Africa News Bulletin

Beijing and Tencent are putting Naspers under increasing pressure

The South African group Naspers has completely transformed itself after investing early in the Chinese giant Tencent. But in recent years, the latter’s success has created problems. The Chinese authorities, by attacking digital players, have complicated matters.

More than ever, Bob van Dijk, CEO of South Africa’s Naspers, finds himself on the front line of the financial markets. The largest capitalisation on the Johannesburg stock exchange ($76bn) and its subsidiary, Prosus, which is listed in both Amsterdam and Joburg, have seen their share prices fall for almost a year (respectively -25 and -23%). Yet their results are largely positive.

Naspers made a profit of $5.3bn during the last financial year ending March 2021 (on sales of $29.6bn). With no real solution in sight, the leader took a gamble in early January by personally buying around 155m rand worth of Prosus shares in order to restore investor confidence.

Taking control
From the analysts’ point of view, van Dijk’s group is too dependent on the results of China’s Tencent, in which it holds 29% and which has made it one of the world’s largest tech investors. At the end of September, its capital was valued at a discount of more than 60%, compared to the real value of its assets. And Beijing’s brutal takeover of the digital economy since the second quarter of 2021 complicates the situation even more.

READ original article on The Africa Report

 

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