Naspers HY - Focus on Acquisitions

A few days back Prosus released their half-year results for the period ending 30 September 2020. For the sake of simplicity I am going to ignore Tencent as we have covered that one in detail separately. I am also only going to cover only Prosus as Prosus is Naspers' biggest asset by far.

The e-commerce division grew revenue by 37% to $2.6bn. That was led by a 99% growth in food delivery and an 84% growth in online retail. Losses for the segment came in at $316m which was $100m less than this time last year thanks to certain areas maturing. Younger businesses are still growing fast and need capital to scale. The mature e-commerce businesses had revenues of $1.6bn and profits of $193m.

Classifieds revenue grew 7% to $628m as global lockdowns heavily impacted the first quarter, while the second quarter saw a big recovery. Total monthly active app users increased 17% for the period and product listings grew 5%.

Payments and Fintech had revenue growth of 27% to $252m. This area is very supportive of their e-commerce division and is a great extra money spinner.

For perspective, these e-commerce businesses make up revenues of $2.6bn. Their stake in Tencent brings in revenues of $10bn and a fat profit share of $3bn. That is why the Tencent share price still dominates the Prosus share price. All in all the other businesses are getting bigger and the numbers were good for an array of companies that mostly benefited from the global pandemic.

Management is doing big share buybacks to try and close the NAV gap which we have already covered previously. We still see Prosus as the best stock to own on the JSE.