Prosus 被低估，因其相对资产净值存在折价且回购驱动的价值增值，但该论点取决于管理层能否兑现承诺的利润并避免破坏价值的 AI 收购。

If you want to check Prosus out, which owns a 20-something percent stake in Tencent, it's trading at a discount, but is a different story when it comes to investing.

Let's start with Prosus. It's based on Tencent. The stock follows Tencent. So, in the last 5 years, it did what Tencent did, but the situation is different. The P/E ratio is eight, even lower perhaps if you look at from another buyback perspective.

They bought a stake in Tencent when it was nothing, so Naspers spun off Prosus to unlock more value because the position was getting too crowded for the South African market.

They own some other stakes, Meituan, Delivery Hero. They needed to sell it at a lower price, but still getting some value there.

Okay, the key is the discount. Asset value, debt, total net asset value is 153 billion dollars per share, 62 euros. Compare it to here, there is now a significant discount by buying Prosus towards the value of the stakes.

However, this is not just Tencent, there are other listed stakes, and there are other unlisted stakes that the management thinks are valued at 32 billion. Of course, as a value investor, we will always take this not at face value, but we can say maybe 16 billion in true value.

It's getting positive, it's getting profitable. So, we are not at 153, but we are somewhere a little bit lower, let's say 130. Still good compared to the market capitalization, which is around 90 billion US dollars, something more if this is euros.

So, if we look at Prosus, apart from Tencent that we discussed yesterday, they are investing into this food delivery, finance, mobile online experiences, things like that. They have partners, really big targets, but they have acquired Just Eat Takeaway, things like that.

And for the first time, the EBITDA is significantly positive, and the cash flows already for the second year are ramping up, which means that this could be self-sustainable, and therefore perhaps not be a drag on the Tencent situation.

Here is the bunch of the businesses I thought, Despegar, OLX, the European platforms selling cars, whatever, things like that. Growing the base, the EBITDA, the everything, the free cash flow on top of the free cash flow from Tencent's dividend, which means that with the buybacks, they say that they are giving more than Tencent gives just with the dividend, which is also correct.

But, with 8.3 billion in profits on a 90 billion market cap, the P/E ratio is much less than Tencent's. So, you can see here the headline earnings. Now, headline earnings improving also on the adjacent businesses, the non-Tencent contribution, which is very important.

Good balance sheet, relatively low debt levels, high interest cover, nothing there often issue. Tencent is growing the dividend. The more Tencent grows the dividend, the more Prosus benefits.

For now, they are creating value, but they are divesting some things, 91, Udemy, things like that, DoorDash.

Returned capital, huge buybacks over time, high still buybacks. The plan to compare to other businesses, so that should also benefit. Here is the Naspers Prosus situations, what they own, which is a big bunch, and then we are now left with 23% of Tencent. So, just that stake in Tencent is 45 euros per share, which means you get everything else for free.

But, okay, the discount has always been 30 to 50%. Why the discount? Because you never know what the management will do, crazy acquisition. There is some taxes if they just give you the shares.

So, they are focusing on buybacks. It takes time to give value back. But, just a funny note, if you research a little bit using AI with Prosus, this is what AI Gemini gives you. This guy here, he was still concerned back then, this was a few years ago, about the discount, the management intentions, but things are changing.

If you look a little bit at the last conference call, the CEO is happy how things are going, really growing, focusing on all the other businesses, more an operating CEO than the rest.

But, they're doing their sales of Tencent, buying back shares, adding value like that because they're buying back Tencent at a discount. Token claw, agents doing their own thing. How will that work? We don't know, but okay.

They say, "I expect and we will deliver billions in profits." If that happens, then Prosus is really a bargain. But, they're also doing something that you it's always questionable. 460 million invested in Alan, a French AI-powered tech businesses that has about what, a million people that use it. So, they paid $460 per customer or something like that.

Perhaps they will integrate it, scale it, but this is always the risks, and that is something that we have to keep in mind. There was a satirical article discussing Prosus and the new emperor that is now all about AI clothes, that's going away from the buybacks, simplification of returning value, the French AI purchases, slow down the net asset value per share accrediting buybacks, which the former emperor had once set in motion, and look at the large catapult of mistaken direction with AI with weights on the company.

You want either Tencent or AI. Perhaps they'll make a spin one day, who knows when it becomes more profitable, but Prosus has done the buybacks, and these buybacks reduced 40% of the float, and on top increased 80% the net asset value per share by owning more Tencent per share than before.

How does that work? You sell Tencent shares, you buy back Prosus shares, delete the Prosus shares, and the ratio now of Tencent per share is higher. There's also the dividend multiplier effect with the buybacks on top of the dividend.

Okay, but the important thing is never to trust AI. I just always check things, look for information, but I asked him to give me, okay, the annual value creation per share, 10 billion, and then per share 2 billion. Then I asked, "Okay, but the market cap is 80 billion. How can that be just two per share?" And then it adjusts to the situation.

So, you must really know what you're doing when comparing to AI. If I look at this, 4.84 value creation, that's double digit here. If Tencent underlying keeps on growing, if also the other businesses keep on doing well and growing, this is something to really consider for a value investing by way to own Tencent, and unfortunately or fortunately to also get all those AI situations that are now profitable, and we have seen with Uber taking over some of those delivery heroes even perhaps truly valuable. Perhaps not at 30 billion, but maybe 10-15 billion, which is already something.

So, a very interesting situation to process. You get Tencent a little bit cheaper plus a lot of that for free. There will always be something, there will always be the holding discount, but thanks to the holding discount, there is also a value accretive situation with the buybacks. If the discount narrows, you made your money.