🔒 Alec Hogg: Nothing Fawlty about this Basil’s logic – Naspers aims to close 52% discount

Basil Sgourdos, Naspers CFO

Yesterday’s Rational Radio webinar with Naspers group CFP Basil Sgourdos was a pearler. I kinda got an answer to the possible offloading of the group’s loss-making SA media assets – well maybe, but nobody really wants media right now – and we heard a justification for the well paid executives: the non-Tencent assets are worth $30bn, around three times the capital invested into them.

Also read: Alec Hogg: Naspers loses interest in its loss-making legacy SA media asset

The big story of the webinar, however, was how seriously the Naspers team is approaching the embarrassingly high discount of its share price to the value of its 31% stake in Tencent. Sgourdos says the $5bn share buyback announced last month is only one of many ideas the address this value trap. We should expect to see more action on this front, he added.

That message is sure provide comfort for Naspers’s huge SA fan base. The graph (above) of share price percentage increases over the past five years, clearly shows the discount between SA’s most important stock (21% of JSE All Share Index) and the market value of its Chinese investment, has never been greater.

Also read: Alec Hogg: SA’s financial services Empire strikes back – true motive exposed

Were Naspers to equate trade its Tencent holding alone, the share price would be a touch over R6 000 rather than the current level around R3 100. Put another way, if you add back that $30bn worth of “other” Naspers assets (R400bn – over R1 000 a share) then the true discount at the current price is a staggering 65%. A dripping roast for value investors.


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