Director’s Cut: 36ONE's Steven Hurwitz - “Prosus is a sleeping giant. China holds the key.”

36ONE’s Steven Hurwitz says Prosus has finally shifted from promise to profit, with its e-commerce brands now earning real money beyond Tencent. Buybacks are shrinking the discount and a Just Eat turnaround could unlock major upside for South African investors. The only wildcard? China still holds the key to how big the payoff can be..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.For years South African investors have held their breath over the performance of one company that dominates their portfolios. Prosus and Naspers together make up roughly 17 percent of the Top 40 index. To put it simply, if you have a pension fund, a retirement annuity, a unit trust, or even a modest brokerage account, you have exposure to this business. Whether you like it or not.And for just as long, the story has been the same. Tencent powers the entire group like a gold mine that never stops producing. Everything else has looked like a distraction. Billions spent on businesses around the world with little to show for it. The market started discounting the company more and more. Investors were effectively saying Tencent is brilliant, but the rest of the portfolio is burning money.That narrative, according to 36ONE Asset Management’s Steven Hurwitz, may finally be changing.“Investors are much better off in this process today than they were a couple of years ago” Speaking to BizNews editor Alec Hogg, Hurwitz said the shift began last year. It was subtle at first. Tucked inside the results was something the market had been waiting more than a decade for. The e-commerce assets were not only growing. They were starting to make money.That is new. For years Prosus and Naspers poured capital into delivery services, classifieds, tech platforms and online retailers that promised scale, but never delivered profits. Now, says Hurwitz, some of the biggest businesses in the portfolio are both profitable and growing fast. That changes everything. A portfolio that was always judged as Tencent minus the losses is starting to look more like Tencent plus growth.The discount to net asset value, which has always haunted the shares, tells the story best. It has already narrowed, and could narrow even further.A new CEO and a new cultureMuch of this shift coincides with the appointment of Prosus CEO Fabricio Bloisi, the Brazilian tech entrepreneur who built iFood, the group’s Latin American gem. Hurwitz calls him exactly the type of leader the organisation needed.“They went for an operator, not a financial engineer” Bloisi is not sitting in Amsterdam waiting for PowerPoint slides and forecasts. He is on a plane every week, directly engaging with business units around the world. There is no silo mentality anymore. Teams across continents are sharing data, strategy, and artificial intelligence capabilities. That kind of collaboration did not exist in the past. And it is already visible in the numbers.The cultural shift matters more than most shareholders realise. Bloisi’s mission is not growth at any cost. It is growth with profitability. For a group once obsessed with expensive acquisitions, that is a serious change in behaviour.The buyback debate and when it endsProsus has spent tens of billions buying back its own shares, funded by selling Tencent stock. It has boosted shareholder value. But there is an obvious concern. If you keep selling Tencent, you eventually lose influence inside Tencent itself. Hurwitz says that is a line management does not want to cross. Instead, they will look to fund buybacks by selling other assets, not Tencent.Which ones could they unwind Will they reduce stakes in food delivery players like Delivery Hero and Meituan Yes, says Hurwitz. Those sales are not optional. They are either required by regulators or make strategic sense, particularly when those competitors enter markets where Prosus is operating.The controversial acquisition of Just Eat Takeaway will be the CEO’s biggest test. Hurwitz believes Bloisi’s deep history in food delivery gives Prosus the best shot at turning around a struggling business, but the outcome could easily go either way. Get it right and the discount narrows. Get it wrong and the market punishes the share price again.What about Takealot and South AfricaHurwitz is blunt about Takealot. Yes, profitability has improved. But the economics of online retail are tough, and South Africa’s stagnant growth makes it even tougher. Amazon’s entry provides massive consumer benefits, but will crush margins across the industry. Add Walmart’s renewed enthusiasm and Checkers’ 6060 platform, and Takealot has a street brawl ahead of it. Still, Takealot is small relative to the whole portfolio. If it fails or gets sold, it barely moves the needle.Should you buy the shareHurwitz will not give direct advice, but he is clear. This is one of the best investments on the JSE. Strong Tencent growth ahead, a deep discount to intrinsic value, and a management team finally behaving rationally.“I would be very comfortable having my money exposed to Naspers and Prosus” The discount remains roughly 40 percent. Investors are buying R1 of assets for about 60 cents. That does not mean the discount will automatically close. But for the first time in years, Prosus and Naspers are building something real outside China, not just subsidising it.It is no longer a Tencent story with expensive baggage. It is slowly becoming a global tech portfolio with Tencent as the anchor. Long-suffering South African investors might finally be getting what they have waited for. Patience, it seems, is being rewarded.

Director’s Cut: 36ONE's Steven Hurwitz - “Prosus is a sleeping giant. China holds the key.”

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