Kazatomprom JSC released its financial report for the first nine months of 2025. Revenue showed modest growth despite the continued absence of enriched uranium sales. The appreciation of the US dollar supported the company’s tengedenominated revenue. We also note a significant improvement in margins and net profit following the resolution of sulfuric acid supply issues. In our valuation model, we lowered the exchange rate, WACC, and revenue forecasts, but increased the operating margin. As a result, our fair value estimate for Kazatomprom shares stands at KZT 27,900, implying a 2% premium to the current KASE market price. We assign a “Hold” recommendation.
(=) Revenue slightly increased. The company’s revenue for the first nine months of 2025 totaled KZT 1.2 trillion, up 4.7% y/y. Revenue from natural uranium sales rose 17% y/y, driven by a 10% y/y increase in sales volumes. Revenue was also positively impacted by a 13% y/y increase in the average USD/KZT exchange rate, while the realized uranium price in USD declined 5.7% y/y. On the other hand, the continued absence of enriched uranium sales in 2025 negatively affected overall revenue growth dynamics.
(+) Noticeable margin improvement. Compared to last year, the gross margin increased from 39.2% to 46.1% due to a 14% y/y reduction in raw materials and consumables expenses. EBITDA margin also grew from 52.1% to 56.4%, despite a 4.8% y/y decline in net income from associates and joint ventures. Adjusted net profit attributable to shareholders amounted to KZT 417 billion, or KZT 1,610 per share. Excluding the one-off business acquisition gain in 2024, the company’s net profit increased by 35% y/y.
Our opinion and valuation model changes. Kazatomprom’s report can be considered neutral overall, given the ongoing absence of enriched uranium sales compared with 2024. However, margins improved notably after sulfuric acid supply issues were resolved. As a result, free cash flow increased 16% y/y, raising the likelihood of higher dividends. In our valuation model, we lowered the USD/KZT exchange rate, which reduced tenge-denominated pricing. We also reduced revenue forecasts due to the absence of enriched uranium sales, while raising operating margin expectations. In addition, WACC decreased, and estimates for joint ventures were updated. Ultimately, our target price for Kazatomprom shares is KZT 27,900, reflecting a 2% premium to the current market price. Recommendation: “Hold.”