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

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>On the 17th of January, we published an insight flagging an opportunity to put on a pairs trade long Naspers, short Prosus.</li>
<li>Since the start of the year, Naspers' underperformance relative to Prosus was, in our view, overdone.</li>
<li>Naspers has outperformed Prosus by 3.98% over the last 8 trading days. We suggest closing out at current levels.</li>
</ul>


On the 17th of January, we published an insight flagging an opportunity to put on a pairs trade long Naspers, short Prosus.
Since the start of the year, Naspers' underperformance relative to Prosus was, in our view, overdone.
Naspers has outperformed Prosus by 3.98% over the last 8 trading days. We suggest closing out at current levels.


Naspers (NPN) X Prosus (PRX): Time to Close Out Pairs Trade as Discount Falls to 8.9% from 13.7%

<ul>
<li>Improved transparency from management is an important positive. Additional disclosures were included on entity IRR in the results presentation (attached, not previously disclosed). </li>
<li>Profitability target for the consolidated ecommerce businesses moved forward to H2 FY24 from H1 FY25. Significant narrowing of trading losses in H1 FY24 to $36m from $256m in H1 FY23.</li>
<li>As management 'commit to highlight value where and when possible', we think an IPO could very well be on the horizon.</li>
</ul>


Improved transparency from management is an important positive. Additional disclosures were included on entity IRR in the results presentation (attached, not previously disclosed). 
Profitability target for the consolidated ecommerce businesses moved forward to H2 FY24 from H1 FY25. Significant narrowing of trading losses in H1 FY24 to $36m from $256m in H1 FY23.
As management 'commit to highlight value where and when possible', we think an IPO could very well be on the horizon.


Naspers (NPN SJ), Prosus (PRX NA) H1 FY24 Results, Key Takeaways

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>In Aug 2022, <a href="https://www.smartkarma.com/entities/zomato-ltd" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.</li>
<li>Leading to a selldown by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> in the same month, followed by another selldown in Oct 2023. Softbank will once again be released from its lockup soon.</li>
<li>In this note, we will talk about the lock-up dynamics and recent updates.</li>
</ul>


In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
Leading to a selldown by Softbank Group (9984 JP) in the same month, followed by another selldown in Oct 2023. Softbank will once again be released from its lockup soon.
In this note, we will talk about the lock-up dynamics and recent updates.


Zomato Lock-Up - Last of the Softbank Selldown

<ul>
<li>In yesterday’s trading session, Naspers and Prosus followed the market lower leading up to and after the US CPI print (headline worse than expected, core inline). </li>
<li>Naspers and Prosus closed 1.4% and 1.9% lower, reducing Naspers’ discount to Prosus’ market value to its narrowest level since Prosus listed. The discount closed at 10.4% (currently 10.9%).</li>
<li>Naspers has outperformed Prosus by 2.2% during the last 3 trading days. </li>
</ul>


In yesterday’s trading session, Naspers and Prosus followed the market lower leading up to and after the US CPI print (headline worse than expected, core inline). 
Naspers and Prosus closed 1.4% and 1.9% lower, reducing Naspers’ discount to Prosus’ market value to its narrowest level since Prosus listed. The discount closed at 10.4% (currently 10.9%).
Naspers has outperformed Prosus by 2.2% during the last 3 trading days. 


Naspers: Discount to Prosus Market Value Reaches Narrowest Level Since Prosus Listing

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 (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

Naspers (NPN) X Prosus (PRX): Time to Close Out Pairs Trade as Discount Falls to 8.9% from 13.7%

To those that missed the NPN/PRX pairs trade update, Naspers has outperformed Prosus by 4.1% during the last 9 trading days. We suggest closing out...

DMA

Naspers (NPN SJ), Prosus (PRX NA) H1 FY24 Results, Key Takeaways

Management intend to make PayU India a listable business by the second half of next year. Insight includes important takeaways from the results...

DMA

Zomato Lock-Up - Last of the Softbank Selldown

In Aug 2022, Zomato completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. This has led to two earlier...

Sumeet Singh

Naspers: Discount to Prosus Market Value Reaches Narrowest Level Since Prosus Listing

Recap on how the Naspers and Prosus discounts traded last week. Naspers’ discount to Prosus’ market value reached an all time low. Could see...

DMA

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