Big things on the cards for Naspers

Finweek English Edition - - PRO PICK - BY Rhyn­hardt Roodt Port­fo­lio manager at In­vestec As­set Man­age­ment

While we ex­pect Ten­cent to re­main the driver of earn­ings for the fore­see­able f uture, we be­lieve f uture earn­ings ex­pec­ta­tions for Naspers’s rump as­sets (as­sets ex­clud­ing Ten­cent) will be re­vised sig­nif­i­cantly higher.

In Novem­ber, Naspers an­nounced an agree­ment to es­tab­lish a j oint ven­ture with in­ter­na­tional me­dia group Schib­sted for the devel­op­ment of on­line clas­sif ieds plat­forms in key emerg­ing mar­kets, in­clud­ing Bangladesh, Brazil, In­done­sia and Thai­land. We a re par­tic­u­larly ex­cited about this gamechang­ing agree­ment, which should un­lock the value of its on­line clas­si­fieds busi­ness.

For some time now, the mar­ket has been plac­ing no value on Naspers’s ‘rump’ as­sets, as th­ese busi­nesses were con­sum­ing al­most all of the group’s cash f low. Un­til re­cently, in­vestors had no line of sight as to whether Naspers would be able to mon­e­tise th­ese as­sets in a win­ner-takes-all sec­tor, such as on­line clas­si­fieds.

By seek­ing sen­si­ble merg­ers where t hey have strong com­peti­tors, t he op­er­a­tors should be able to share costs, ex­per­tise and most im­por­tantly, lower their mar­ket­ing spend. Thus, we be­lieve this joint ven­ture will lead to a rerat­ing of th­ese busi­nesses. * Finweek is a pub­li­ca­tion of Me­dia24, a sub­sidiary of Naspers

R983.25 - R1 744.64

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