Investment idea: Naspers and Prosus
4Tencent, the largest contributor to the NAV of Naspers and Prosus released its full-year results in March 2024. The market had a neutral reaction to the results, which were mixed. Naspers and Prosus are expected to release the full-year results in June 2024. In this report, we summarise Tencent’s latest results, update valuation and provide an update on Naspers and Prosus’ respective discounts to NAV.
Tencent is trading 4% lower while the respective share prices of Naspers and Prosus are relatively unchanged since our last report in November 2023 (hold recommendation).
Our intrinsic value on Naspers and Prosus has increased marginally due to the market movements of listed investments and the impact of share repurchases.
We maintain a hold recommendation for both counters. We also anticipate that Naspers and Prosus will not perform as well as Tencent, given a potential rebound which depends partly on the successful launch of new games in 2024, improved sentiment towards China, a strengthened Chinese economy, and, importantly, a favourable regulatory environment.
Our research supports a hold recommendation.