NASPERS*

Finweek English Edition - - INVESTMENT -

JP Mor­gan re­mains ‘over­weight’ in terms of its ex­po­sure to the South African tech­nol­ogy and me­dia group. The in­vest­ment bank­ing group has a 12-month price tar­get of R1 063.40/ share with a ‘sum of the parts’ val­u­a­tion of R937.20/ share. JP Mor­gan says that Naspers is en­ter­ing a high-growth, high­mul­ti­ple trad­ing en­vi­ron­ment and con­cludes: “Key to our ac­cel­er­ated earn­ings growth the­sis is that the ‘rate of change’ of (1) de­vel­op­ment spend growth, and (2) in­cre­men­tal loss growth in the core In­ter­net seg­ment will be lower in FY14E than in prior years. The di­lu­tion of pos­i­tive pay TV/Ten­cent earn­ings growth should be less and thus ab­so­lute in­cre­men­tal earn­ings growth at Naspers should be higher, by our es­ti­mates. The 59% CAGR [com­pound an­nual growth rate] in de­vel­op­ment spend over the past two years has also cre­ated a low base for Naspers earn­ings to grow off, which, in con­junc­tion with grad­ual loss re­ver­sal in the core In­ter­net

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