NASPERS

Share price: R1 823,07 JSE code: NPN

Financial Mail - Investors Monthly - - Opening Bell - Shaun Har­ris

SELL ME­DIA GI­ANT NASPERS IS ONE OF THE largest and most popular shares on the JSE. Most in­sti­tu­tional in­vestors hold the share. But IM thinks it’s time to exit.

Naspers’ share price is some­thing of an anom­aly. It closely tracks its China-based in­vest­ment, Ten­cent, in which it holds 34%. Ten­cent is a good busi­ness, the largest on­line firm in China, and was an in­spired buy by Naspers. But the fu­ture is not look­ing too rosy.

It’s also pe­cu­liar that Naspers’s share price should mir­ror just one of its many in­vest­ments in pay-TV, other in­ter­net com­pa­nies and print me­dia. The prob­lem for an­a­lysts is you are not quite sure what the share price is show­ing you — Naspers or only Ten­cent.

Though Ten­cent op­er­ates all over the world, it is based in China. And the Chi­nese econ­omy is not look­ing that great at the mo­ment, with GDP growth head­ing for its low­est level in 25 years. Over the first quar­ter of the year GDP was 7% — low by China’s his­tor­i­cal av­er­age. And that’s de­spite three rate cuts in the past six months by the Peo­ple’s Bank of China.

This must af­fect Ten­cent. Peo­ple will be re­luc­tant to spend money on things like mo­bile games when the econ­omy is tight­en­ing.

There’s also a ques­tion over Naspers’s other in­ter­ests, like DStv. Sub­scriber growth in SA has flat­tened, and do peo­ple in Nige­ria and Kenya re­ally want to buy a pay-TV ser­vice?

The share price, up 61% in the past year, has run too hard. It’s time to get out.

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