 32,112 41,130 49,005 58,172 66,186 74,886 80,869 86,803 92,341 94,967
TOTAL LIABILITIESS 7,525 12,243 19,416 24,806 32,369 41,644 50,033 60,227 70,295 81,050 90,116 96,974 103,529 107,274

61. FCFF(Bullish Case)
FCFE 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
1 2 3 4 5 6 7 8 9
Net Income 249 127 19,089 25,190 31,086 39,437 46,741 56,598 66,920 77,653
+Depreciaiton & amortization 126 163 217 296 188 234 272 324 376 424
Net working capital -364 -206 -276 -323 -370 -429 -496 -571 -667 -783
-Capex -175 -178 -180 -182 -185 -187 -190 -192 -195 -197
FCFE (165) (94) 18,851 24,980 30,719 39,055 46,328 56,159 66,434 77,097
Terminal value 579,634
DCF (165) (80) 13,842 15,718 16,563 18,044 18,341 19,051 19,312 163,587
Enterprise value 284,211
+ Cash & equivalent balance 31,062
-Interest bearing debt (28,517)
Equity Value (BDT mn) 286,756
Equity Value (USD mn) 3,455