Research archive for NPN

Earlier in the week Naspers/Prosus released results for the full year ending 31 March 2024. We have over 200 JSE clients who own Naspers, many of whom have large gains on the position.

We still have many clients that own Naspers and Prosus locally, so we pay close attention to the Tencent numbers every quarter because it's still their dominant asset.

Tencent reported weaker than expected numbers yesterday, so both Naspers and Prosus had a bad day. Revenue was up 11% from a year ago, but down 0.5% compared to the previous quarter. Tencent's recent cost-cutting measures are starting to bear fruit with operating profits up 4% quarter-on-quarter and 11% year-on-year.

On Tuesday, Prosus announced plans to sell parts of its fintech company PayU to UK-based Rapyd for a cool $610 million. The deal excludes PayU's operations in India, as well as its units in Turkey and Indonesia. It does include PayU's Global Payments Organisation, which operates in over 30 countries and makes up about a third of PayU's overall revenue. That unit has seen payment volumes grow like crazy, up over 300% in the past five years alone.

Yesterday, Naspers and Prosus enjoyed a good day, closing up 8% and 5%, respectively. Part of the gain was driven by Tencent rising by 2% in Hong Kong, but the rest was on the news of yet another group restructuring proposal. The latest brainwave will involve paying more fees to bankers, advisers and consultants. Well-known South African investor David Shapiro said what we are all thinking in the tweet below.

Sadly, Naspers announced that they are shutting down their Foundry, the R1.4 billion fund focused on South African startups. Naspers Foundry was launched in 2019 to focus on early-stage investments in South African companies that could become large future holdings for Naspers. Some of the investments include SweepSouth, Aerobotics and Naked Insurance.

It's not often that you see a R700 billion company shed 13% of its value in one day. Naspers is now down 38% since the start of the year. As Byron noted a few weeks ago, the drop in Naspers is due to a number of reasons, including having business interests in Russia and a downward re-rating of the whole tech sector.

If you own Naspers/Prosus (I will call it just Prosus going forward), you would have certainly noticed the recent beating it has taken. Both stocks are down over 30% this year. As with most market movements, the reasons for the fall are complex.

On Monday morning Prosus/Naspers released their six-month financial update. Naspers and Prosus are effectively the same entity, so for ease of reference, I'm going to only refer to Prosus here.

Naspers and Prosus had a great start to the year. They were up around 25% in less than two months. Unfortunately, they have been heading lower since early April, as investors digest the increased political risk faced by companies operating in China. At the end of last week, they had given up all their gains for the year.

A few days back Prosus released their half-year results for the period ending 30 September 2020. For the sake of simplicity I am going to ignore Tencent as we have covered that one in detail separately. I am also only going to cover only Prosus as Prosus is Naspers' biggest asset by far.

Not many SA companies can do share buybacks at the moment. Realistically only one can do R22.4bn worth of buybacks and that is Naspers.

The largest consumer internet company in Europe, Prosus released its interim results for the half-year ending in September. This is the first set of numbers after the unbundling by Naspers. Just to refresh, the company has a 31% stake in Chinese internet giant Tencent, OLX, mail.ru, Swiggy, Auto-trader, and MakeMytrip.

I'm really looking forward to the listing of Prosus (code PRX) on our market today. As a committed equities investor, I just love the way that companies evolve and then find their value on public capital markets. The term for this in trader parlance is 'price discovery'.

Ventureburn is a pretty cool South African site which focuses on everything digital from emerging markets. I have recently subscribed to their newsletter, I suggest you do too if that is something you would be interested in.