Research archive for NPN

Where "things" seem to be going well, a company called Naspers. With still a strange sort of control structure, that sort of worries me. A fairly big announcement this morning, lets check it out: "Shareholders are advised that a subsidiary of Myriad International Holdings B.V. ("MIH"), an indirect wholly owned subsidiary of Naspers, has entered into agreements regarding its interest in Mail.ru, the leading Russian internet communication and gaming company. MIH will exchange its 39,3% stake in Mail.ru and invest a further US$388m (R2,9bn) cash to obtain a 28,7% economic interest in Digital Sky Technologies Limited ("DST") (the "transaction")."

How do you value Naspers? No really. Because I suspect what you must do is to separate the two parts that most investors in a South African context try and do. Because if the full price of TenCent is not taken into account in the Naspers share price, then surely for a foreign buyer you would get a discount into TenCent? The reason why I say foreign buyer is that here we can't just buy TenCent in Hong Kong, a foreigner could.

The fellows at Naspers are either lucky or clever or both. They really have travelled a great road since our market bottomed out for a first time last decade in May 2003, the stock was trading in the low twenties and now trades at and around 275 bucks. The company sold their Greek operations, it was not clear at the time, it was not core, but now it is completely clear. The company invested in a start up internet company in China, it was not clear at the time, but now we know why. The real tricky question becomes, how do we value Naspers? Is it an NAV valuation, if you don't balk at the Tencent QQ earnings multiple, Yahoo finance has it at 40 times. Google finance says 36 times. It used to be 100 times. Tencent trades on nearly 17 times book. Revenue of Tencent is one twentieth that of China Mobile. Tencent market cap is one sixth that of China Mobile. What do you think of the company? And how one should value it? Full year results 11 days time on the 29th of June.

Naspers owns a roundabout stake in Facebook. Yes really. Remember that Naspers owns 35 percent of the Chinese web company Tencent. Now Tencent is tying up with Digital Sky Technologies (DST), a Russian internet investment company. That invested 300 million US dollars in Facebook, DST that is. Want to own a piece of Facebook? Now you can. Read the FT article Tencent to invest $300m in DST. Naspers owns 43 percent of Mail.ru, an investment that DST also has a stake in, just by the by.