Naspers is feeling the love, and the burden, of Tencent
If Tencent’s numbers are stripped out, Naspers has been bleeding cash in its core operations for two straight years
Hong Kong — Naspers’s conglomerate discount is widening. Its one-third stake in Tencent Holdings alone is now worth 27% more than the South African internet company’s entire market cap. After a 70% increase in its stock so far this year, Tencent is valued at a whopping 54 times earnings, almost twice the 30 times for Google’s owner, Alphabet. Why don’t investors prefer Naspers? The Cape Town-based company is still trading at a more reasonable 36 times profit. Tencent stock, year to date: up 70% Much of Tencent’s gain has been driven by Chinese investors. Over the past month alone, mainlanders bought a net HK$6bn ($767m) or so of the shares through the Hong Kong Shanghai Stock Connect. Their stake in the Shenzhen-based company has risen to 1.3%, from just 0.8% five months ago. One could argue that foreign investors are more sceptical, and expect Tencent’s shares to correct after its second-quarter earnings, due later on Wednesday. More likely, though, they suspect Naspers is a one-tr...
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