Tencent, Naspers’ biggest holding, is valued at approximately half of South Africa’s annual GDP

Media 24 Tencent imageNaspers, the multinational media giant with operations in internet services, pay-TV and print media, has been making headlines since the value of its shares shot up earlier this month. Headquartered in Cape Town and listed on the Johannesburg Stock Exchange (JSE), it has grown to become one of South Africa’s largest companies, with a market capitalization of R709.7 billion ($60.4 billion). Founded in 1915, the group is best known locally as one of the country’s oldest media companies, and for running Africa’s biggest pay-TV business, Multichoice. But it is Naspers’ interests in China’s biggest internet firm, Tencent Holdings, which transformed the company into a must-have in fund managers’ portfolios.

Tencent had just made its first profit when Naspers acquired a 46.5 percent interest in the company in 2001, for $32 million. The Chinese start-up was operating an instant messaging platform called QQ, and Naspers saw enough potential to take its chances. Its stake in the business has since been diluted to 34 percent, but is worth R680 billion ($56 billion) today. That’s a staggering 95 percent of the market capitalization of Naspers’ shares on the JSE.

Naspers’ rising share price follows the mid-March announcement of Tencent’s financial results. The company reported a surge in revenue from its excess of 1 billion users of QQ and WeChat, the second and more popular of its instant messaging services. Tencent is aiming to continue increasing its revenue via a serious of strategic partnerships, including integrating WeChat with Apple’s brand new smartwatch.

Tencent is not the first emerging market investment to illustrate Naspers’ dynamism. Naspers is one of the largest shareholders of the Russian website Mail.Ru, and owns Indian internet media brand Flipkart and the Polish auction website, Allegro, among others.

With no end in sight for Tencent, Naspers looks set to enjoy continued growth off the back of the world’s fifth largest internet company. Tencent’s latest set of financial results put its value at more than R2 trillion ($165 billion) – approximately half of South Africa’s annual GDP. And, if Tencent accounts for a steadily larger percentage of Naspers’ market capitalization, the company – whose name means “National Press” in Afrikaans – may soon be faced with a few pertinent questions around its own identity.

Featured Image via Future Cape Town

This post was originally published on The Future’s Muse.


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