Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul>
<li>The discounts of both Naspers and Prosus have widened during the last 5 trading sessions.</li>
<li>We see current levels as attractive entry points for trading the rump.</li>
<li>In our view, there are a number of fundamental factors that could act as positive catalysts to a further structural narrowing of the discount.</li>
</ul>


The discounts of both Naspers and Prosus have widened during the last 5 trading sessions.
We see current levels as attractive entry points for trading the rump.
In our view, there are a number of fundamental factors that could act as positive catalysts to a further structural narrowing of the discount.


NPN X PRX: Discounts Widen as Fed Pivots on Rate Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Shareholders of <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus NV (PRX NA)</a> and <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers' Share Consolidation to move forward.</li>
<li>What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.</li>
<li>Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. </li>
</ul>


Shareholders of Prosus NV (PRX NA) and Naspers (NPN SJ) approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers' Share Consolidation to move forward.
What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.
Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. 


Prosus/Naspers - The ουροβóρος Is Dead! Long Live The Ouroboros!

<ul>
<li>In mid-September 2019, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> listed <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> on international markets, but the law required Naspers own 70+% of Prosus and it created a dual-layer NAV Discount Trade.</li>
<li>In summer 2021, they announced an Exchange Offer, where Naspers holders could get Prosus, and Prosus would end up owning 49% of Naspers, creating a cross-holding circularity - an Ouroboros.</li>
<li>In summer 2022, they launched open-ended buyback programmes, and they've bought back a lot. NOW they are unwinding the Ouroboros, going back to the pre-EO structure. buybacks will continue. </li>
</ul>


In mid-September 2019, Naspers (NPN SJ) listed Prosus (PRX NA) on international markets, but the law required Naspers own 70+% of Prosus and it created a dual-layer NAV Discount Trade.
In summer 2021, they announced an Exchange Offer, where Naspers holders could get Prosus, and Prosus would end up owning 49% of Naspers, creating a cross-holding circularity - an Ouroboros.
In summer 2022, they launched open-ended buyback programmes, and they've bought back a lot. NOW they are unwinding the Ouroboros, going back to the pre-EO structure. buybacks will continue. 


The Prosus/Naspers Ouroboros Spits Out Its Tail (Unwinds Cross-Holding to Go Back to Old Pair)

David Blennerhassett

<div>
<p>This week in StubWorld ...</p>
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<div class="content-highlight">
<p>Cashed-up <a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison Holdings (1 HK)</a> is in the market every day as its shares trade around all-time lows on an implied stub and simple ratio basis.</p>
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<p>Preceding my comments on CKH are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>


This week in StubWorld ...




Cashed-up CK Hutchison Holdings (1 HK) is in the market every day as its shares trade around all-time lows on an implied stub and simple ratio basis.




Preceding my comments on CKH are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


<ul>
<li>The accretion trade is going to plan as <strong><a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus NV (PRX NA)</a></strong> sells <strong><a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a></strong>; and Prosus and Tencent both back their own shares.</li>
<li>Preceding my comments on Prosus/Tencent One are the current setup/unwind tables for Asia-Pacific Holdcos</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


The accretion trade is going to plan as Prosus NV (PRX NA) sells Tencent (700 HK); and Prosus and Tencent both back their own shares.
Preceding my comments on Prosus/Tencent One are the current setup/unwind tables for Asia-Pacific Holdcos
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Prosus Trading "Rich". And So It Should Be

China

Prosus N.V. provides internet based services. The Company focuses on investments in internet, digital media, e-commerce retailing, and consumer internet companies. Prosus serves customers worldwide.

Prosus NV (PRX NA)

NPN X PRX: Discounts Widen as Fed Pivots on Rate Outlook

There has been a notable widening in the discounts of both Naspers and Prosus following Fed rhetoric. This coupled with a number of potential...

DMA

Prosus/Naspers - The ουροβóρος Is Dead! Long Live The Ouroboros!

The Prosus/Naspers Ouroboros is Dead. Long live the Prosus/Naspers Ouroboros. Prosus is an Accretion Engine. Know it. Use it.

Travis Lundy

The Prosus/Naspers Ouroboros Spits Out Its Tail (Unwinds Cross-Holding to Go Back to Old Pair)

Prosus and Naspers have agreed to unwind the cross-holding relationship they set up 2yrs ago. Then, it was accretion meets complexity. Now it is...

Travis Lundy

StubWorld: CK Hutch's Ongoing Buybacks

CKH looks cheap here priced at 6.8x/0.4x forward PE/PBR, together with a 50% discount to NAV. Expect buybacks to continue. Recommend an outright...

David Blennerhassett

StubWorld: Prosus Trading "Rich". And So It Should Be

For long-onlies, the trade is still to replace your Tencent with Prosus. For rel-value players, ~80% of the NAV portfolio is easily hedge-able.

David Blennerhassett