Our opinion on the current state of NASPERS-N(NPN)
Naspers (NPN), Africa's largest company, is a massive international social media, gaming, and IT company whose main asset is 73% of Prosus (PRX), which in turn owns 26% of Tencent - a Hong Kong-listed company that provides social media services and gaming in China. Tencent has 10 of China's 20 top mobile applications, reaching over 1.1 billion users.
Naspers itself has an archaic capital structure dominated by its 907,128 unlisted "A" ordinary shareholders. Each "A" ordinary share has 1000 times the voting power of the 438.3 million "N" shares which are listed - so they effectively control the company with 67.4% of the vote. Naspers has many other interests, mainly in e-commerce, and operates in 120 countries worldwide. It has recently bought a further $500 million worth of shares in Letgo - an American classifieds platform that has more than 100 million users. It also owns Takealot and Mr. D Food in South Africa among other interests - but all those other investments are dominated by Tencent. The share's discount to its inherent value is mainly because of its "N" share structure which is frowned upon in the investment community.
Naspers has retained its online shopping operations, Takealot, Mr. D Food, PayU, and Autotrader. On 11th September 2019, Naspers separately listed Prosus on the Euronext in Amsterdam, which houses all its international assets including its stake in Tencent, Mail.Ru, and other internet brands. Naspers held 73% of Prosus and there was a 25% free float. The company has a secondary listing on the JSE. One of the benefits of the Euronext listing is that it removes the risk inherent in the rand. Prosus is now Europe's largest consumer internet company. Tencent continued to grow through the pandemic as more people turned to online gaming.
In its results for the year to 31st March 2024, the company reported revenue up 8% and core headline earnings up 88% to $2.1 billion. The company said, "This was mainly driven by the improved profitability of our Ecommerce consolidated businesses and equity-accounted investments, particularly Tencent, as well as higher net interest income during the year. Headline earnings from continuing operations rose US$1.2 billion to US$1.4 billion. At corporate level, Naspers has a net debt position of US$737 million, comprising US$14.6 billion in central cash and cash equivalents (including short-term cash investments), net of US$15.4 billion in central interest-bearing debt (excluding capitalised lease liabilities). In addition, we have an undrawn US$2.6 billion revolving credit facility."
Technically, since October 2022 the share staged a recovery, and then moved sideways between March 2023 and April 2024. Since then it has broken to new higher levels but still has not risen above its all-time high of R4090 made on 21st November 2017. We still regard this share as under-priced at the current price.
On 18th September 2023, the company announced that Bob van Dijk would resign as CEO with immediate effect. On 17th May 2024, the company announced that Fabricio Bloisi would take over as CEO of both Naspers and Prosus with effect from 1st July 2024.
Naspers itself has an archaic capital structure dominated by its 907,128 unlisted "A" ordinary shareholders. Each "A" ordinary share has 1000 times the voting power of the 438.3 million "N" shares which are listed - so they effectively control the company with 67.4% of the vote. Naspers has many other interests, mainly in e-commerce, and operates in 120 countries worldwide. It has recently bought a further $500 million worth of shares in Letgo - an American classifieds platform that has more than 100 million users. It also owns Takealot and Mr. D Food in South Africa among other interests - but all those other investments are dominated by Tencent. The share's discount to its inherent value is mainly because of its "N" share structure which is frowned upon in the investment community.
Naspers has retained its online shopping operations, Takealot, Mr. D Food, PayU, and Autotrader. On 11th September 2019, Naspers separately listed Prosus on the Euronext in Amsterdam, which houses all its international assets including its stake in Tencent, Mail.Ru, and other internet brands. Naspers held 73% of Prosus and there was a 25% free float. The company has a secondary listing on the JSE. One of the benefits of the Euronext listing is that it removes the risk inherent in the rand. Prosus is now Europe's largest consumer internet company. Tencent continued to grow through the pandemic as more people turned to online gaming.
In its results for the year to 31st March 2024, the company reported revenue up 8% and core headline earnings up 88% to $2.1 billion. The company said, "This was mainly driven by the improved profitability of our Ecommerce consolidated businesses and equity-accounted investments, particularly Tencent, as well as higher net interest income during the year. Headline earnings from continuing operations rose US$1.2 billion to US$1.4 billion. At corporate level, Naspers has a net debt position of US$737 million, comprising US$14.6 billion in central cash and cash equivalents (including short-term cash investments), net of US$15.4 billion in central interest-bearing debt (excluding capitalised lease liabilities). In addition, we have an undrawn US$2.6 billion revolving credit facility."
Technically, since October 2022 the share staged a recovery, and then moved sideways between March 2023 and April 2024. Since then it has broken to new higher levels but still has not risen above its all-time high of R4090 made on 21st November 2017. We still regard this share as under-priced at the current price.
On 18th September 2023, the company announced that Bob van Dijk would resign as CEO with immediate effect. On 17th May 2024, the company announced that Fabricio Bloisi would take over as CEO of both Naspers and Prosus with effect from 1st July 2024.
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