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Shuli Ren

That Naspers Tencent Gap Is Hard to Close

The deal of the century left the South African company over-reliant on one holding.
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Qilai Shen/Bloomberg

Naspers Ltd.'s conglomerate discount is widening. Its one-third stake in Tencent Holdings Ltd. alone is now worth 27 percent more than the South African internet company's entire market cap.

After a 70 percent increase in its stock so far this year, Tencent is valued at a whopping 54 times earnings, almost twice the 30 times for Google's owner, Alphabet Inc. Why don't investors prefer Naspers? The Cape Town-based company is still trading at a more reasonable 36 times profit.