Big things on the cards for Naspers
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
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