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Prosus- Top notch China/Asia exposure in NL.

Analysing companies' finances and value from their financial statements using ratios and formulae
Humeau
Posts: 36
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Prosus- Top notch China/Asia exposure in NL.

#448283

Postby Humeau » October 6th, 2021, 1:06 pm

This company owns one of the very top businesses in China and the world and is on offer at BOGOF prices!

I've been looking at this for some time and have over the last 10 days bought some and will buy more.

I'll whet your taste buds with this little 'Amuse Bouche'.


Frank Taber
@frankinvesting
·
Oct 5
Imagine a founder-led company with a proven track record of great capital allocation that had operations of $FB $PYPL $MA $V $SE $NFLX $ATVI $EA combined with >30% FCF margins and ~35% 10Y FCF CAGR.

What would you pay for it? What’s a fair multiple?

Humeau
Posts: 36
Joined: July 24th, 2019, 7:47 am
Has thanked: 18 times
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Re: Prosus- Top notch China/Asia exposure in NL.

#448288

Postby Humeau » October 6th, 2021, 1:24 pm

The business is $TCEHY and it’s selling for ~19x earnings.

If you back out the $200B (low-ball estimate) investment portfolio it’s selling for just ~12x earnings.

Even with the regulatory headwinds I don’t see how this isn’t appealing to most investors.

https://www.prosus.com/news/net-asset-value/

When you consider that the share price of Tencent has come down nearly 40% from the peak in January and the growth potential of the business, you might want to investigate further.

This is especially true if you even start to understand how companies like Facebook, Mastercard, Amazon and Paypal, make their money and how each year their moats and their margins and ROIC get better.

This is not China on a plate, though both Tencent and Prosus have acquired food delivery businesses which I don't like and certainly don't understand why they are investing in such low margin shite. It is more China(Asia) on a mobile phone!

They are in dominant/very positions in everything relating to that and in the fastest growing economies in the world, with plenty of runway over the next two decades.


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