Naspers aims for July listing on Amsterdam’s Euronext
SA's largest technology investor, Naspers which owns a significant portion of Chinese internet giant Tencent, says it is not worried about tension between Beijing and Washington.
Naspers CEO Bob Van Dijk told Business Day that Naspers' business is quite robust to the effects of the US-China trade war.
Earlier in May , the US effectively black-listed China's biggest technology company Huawei from doing business with American business, which affects the company's ability to receive components for its products.
Van Dijk said Tencent is a very China focused business, offering digital goods. There’s no physical import or export [of products or components] associated with the company.
He said the same can be said about their main investment in the US, Letgo, which facilitates the buying and selling of second hand goods domestically.
The direct impact on Naspers business is quite minimal, he said.
“Our business is very resilient to the trade war, which makes us sleep well at night.”
“The capital market make us sleep less well,” he said admitting that Chinese technology stocks had taken a hit because of the trade war.
The effects of Huawei's blacklisting were first felt on the JSE last week Monday when negative sentiment around tech stocks in Asia affected companies like Tencent, which saw a drop on the JSE through Naspers share price reacting negatively.
As a technology business operating in both the US and China, some analysts believes Naspers may be affected by the ongoing US-China trade-war.
Ernie Gruhn, technical analyst at Momentum Securities said "we are unlikely to see specific decisive price movements in the share price based on the announcement primarily as a result of a trading environment which is currently dominated by concerns surrounding the US-China trade dispute."
He said "the expansion of the initial “trade spat” into a broader technology dispute ( primarily triggered by the US governments targeting of Huawei) will undoubtedly negatively influence investor sentiment towards the sector even if the immediate operational outcomes are initially not discernible."
It remains to be seen what effect, these geo-political matters will have on Naspers.
On Wednesday, the company announced its plans to list its international consumer internet assets in Amsterdam on July 17.
Africa’s largest public company said in March it would separately list assets, including its prized stake in China’s Tencent and its classifieds and food-delivery operations.
Current shareholders will be given the option to get 1 NewCo share for each share they have in Naspers.
Van Dijk said “based on investor feedback, we expect the majority of our shareholders to want those shares.”
Naspers said it would own at least 73% of the Amsterdam-listed entity.
He said no new shares will be offered as yet. “No current plan for a new capital raise,” said Van Dijk.
This followed pressure from investors to reduce Naspers’s valuation discount, which the company blames largely on it having outgrown the JSE.
The group, which would retain its primary listing on the JSE and secondary listing on A2X, was expected to remain the largest SA company on the JSE by market capitalisation, it said.
It would also not lose its inclusion in JSE indices and would directly own Media24, Takealot and Property24.
Van Dijk said Naspers will continue investing in online businesses Takealot, Mr D Food and Superbalist. “Those businesses are still in the growth phase and not making money,” he said.
The company is definitely looking for new opportunities in SA, Van Dijk said.
"We’re close to announcing an investment in a new and exciting company."