Cents add up to more than rands
Why Naspers is still a buy
The company’s stake in China’s Tencent has brought it huge profit, but other operations’ contribution lagged
Tencent has delivered the goods yet again for Naspers, ramping up net profit 43%, to US$5.97bn, in its year to December. For Naspers, proud owner of a 34% stake in the Chinese online giant, it translates into an equity accounted profit of $2bn. Not bad going for what was something of a hit-or-miss venture capital move made by Naspers in 2001, when it paid $33m for its stake in Tencent, then an unprofitable online instant messaging start-up. Today, this stake is worth $94bn, based on Tencent’s $276bn market cap. Naspers’s move in 2001 bought it a place in China’s Internet sector which, with only 33m users at the time, was on the verge of explosive growth. At the end of 2016 Tencent alone reported 889.3m monthly active users on its WeChat social network mobile platform. The number was up 27.6% on a year earlier. Performance across Tencent’s value-added online services, which include its core game offerings and social networks, was strong, with revenue up 34% to $15.7bn — 71% of total ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.