Prosus v Naspers Performance

Over the last year Prosus is up 60% and Naspers is up 44%. See the comparative graph below, Prosus is the blue line. Since the Prosus spinoff in September 2019 the outperformance has been about 14%. My calculations suggests that the spinoff has created around R400 billion extra value for shareholders.

Essentially that is what management had set out to achieve when they spun off Prosus and listed it on the Euronext. The idea was that because the Euronext was a bigger exchange, the size of Prosus would not be a problem. On the JSE, Naspers became such a large constituent of the index that many funds were forced sellers of the stock whenever the share price grew.

There is still a large discount to NAV for both holding structures. Naspers has a 48% discount and Prosus has a 38% discount.

We like all the assets that these companies own and any discount unwind will be a good upside kicker. Many people think that the easiest way to solve the problem would be to spin out Tencent. That would mean that Tencent would need to be listed on the JSE. Maybe the Chinese government don't want that? It would also make management a little less relevant because the holding companies they run will be a lot smaller.

In the interim, we are happy to hold Naspers and Prosus as the dominant positions in all JSE portfolios.