Naspers targets growth in food to cut value gap with Tencent

The 33% shareholding in the Shenzhen-based company is worth about $166bn, while Naspers itself is valued at $123bn. There’s no reason for a discount at this “unusually high level,” chief financial officer Basil Sgourdos said in a phone interview on Wednesday.

“We are working hard to scale our other businesses to reverse this,” the CFO said. “We have strikingly accelerated our growth, profitability and scale, especially in our ecommerce businesses.”

Naspers sees food delivery as a particularly good opportunity, and is seeking more deals in the industry after the €660m purchase of shares in Germany’s Delivery Hero in September, Sgourdos said.

• READ: Naspers buys $775m stake in online food service Delivery Hero

That business sits alongside iFood in Brazil, Swiggy of India and Mr Delivery in South Africa in the company’s portfolio. Other ecommerce investments include online travel agents in India and education software providers in the US.

'Fantastic returns'

“We have seen some fantastic returns when it comes to our investments in food businesses,” the CFO said. “Recently we have invested substantially in food delivery. We really do like the segment and we believe there is a fundamental growth opportunity.”

The CFO was speaking after Naspers reported a 65% increase in first-half adjusted net income to $3.50 per share. That compared with 31% growth the previous year, and was about in the middle of a range forecast by the Cape Town-based company on November 17. Tencent earlier this month posted third-quarter net income that beat estimates.

Naspers shares rose 1.5% to R3 834.97 at the close in Johannesburg, extending the year’s gains to 91%. It’s the year’s best performer on the FTSE/JSE Africa Top40 Index. The company should buy back its own shares to take advantage of the discount to Tencent, veteran emerging markets investor Mark Mobius said last month.

Naspers is also Africa’s largest pay-TV provider, and increased subscriber numbers by 11% to 12.2 million in the six-month period.