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Naspers Hits Record High on Tencent Profit: Johannesburg Mover

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March 14 (Bloomberg) -- Naspers Ltd. advanced to a record after profit at Tencent Holdings Ltd., China’s biggest Internet company by revenue in which Naspers owns a 35 percent stake, rose 15 percent.

Share of Naspers, Africa’s largest media group, jumped 2.8 percent to 418.50 rand in Johannesburg at the close, the highest level since the company’s 1994 listing.

Fourth-quarter net income climbed to 2.54 billion yuan ($401 million), Tencent said in a statement to the Hong Kong stock exchange today. That was in line with the 2.55 billion-yuan average of nine analyst estimates compiled by Bloomberg. Sales rose 43 percent to 7.92 billion yuan.

“Tencent is by far the biggest swing factor in Naspers and there have been big volumes today,” Wayne McCurrie, a portfolio manager at Momentum Asset Management, said by phone from Johannesburg.

Naspers earns 46 percent of sales from its pay television business and 16 percent from its investment in Tencent. Its stake in Tencent is valued at $17 billion, 76 percent of its market value of 170 billion rand ($22.4 billion) based on today’s share price.

“When you buy Naspers you are buying two things: a very stable, good cash-flow-generative pay television business and then you are buying a range of Internet-linked businesses that have still got to convert their users to cash,” McCurrie said. “We believe they can convert them so we own the share.”

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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