Prosus: Several Ways To Own Tencent

2025-06-03 13:24:17 ET

Summary

• Naspers and Prosus trade at significant NAV discounts, in part due to reflexive selling impacts on Tencent's value and other worries, but also possibly genuine value.
• Both companies' performance is overwhelmingly driven by their Tencent stake. Direct Tencent ownership may be safer for minority shareholders.
• Naspers offers more value over Prosus if tax exemptions persist, as corporate governance concerns apply similarly for both. Though there is likely a national governance discount on Naspers.
• Share price performance is not guaranteed versus direct Tencent exposure despite the NAV discounts because they can persist and are at historically reasonable levels.
• A shareholder could be quite indifferent between them if focused on the medium term. However, it's always been the case that Naspers/Prosus private holdings are priced as written-off. There's optionality there.

Typically, a holding company will have some sort of discount to NAV. These tend to be enduring, and the median figure is between 40-60% . Prosus ( OTCPK:PROSY )( OTCPK:PROSF ), and even more so Naspers ( OTCPK:NPSNY ) which exercises great control over Prosus , both have holding company discounts, with Naspers at around 40% and Prosus at around 20% (when ignoring their venture style investments)....

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