Forums General Discussion Trying to understand Naspers

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  • Arjan MArjan M Newbie
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    Hi everyone,

    So I learned about the company Naspers from Adrian Saville on Tobias Carlisle’s podcast. The company is listed in Johannesburg where it represents around 1/4th of the total market by market cap at around 108B USD. Naspers is an international multi-media business operating from South Africa with holdings in prominent international businesses. Probably the most striking holding is a 30% stake in Tencent. Interestingly, on an enterprise value basis Naspers trades at a discount to its Tencent holding alone – a 30% stake in Tencent’s EV would imply an EV for Naspers of 135B USD, but Naspers actual EV is only 102B USD. Naspers owns stakes in various other internet businesses, most of which have a distinct focus on developing economies.

    I’m very much in the early stages of analyzing this business, but the ability to buy Tencent at a discount alone is quite intriguing from the get go. Tencent represents 76% of Naspers’ total revenue in FY2019. On basis of EBITDA the stake in Tencent brings in 4.3B USD on a total EBITDA of 3.8B USD. On first view Naspers appears in large part a discounted way to buy into Tencent, but I have not gone through the reports so I cannot speak yet to the value of the other equity that Naspers holds. On a PE basis the company today trades at 18.7 and a PB of 3.8.

    Interestingly, there’s a very relevant upcoming development for Naspers. Being listed in Johanneburg the institutional investors in SA are apparently limited to holding no more than 10% of an individual stock in their portfolio. This fact is cited regularly as a justification for why the stock may be significantly underpriced to its underlying assets. Naspers announced to spin off part of its business into a primary listing on the Amsterdam Exchange under the name “Prosus” (previously the listing was going to be named “NewCo”). This new listing not only makes this the stock far more attractive to buy for me as a European (SA market is still quite difficult to access), it also lifts technical constraints that many claim are keeping the stock at a sedated price.

    So I’m curious if anybody has Naspers on their watchlist and have gotten further into valuating this interesting company – especially now that it is more accessible to retail investors outside of SA.


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