Extract from Portfolio Manager Commentaries – Sept 2022

Naspers and Prosus continue to trade at a discount to the look-through value of the Tencent stake owned by Prosus. We wrote extensively in the prior quarter about the narrowing of this discount, which continues to apply as Prosus buys back shares using cash resources and the sale of Tencent shares. We believe that Prosus should be trading at a premium to the value of the Tencent stake since the other assets it owns (Delivery Hero, OLX, PayU and iFood, to name just a few) have real and identifiable market value – on aggregate, these assets make up roughly 30% of our own fair value for Prosus. For so long as Prosus is buying back shares, the value accretion to shareholders is significant, especially since Tencent is also buying back shares and therefore Prosus’ stake in Tencent is not declining at the current rate of share repurchases by both parties. 

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