How do you value Naspers?

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.
Here we have to be content with old currency control laws from the apartheid era. True, but those laws have relaxed over time, but I wonder what they would be in Dollar terms.



What are the parts first and foremost of Naspers? The first part is TenCent incorporated, as per their website it was "founded in November, 1998, Tencent, Inc. (and) has grown into China's largest and most used Internet service portal. In its ten-year history, Tencent has been able to maintain steady and fast-paced growth by always putting its users first."



I was on CNBC Africa yesterday afternoon with what I consider to be one of the best local market commentators, perhaps underused because his area of expertise is telecoms. And we were talking specifically about Naspers, it was great to see his point of view. So here goes, courtesy of ABN Digital Bronwyn Nielsen speaks to Khulekani Dlamini from Afena Capital about Naspers. Makes some of the points that I wanted to make about Naspers. Nearly 90 million people online on QQ at anyone given time. I dislike seeing myself on the box, I don't know why. TenCent at current levels trades somewhere around 25 times earnings, something that has not happened for four years. Cheap? Perhaps.



The way I see it, this is one of the few businesses that have been able to monetize social media. Think of the problems that both Facebook and Twitter face and the fact that the investing public is hungry for an IPO in either, but neither company makes enough (or any) money to go ahead at this stage. Remember that the recent part acquisition by TenCent of Digital Sky, who in turn own a piece of Facebook, means that Naspers shareholders can get a piece of the action almost immediately. Without having to wait. But TenCent makes money off social media. Real money.



I saw something interesting via Carpe Diem which is very interesting and tied into social networking, I guess relevant for Naspers: Online Canadians Report A Large 35 percent Decline In The Amount Of Email Received. Developed world right? I fired this off to a favourite geek of everyone and his response back at me was as interesting: Entner: Quantifying the mobile data tsunami and its implications. All rather fascinating about the underutilisation of handsets, leading me to believe that they are as much fashion accessories than mobile handsets. One thing is for sure, more people are going to use social media, and not less.