After an astonishing three decades, the JSE’s long-time rocket Naspers has been in cruise control over the past five years, its share price appreciating a relatively modest 17% a year since 2014. Decent by most standards. But positively pedestrian compared with the surge in the underlying value of its major asset, a 31% stake in Hong Kong internet giant Tencent.
Such has been Naspers’s relative under-performance that it has become a favourite among SA value investment managers, led by Allan Gray. These bargain hunters have been piling into the shares, unable to resist paying 60c for each dollar of the company’s value (Naspers trades at a 40% discount to its Tencent shareholding – with all its other assets thrown in for free).
News from the respected Brand Finance is sure to further stimulate their appetites. The London-based company which calculates the value of global brands has announced WeChat (owned by Tencent) as the world’s fastest expanding brand of the past five years – its $3bn of 2014 mushrooming to $50.7bn – a compound annual growth rate of 75%.
Chinese brands occupy eight of the Top Ten positions on Brand Finance’s table, with only Facebook (5th with five year CAGR of 53%) and Porsche (6th – 52%) preventing a Middle Kingdom clean sweep. On the Top 100 list published yesterday, Tencent itself comes 12th (45%), just behind Netflix (46%) and marginally ahead of Discovery’s Chinese partner Ping An (16th – 44%). On this evidence, Naspers is still onto a good thing. As are its shareholders.
