Analyst recommendation

                                                                                                           As at 3 December 2024

Executive Summary

In our last report on Naspers and Prosus (in Sep 2024), we discussed the management changes and Tencent’s 2Q24 results, since then, the following events have taken place:
• Naspers and Prosus released half-year results for FY2025.
• Trip.com has been disposed of and Swiggy Limited IPO’d in India, valuing it at $11.3bn at the time of listing.
• Prosus 1st half results had the following highlights:
o Operations delivered top line growth of 26%.
o Adjusted EBIT came in at $60m, turning positive for the first time after reporting a loss of $110m in the first half of 2024.
o Profitability was driven by Classifieds and Food Delivery with EBIT figures of $133m and $94m respectively.
o Core headline earnings increased 76% to $3.5bn
We have updated our valuation to account for the continued share repurchases (repurchase history in Appendix) and changes in market value of listed assets. We have made adjustments to the position of Trip.com and the Swiggy Limited listing. Our intrinsic values remain relatively unchanged (previously NPN: R3 840 and PRX: R740).

Analyst thesis

Naspers and Prosus shares trade at meaningful discounts to NAV. Management continues to address the closing of the discount which could unlock value for shareholders. However, Naspers and Prosus remain significantly exposed to Tencent which comes with substantial risks. Our view on Tencent, the primary driver of Naspers and Prosus shares and the largest component of NAV, remains cautious especially given the unpredictable and significant influence of the Chinese government.

Results

Table 1: 1H25 Results summary

Valuation

Table 3: Valuation

Table 6: Valuation multiples

Source: FactSet