What is SA’s biggest company really worth?
The discount at which it trades to its investments is enormous and has been growing fast over the past two years
The sale of India’s largest e-tailer, Flipkart, to US giant Walmart adds a new twist to the long-running debate in SA about the value of Naspers, with investors at odds about whether it’s possible for SA’s largest company to close its investment discount. The discount at which Naspers trades to its investments is enormous and has been growing at breakneck speed over the past two years. The most obvious and well-known example is that Naspers’s 31.4% stake in Chinese company Tencent outvalues Naspers itself by around 45%, implying that on this basis alone Naspers should be worth not the R1.3 trillion at which it is currently valued but a gobsmacking R2 trillion.Implicitly, the JSE is valuing Naspers’s entire other worldwide business at much less than zero, just comparing the value to the stake in Tencent — never mind the host of other listed businesses in which Naspers has invested. If there is any logic to this undervaluation it’s that many of Naspers’s other businesses may require c...
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