Questions continue to swirl around Naspers’s continued support of Tencent as a number of international investors in Chinese tech companies have been selling down or exiting their stakes. Yet Africa’s largest listed group has chosen to remain involved with and back Tencent.
“We believe firmly that the Chinese consumer internet market remains one of the most exciting places in the world to deploy capital. And we think Tencent is going to do exceptionally well in that context.” All this is compounded by Tencent having been hammered by the Chinese government’s crackdown of the tech sector over the past few years.“We will be very large shareholders for a long time and there is no intention whatsoever to do anything like what SoftBank has done, because we believe in the business and we actually are increasing the per share exposure,” said Van Dijk.
Outside the Chinese tech crackdown, some investors want the group to unbundle its Tencent stake, held through its Amsterdam-listed unit Prosus. In June 2022, the group initiated an open-ended share repurchase plan meant to help with this mission. To make this happen, Prosus went back on its word not to sell more of Tencent’s stock for three years in June, saying it needed the money to fund the buyback.
“This growth suggests that Naspers is actively seeking opportunities to expand its e-commerce presence, which can be a positive driver for future profitability. However, the pace at which this growth is happening and its potential to achieve profitability within the next two years need careful evaluation.”
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