Weaver Fintech: The billion-rand flywheel hiding in a blanket store

Key topics:Fintech now drives 98% of profits via PayJustNow BNPL flywheelMajor merchants fuel inflection: Shoprite, Takealot, groceriesStrong growth, dividends, and rerating case toward R115.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Higgo van Biljon."The best investment ideas are the ones that are hiding in plain sight." — Peter LynchMy "lightbulb moment" for this stock didn't happen behind a Bloomberg terminal; it happened at the George Mall when the share price was still R45. Walking through the corridors, I noticed that nearly every second storefront, from fashion boutiques to tech shops, was prominently displaying PayJustNow branding.I decided to test my theory on the ground. I spoke to various retailers in the mall, asking them how PayJustNow was performing in their stores. The response was unanimous: it wasn’t just growing; it was thriving. Merchants loved the higher conversion rates, and customers loved the interest-free flexibility. It was clear that Weaver Fintech (JSE: WVR) had quietly become the financial heartbeat of the South African consumer. Today, it is the second-largest holding in my personal portfolio..The Transformation: A Trojan Horse Strategy.The market is still pricing Weaver as a legacy credit retailer (formerly Homechoice). But as the saying goes: "Observation is 90% of the game; the other 10% is acting on what you see." In the latest H1 2025 results, a staggering 98% of the group’s profit and 61% of total revenue came from its Fintech division. (I expect this to continue)The strategy is elegant and brutal in its efficiency: Retail is the funnel, not the engine.Acquire: Customers enter the ecosystem for free via interest-free BNPL (PayJustNow).Data: Weaver tracks their repayment behaviour in real-time.Monetise: Proven, low-risk users are cross-sold into high-margin FinChoice insurance or personal loans.The "flywheel" effect is best seen in one devastating statistic: Customers with 3+ products generate 12x the revenue (ARPU) of single-product users..The 2026 Inflection Point: Shoprite, Takealot & many more.Weaver integrated PayJustNow across the entire Shoprite Group (including Checkers and Sixty60), Takealot, Adidas, Makro, Game and over 3000 more merchants.This fundamentally shifts BNPL from "fashion and discretionary spend" to essential groceries and tech. By moving into the "Money Market" and grocery space, Weaver is capturing the non-discretionary spend of 3.7 million active customers. Having used the checkout myself, I can confirm it is frictionless—a vital trait when competing for the "January Crunch" wallet. Furthermore, Weaver’s deals page now generates 50 million+ views, effectively turning the company into a high margin "Marketing as a Service" provider that retailers are finding impossible to unwind.Growth is clearly accelerating; PayJustNow, the group’s primary acquisition engine, consistently dominates the charts as a top-10 finance app in South Africa, currently sitting at #4 on the Apple App Store and #10 on Google Play. This digital traction proves that the flywheel is being fed at record speed, and as long as this funnel remains full, the high-margin ecosystem behind it will continue to thrive..The Numbers: A Compounding Machine.Strip away the story and the business still stands up on pure math. Since 2021, the Fintech division has delivered a Revenue CAGR of 34.1% and a PBT CAGR of 32.2%.H1 2025 Earnings: Reported EPS of 285.5 cents, a 45% surge.Dividend Yield: A robust 4.34%, supported by a 47% hike in the last interim dividend.Critics point to the 91% debt-to-equity ratio, but context is king. This is "productive debt"—the raw material required to fuel a R7.4 billion debtors' book. With interest coverage stable at 2.8x and an AI-boosted risk engine maintaining a 98% payment completion rate, the balance sheet is a fortress, not a liability..Addressing the risks.No investment is without risk, but Weaver’s positioning provides a unique margin of safety:Regulatory Headwinds: The possibility of increased regulation in the BNPL space is often cited as a threat. However, I view this as "short-term noise for long-term gain." Regulation formalizes the industry and creates a higher barrier to entry for smaller, fly-by-night competitors.Rising Competition: While local players like Payflex and HappyPay exist, Weaver enjoys a formidable "Trust Moat." Humans are creatures of habit; Weaver’s first-mover advantage and massive merchant footprint make it the default choice for consumers.Bad Debts: In a volatile economy, credit risk is paramount. However, Weaver’s data gets better with every transaction. By building their own proprietary credit scoring system through the BNPL funnel, they maintain a 98% payment completion rate—effectively filtering for the most reliable consumers before offering larger products..The Path to R115: No Fence-Sitting.When you compare Weaver to international peers like Affirm or Klarna, the mispricing is glaring. Those giants trade at massive revenue multiples while Weaver is priced like a furniture store.The Math: I believe Weaver can sustain its 35% growth into FY2026. This would place annual EPS in the region of R7.71. A very reasonable P/E re-rating to just 15x, which is conservative for a high-growth fintech with these margins—would put the share price at R115.00 vs R64.80 at the time of writing, implying an upside of 77.5% (Excluding Dividends)The final catalyst is liquidity. The top six shareholders own nearly 95% of the company. This "tightly held" structure has trapped the price, but it has created a coiled spring. As soon as institutional investors realize the Retail "mask" is gone, the supply simply won't be there to meet the demand..The Verdict.Weaver Fintech is a digital powerhouse hiding in plain sight. For the patient investor, this is a chance to buy a fintech engine at a retailer’s multiple. Sometimes the best investments don’t announce themselves with fanfare; they reveal themselves in shopping malls, if you are paying attention…In short:Why Weaver? High growth, low cost per acquisition, additional revenue streams, improving margins, mitigated risks and a dominant merchant moat. Why now? We are at the inflection point where the fintech engine has officially outgrown the retail shadow.What is the market missing? They are looking at the sign on the door (Homechoice) rather than the data on the App Stores. By the time the name on the JSE ticker fully reflects the digital reality, the R45 and R60 entry points will be a distant memory. Disclaimer: This analysis is my personal investment thesis and does not constitute financial advice. I am sharing this for informational purposes only. I have significant 'skin in the game,' as Weaver Fintech is currently the second-largest holding in my portfolio; as always, please perform your own due diligence.