Hepsiburada subsidiary issues TRY 150 million bond

ISTANBUL - D-MARKET Electronic Services & Trading, commonly known as Hepsiburada (NASDAQ: HEPS), a prominent Turkish e-commerce platform, has completed the second bond issuance through its subsidiary, Hepsi Finansman A.Ş. (Hepsifinans). The bonds, issued to domestic qualified investors today, have a total principal amount of TRY 150 million, a six-month maturity, and offer quarterly coupon payments with an annual interest rate of 51.50%.

This latest financial move follows the approval by the Capital Markets Board for Hepsifinans to issue bonds or bills totaling up to TRY 1,050,000,000 within a year, as reported on September 11, 2024. The funds raised from this bond issuance are earmarked for the expansion of Hepsiburada's consumer finance business, as the company continues to grow sustainably.

Hepsiburada, established in 2000, operates as a comprehensive e-commerce technology platform in Türkiye, boasting over 66 million members and providing access to more than 264 million stock keeping units across various product categories. The platform operates through a hybrid model, facilitating both direct sales and a third-party marketplace that hosts approximately 101 thousand merchants.

The company's ecosystem extends beyond e-commerce, offering last-mile delivery, advertising services, and on-demand grocery delivery. Additionally, Hepsiburada provides payment solutions through Hepsipay and Buy Now, Pay Later (BNPL) services. Its international arm, HepsiGlobal, allows local merchants to engage in cross-border sales, further expanding its e-commerce reach.

Hepsiburada has also been recognized for its 'Technology Empowerment for Women Entrepreneurs' program, which, since 2017, has supported around 55 thousand female entrepreneurs in Türkiye to connect with customers.

The information for this report is based on a press release statement and is intended to provide investors with key insights into Hepsiburada's financial activities. It should be noted that forward-looking statements in the press release are not guarantees of future performance and are subject to various risks and uncertainties. Investors are advised to consider these factors when evaluating the company's prospects.

In other recent news, D-Market Electronic Services & Trading, known as Hepsiburada, has reported significant financial developments. The company's Q2 2024 results showed a 33% year-on-year increase in order volume, reaching 36.7 million, and a doubling of Gross Merchandise Volume (GMV) compared to the first half of 2023. Active customers also grew to 12.1 million. Analysts predict strong Q3 results, forecasting GMV growth between 70% and 75% year-on-year, and an EBITDA margin of approximately 2.2% of GMV.

Hepsiburada recently reshuffled its Board of Directors' committees, enhancing its corporate governance and risk management practices. In addition, the company's subsidiary, Hepsi Finansman A.Ş., issued bonds with a principal amount of TRY 250 million to support the expansion of its consumer finance business. Hepsiburada also raised TRY 350 million through its second asset-backed securities issuance, aimed at bolstering its Buy Now, Pay Later business segment.

The company also disclosed that Kazakhstan-based Joint Stock Company Kaspi.kz is set to acquire all outstanding Class A and Class B shares of Hepsiburada from certain selling shareholders, leading to an anticipated change of control of the Turkish e-commerce platform. D-Market also provided a regulatory filing to the U.S. Securities and Exchange Commission (SEC), underscoring the company's compliance with U.S. securities law. These are the recent developments in Hepsiburada.

InvestingPro Insights

Hepsiburada's recent bond issuance aligns with its growth strategy, and InvestingPro data offers additional context to the company's financial position. As of the last twelve months ending Q2 2024, Hepsiburada reported revenue of $1.20 billion, with a modest growth of 0.97%. This revenue figure underscores the company's significant market presence in the Turkish e-commerce sector.

InvestingPro Tips highlight that Hepsiburada "holds more cash than debt on its balance sheet," which is particularly relevant given the recent bond issuance. This strong cash position suggests that the company is well-equipped to manage its new debt obligations while pursuing growth opportunities in its consumer finance business.

Another InvestingPro Tip indicates that "net income is expected to grow this year." This projection is encouraging for investors, especially considering that the company was not profitable over the last twelve months. The anticipated profitability aligns with Hepsiburada's strategic moves, including the expansion of its financial services through Hepsifinans.

It's worth noting that Hepsiburada's stock has shown remarkable performance, with a 156.15% price total return over the past year. This significant uptick suggests growing investor confidence in the company's business model and growth prospects.

For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for Hepsiburada, providing a deeper understanding of the company's financial health and market position.

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