Naspers Limited (NPN)
As the saying goes “Local is Lekker” and it does not get “Lekkerder” than when SA’s favorite tech giant, Naspers, and its colossal spin-off Prosus show signs of life again!
The Naspers Limited (NPN) share price has been under immense pressure over the last year and a bit but despite all the global turmoil and an extremely challenging operating environment, Naspers could finally be on track for a rebound.
So why all the excitement?
Naspers, through its Amsterdam-listed spin-off Prosus intends to sell down its substantial stake in the Chinese software giant Tencent to fund a share purchase program. Tencent has been a thorn in the side of our local favorite tech giant Naspers which holds a 28.78% stake in Tencent through Amsterdam-listed subsidiary Prosus NV for some time now.
The announcement came as Naspers announced its annual results for the year ended 31 March 2022 on Monday which showed a 40% drop in core headline earnings. The group’s trading profit declined by 10%, while it reported group revenue growth of 24%.
CEO Bob van Dijk had this to say about the Tencent announcement: “We expect the program to significantly increase the net asset values per share for Prosus and Naspers,” and “It will also rebalance our asset base towards our fast-growing non-Tencent assets, whose value we expect to increase over time while retaining exposure to Tencent’s significant value creation potential,”
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The news had shareholders and new investors open their wallets to get in on the action which saw the Naspers share price close 22.79% higher than the day before. Naspers, Africa’s largest listed investment group should see interest pick up but the road back to its former glory could take some time considering the current macroeconomic environment. Naspers is still committed to executing its long-term strategy and delivering strong operational growth across its core segments.
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Sources – EasyResearch, Naspers Limited, Reuters, BusinessLive
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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
