Naspers (NPN) the market darling

Category: Financial markets and Naspers (NPN)
Date: 15 August 2017 

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In today's blog we take a look at the biggest listed share on the JSE, Naspers (NPN) and its incredible share price performance over the last two years on our interactive stock chart graphic.

Brief background on Naspers

According to Nasper's website they define themselves as follows.

  • Naspers was founded in 1915 to produce a Dutch newspaper.  In the 1920's it added book publishing to its newspaper operations and grew into one of Africa's leading media groups over the next 60 years.
  • It then founded Mnet 1985 and the rest as they say is history. This lead to DSTV, online media websites etc in South Africa and acquisitions across the world with their major investmet in Tencent taking place in 2001.
  • Naspers is a global interner and entertainment group and one of the largest technology investors in the world.
 
  • Operating in more than 120 countries and markets with long-term growth potential, Naspers builds leading companies that empower people and enrich communities
  • The group has sizeable investments in Tencent (SEHK 00700), Mail.ru (LSE: MAIL), MakeMyTrip Limited (NASDAQ:MMYT) and Flipkart. Naspers is listed on the Johannesburg Stock Exchange (NPN.SJ) and has an ADR listing on the London Stock Exchange (LSE: NPSN)

Their strategy according to their website:
We believe in the power of local backed by global scale and we look for opportunities to address big societal needs in markets where we see the greatest growth potential

Their holdings are extremely diverse and spread across the world. Those in South Africa will know their best assets such as DSTV and Mnet, SuperSport, Media24 and Showmax.

While Naspers's biggest single investment is in Chinese internet and entertainment gaint, TenCent. Significant growth in Tencent subscribers and earnings over the last number of years have lead to astronomical growth in the share price of Naspers over the last two years.

Percent change:

But storms clouds have been gathering around Naspers' crown in it's jewel, Tencent in recent weeks. Below a summary of the storm clouds gathering around Tencent.
Media giant Tencent dropped 4.9% amid investigation by China’s online watchdog into reports of multiple violations, as the government tightens scrutiny over internet content.  China has increased pressure on internet media as it leads up to a political congress to be held later this month. 

According to analyst Mark Ingham, the Chinese investigation, typically murky, follows recent criticism from the Chinese government for fuelling gaming addiction among youngsters. The state controlled newspaper People’s Daily reckons the Honor of Kings mobile game is “poison” and spreading “negative energy”. 

In the run up, President Xi Jinping’s party is intent on muzzling any source of disruptive information and, according to Bloomberg, has shut livestreaming services and websites. The drop in Tencent has heavily affected Naspers, the largest share on the JSE.  Naspers took a 2.83% dive to R2 764.53. 
​
Source: Fin24
Chinese internet giant Tencent is facing scrutiny over the addictiveness — especially among younger children — of its smash, fantasy role-playing mobile gaming hit ‘Honour of Kings’. Chinese newspaper The People’s Daily has blasted Tencent for harming children in the pursuit of profit, sparking a fall in the company’s share price on Hong Kong’s Hang Seng index. 

​Naspers, which has a 34% stake in Tencent, also experienced a fall on Tuesday. Honour of Kings is key to Tencent as it helped boost the company’s mobile gaming revenue by 57% in the first quarter. Tencent subsequently has promised to limit playing time for younger children amid the debacle. But this saga is the latest tricky challenge for Naspers, which has also been accused of value destruction.

Source: Biznews

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