MORE THAN JUST A ONE-TRICK PONY?
for more than a decade, Naspers* has formed the bedrock of the retirement funds of most South Africans. Through sovereign rating downgrades, currency weakness and corporate scandals that have decimated the domestic economy and destroyed wealth, Naspers has dragged the JSE away from disastrous territory by sheer dint of its enormity in the FTSE/JSE Top 40 Index and Tencent’s ongoing growth.
As investors digest the latest set of annual results from Naspers, it is worth taking stock of how the company is positioned as the world continues to grapple with the economic fallout of an unexpected and unprecedented health pandemic.
In February of 2019, Naspers listed its satellite entertainment division, MultiChoice, and in September spun off a new entity called Prosus onto the Amsterdam Stock Exchange, designed to house all the company’s internet-based businesses, of which the largest and most notable is its 31% stake in Chinese internet powerhouse Tencent. Chief among the aims of the spinoffs was management’s desire to accede to shareholder demands for value to be unlocked by reducing Naspers’s discount to net asset value (NAV).
The discount
Since then-CEO Koos Bekker’s prescient and highly successful speculative investment into Tencent two decades ago, the Chinese company’s rapid growth soon dwarfed the value of the ‘rump’ of Naspers, which was effectively valued at less than nothing by the market. Shareholders clamoured for management
