Chinese tech giant worth R8.2 trillion that South Africans can buy at a discount
Naspers and Prosus offer an attractive entry into the Chinese technology giant Tencent, with investment analysts bullish on the stocks.
Naspers is one of South Africa’s most valuable companies and owns local assets including Takealot, Media24, Autotrader, and many others.
Netherlands-based Prosus then houses the international assets of Naspers, which include a large stake in Tencent, which is crucial for the company’s wealth.
In a notoriously complex transaction, Naspers and Prosus previously had a cross-ownership structure in which they owned large stakes in each other.
The relationship was simplified in 2023, with Naspers owning around 57% of the economic interest in Prosus, while Prosus no longer owns shares in Naspers.
Naspers has a market cap of around R642 billion, while Prosus has a market cap of 85 billion euros (R1.6 trillion).
A large portion of Naspers and Prosus’ wealth is tied to their stake in Tencent, which they acquired in 2001 for $32 million, gaining a 46% stake.
This investment turned into a masterstroke, with Tencent becoming one of the world’s leading technology companies.
Tencent is the world’s largest video game publisher, owning stakes in Riot Games, Epic Games, and Supercell. The company also owns WeChat and the instant messaging platform QQ.
Tencent now has a market cap of HK$ 3.96 trillion (R8.2 trillion). Naspers and Prosus have gradually reduced their stake in Tencent to around 23%, but still offer a discount to the Chinese giant at current share prices.
Naspers’ most recent financial results for the six months ended 30 September 2026 were somewhat positive, with the company’s consolidated revenue increasing 20% to US$4.1 billion.
The group’s earnings from continuing operations increased to US$2.4 billion from US$2.0 billion in the prior period.
This rise in earnings from continuing operations was primarily due to higher profitability in consolidated and equity-accounted results, driven by Tencent.
There was also a gain following a small disposal of Tencent. On a total operations basis, Naspers’ earnings per share rose 36.53% to $0.299.
However, as reported by Reuters, Tencent’s first-quarter results were below analyst expectations due to higher AI spending and an increasingly crowded market.
Tencent’s stock has dropped sharply since the start of the year amid earnings misses, stricter Chinese regulations, and tensions between China and the US, impacting Naspers and Prosus’ share prices.
Analysts like what they see
Despite Tencent’s recent struggles, analysts in South Africa are incredibly positive about the company’s prospects, making Naspers and Prosus attractive investments.
Speaking with Business Day TV, Robert Towell, Portfolio Manager from Otto1890, picked Naspers and Prosus as his stock pick.
“If you wanted to know which one to pick, Naspers has a slightly larger discount, but really, it’s a Tencent story,” he said.
“Tencent is buying back its shares, Prosus is buying back its shares, and Naspers is buying back its shares.”
He added that Tencent is really undervalued compared to its peers, and thinks it has a lot of runway left. Thus, a good entry point in the South African market is to buy Naspers and Prosus, he said.
Brendan Capstick, Portfolio Manager at Nedbank Private Wealth, also recently picked Prosus as his stock pick when speaking with Business Day TV, having previously chosen Naspers.
Capstick said that his pick comes down to Tencent, noting that the company’s recent Q1 update was pretty solid.
He said that while the market is concerned about the company’s AI spend, he believes it will benefit from that investment in the long run.
“Tencent is trading at a 13 times forward multiple, which is historically low for them,” Capstick said.
“Prosus is now trading at a deep discount to net asset value, as well as buying back shares. Prosus is trading at a discount of around 36% to net asset value.”
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