Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Equity Bottom-Up

<p>Between early-2018 and late-2019, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> management took meaningful steps to attempt a narrowing of their discount to listed NAV, the most important of which was announcing the intended spin-off of all Naspers’ ex-South African internet assets into a new entity, Prosus, to be listed on Euronext Amsterdam, with a secondary listing on the JSE, which resulted in a narrowing of the discount from c.35% to c.25%. </p><p>However, in the year since the listing of Prosus, we have seen a “double” discount manifest given Prosus’ c. 27% discount to its listed NAV as well as Naspers’ c. 29% discount to its listed NAV (which entirely comprises its 73% shareholding in Prosus). Intuitively, this seems excessive and, in this insight, I take a closer look at, what I believe to be, the top reasons for this discount, to find catalysts which might unlock value. </p><p>I believe we will continue to see a c.25% holding company discount at Prosus, with another c.20% warranted at Naspers. I cannot, however, identify any catalysts that would cause the “double” discount to widen and have applied these values to my SOTP. I estimate fair value for Prosus at €101/share (31% upside) and Naspers at R4,404/share (47% upside).</p>

Between early-2018 and late-2019, Naspers (NPN SJ) / Prosus (PRX NA) management took meaningful steps to attempt a narrowing of their discount to listed NAV, the most important of which was announcing the intended spin-off of all Naspers’ ex-South African internet assets into a new entity, Prosus, to be listed on Euronext Amsterdam, with a secondary listing on the JSE, which resulted in a narrowing of the discount from c.35% to c.25%. However, in the year since the listing of Prosus, we have seen a “double” discount manifest given Prosus’ c. 27% discount to its listed NAV as well as Naspers’ c. 29% discount to its listed NAV (which entirely comprises its 73% shareholding in Prosus). Intuitively, this seems excessive and, in this insight, I take a closer look at, what I believe to be, the top reasons for this discount, to find catalysts which might unlock value. I believe we will continue to see a c.25% holding company discount at Prosus, with another c.20% warranted at Naspers. I cannot, however, identify any catalysts that would cause the “double” discount to widen and have applied these values to my SOTP. I estimate fair value for Prosus at €101/share (31% upside) and Naspers at R4,404/share (47% upside).

Naspers: “Double” Discount Warranted? The Search for a Catalyst Continues

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>This week in StubWorld ...</p>
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<p><a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>'s discount to NAV has narrowed considerably since its low in late March ; but <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> is at its widest NAV discount subsequent to the Prosus spin-off.  </p>
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<p>Preceding my comments on Naspers/Prosus are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...




Prosus (PRX NA)'s discount to NAV has narrowed considerably since its low in late March ; but Naspers (NPN SJ) is at its widest NAV discount subsequent to the Prosus spin-off.  




Preceding my comments on Naspers/Prosus are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.




StubWorld: Naspers Trading Cheap; Prosus Trading Rich(Er)

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Quantitative Analysis

<p>Allocations in Consumer Discretionary stocks hit a new all-time high again this month. Analysis of country positioning within the sector shows EM managers increasing exposures to Chinese consumer companies whilst reducing exposures in other key markets. We analyse the latest positioning and fund activity across the countries, industries and stocks within the Consumer Discretionary sector.</p>

Allocations in Consumer Discretionary stocks hit a new all-time high again this month. Analysis of country positioning within the sector shows EM managers increasing exposures to Chinese consumer companies whilst reducing exposures in other key markets. We analyse the latest positioning and fund activity across the countries, industries and stocks within the Consumer Discretionary sector.

Consumer Discretionary: China - The Only Engine Firing?

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<p>This week in StubWorld ...</p>
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<p>A 52% look-through discount, cashed-up from its recent share placement in <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>, and a rand hedge play, is now the time to go long <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a>, short Prosus?</p>
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<p>Preceding my comments on Naspers/Prosus/Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...



A 52% look-through discount, cashed-up from its recent share placement in Prosus (PRX NA), and a rand hedge play, is now the time to go long Naspers (NPN SJ), short Prosus?



Preceding my comments on Naspers/Prosus/Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



StubWorld: Naspers At A Look-Through Discount Of 52%

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

<p>In this note we look at two recently announced (but yet-to-close) transactions in the online food delivery space in order to get a sense of <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan Dianping (3690 HK)</a>'s valuation relative to peers. </p>
<p>This note covers:</p>
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<li>Which valuation metrics are most useful, and why?</li>
<li>Caveats associated with EV/GTV valuation approach</li>
<li>Where Meituan-Dianping's valuation stands relative to peers</li>
<li>Conclusions</li>
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<p>Note: we label this note 'Bearish' due to concerns about Meituan-Dianping's valuation</p>

In this note we look at two recently announced (but yet-to-close) transactions in the online food delivery space in order to get a sense of Meituan Dianping (3690 HK)'s valuation relative to peers. 
This note covers:

Which valuation metrics are most useful, and why?
Caveats associated with EV/GTV valuation approach
Where Meituan-Dianping's valuation stands relative to peers
Conclusions

Note: we label this note 'Bearish' due to concerns about Meituan-Dianping's valuation

What Do Two Recent Online Food Delivery Deals Say About Meituan-Dianping's Valuation?

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 SJ)

Naspers: “Double” Discount Warranted? The Search for a Catalyst Continues

Since the listing of Prosus, we have seen a “double” discount to listed NAV manifest at Naspers. I take a closer look at the top reasons for this...

Wium Malan, CFA

StubWorld: Naspers Trading Cheap; Prosus Trading Rich(Er)

This week in StubWorld ... Prosus (PRX NA)'s discount to NAV has narrowed considerably since its low in late March ; but Naspers (NPN SJ) is...

David Blennerhassett

Consumer Discretionary: China - The Only Engine Firing?

Allocations in Consumer Discretionary stocks hit a new all-time high again this month. Analysis of country positioning within the sector shows EM...

Steven Holden

StubWorld: Naspers At A Look-Through Discount Of 52%

This week in StubWorld ... A 52% look-through discount, cashed-up from its recent share placement in Prosus (PRX NA), and a rand hedge play, is...

David Blennerhassett

What Do Two Recent Online Food Delivery Deals Say About Meituan-Dianping's Valuation?

In this note we look at two recently announced (but yet-to-close) transactions in the online food delivery space in order to get a sense of Meituan...

Daniel Hellberg

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