Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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!

David Blennerhassett

<ul>
<li>Since unwinding the <strong><a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a></strong>/<strong><a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a></strong> circularity, Prosus has been selling Tencent shares, and buying back its share. Separately, Tencent is buying its shares to offset Prosus' selling. </li>
<li>Prosus' stake in Tencent has now edged below 23%, a little over seven months since dipping below 24%.</li>
<li>On an implied stub and relative value, Prosus is elevated to Tencent, suggesting an unwinding of the stub.</li>
</ul>


Since unwinding the Naspers (NPN SJ)/Prosus (PRX NA) circularity, Prosus has been selling Tencent shares, and buying back its share. Separately, Tencent is buying its shares to offset Prosus' selling. 
Prosus' stake in Tencent has now edged below 23%, a little over seven months since dipping below 24%.
On an implied stub and relative value, Prosus is elevated to Tencent, suggesting an unwinding of the stub.


Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<ul>
<li>The removal of their cross-holding structure has had a negligible effect on the respective discounts to NAV for <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>.</li>
<li>We have seen a remarkable turnaround in Prosus’s operating performance during FY2024 and the market will focus on whether the new CEO can achieve his ambitions for “profitable growth”.</li>
<li>The open-ended share repurchase program will continue as long as the discount remains “elevated”.</li>
</ul>


The removal of their cross-holding structure has had a negligible effect on the respective discounts to NAV for Prosus NV (PRX NA) and Naspers (NPN SJ).
We have seen a remarkable turnaround in Prosus’s operating performance during FY2024 and the market will focus on whether the new CEO can achieve his ambitions for “profitable growth”.
The open-ended share repurchase program will continue as long as the discount remains “elevated”.


Prosus (PRX-NA): Profitable Growth, Elevated Discount

<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)

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.

<ul>
<li>Discounts likely set for further narrowing as Chinese government adopts a more positive stance towards the private sector (Tencent).</li>
<li>The discounts of Naspers and Prosus have recovered to levels last seen prior to the publication of the Chinese Military Companies list by the DoD at start of the year.</li>
<li>Last week Friday, Tencent rallied 7.4% following news that the Chinese government are expected to host a summit with Jack Ma and DeepSeek founder, Liang Wenfeng.</li>
</ul>


Discounts likely set for further narrowing as Chinese government adopts a more positive stance towards the private sector (Tencent).
The discounts of Naspers and Prosus have recovered to levels last seen prior to the publication of the Chinese Military Companies list by the DoD at start of the year.
Last week Friday, Tencent rallied 7.4% following news that the Chinese government are expected to host a summit with Jack Ma and DeepSeek founder, Liang Wenfeng.


NPN X PRX: Discounts Likely to Catch Further Bid on China News Flow

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.

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Prosus NV (PRX NA)

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.

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Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds

Reportedly Prosus has sold ~15mn shares in Meituan, worth ~US$250mn. Prior to the alleged sale, Prosus held ~257mn Meituan shares, ~4.2% of shares...

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Prosus (PRX-NA): Profitable Growth, Elevated Discount

In this insight, we analyse Prosus’s discount to NAV, the performance of its underlying consolidated operations, cash flow generation, capital...

Wium Malan, CFA

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

NPN X PRX: Discounts Likely to Catch Further Bid on China News Flow

The discounts of Naspers and Prosus are expected to catch a further bid as China adopts a more positive stance towards private sector. Tencent...

DMA

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