Naspers ,PRX | Order execution | PRX Initiation | NPN earnings downgrade
The discount that Naspers trades at to its underlying investments is static following the listing of Prosus. On a see-through basis, a Naspers shareholder opting for Prosus (or taking Prosus indirectly through Naspers) is in a similar position as before the listing in Sep'19. While Prosus trades at a 22.6% discount to NAV, Naspers, on a see-through basis, trades at a 36.5% discount to NAV.Prosus and Naspers report H1'20 results on Friday 22 Nov '19. We expect Prosus and Naspers to deliver 12% y/y H1'20 core HEPS growth, below growth in Tencent's contribution at 15% y/y, due to increased investment in food delivery. Naspers' discount has historically been wider with a divergence between Naspers' and Tencent's earnings. However, we expect the j-curve for food delivery to be shorter, albeit deeper than classifieds. Naspers investors have yet to fully value classifieds, a decade after initial investments. We believe the increased spend will enhance the larger opportunity available in food delivery.
Naspers and its operating subsidiaries, joint ventures and associated companies are engaged in the operation of pay television and the provision of related technologies, the operation of internet and instant messaging subscriber platforms, e-commerce platforms and the publishing, distribution and printing of magazines, newspapers and books. These activities are conducted primarily in South Africa, sub-Saharan Africa, China, Central and Eastern Europe, Russia, India and Brazil. Co. is organized into three business segments: Electronic media; Print media; and Corporate services.
Prosus NV Formerly known as Myriad International Holdings NV. Prosus NV, formerly Myriad International Holdings NV, is a Netherland-based global consumer Internet group. The Company is organized into six business areas: Classifieds, Payments & Fintech, Food delivery, Etail, Ventures and Travel. It also holds investments in listed Social & Internet assets. The Classifieds business area manages mobile and digital marketplaces. The Payments & Fintech business area includes PayU, a Payment Service Platform. The Food delivery business area manages food delivery companies. The Travel business area operates a travel online platform. The Etail business area includes business to consumer e-commerce companies. The Venture business area looks for and invests in early stage companies.
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