Yiping schreef op 16 februari 2022 15:44:
Guys, I have followed/ trade this stock for quite some time, here I would like to share some of my insights about why prosus is so weak.
When we buy a company ,we are buying the future cash flow. How could Prosus generate cash flow? I think largedly depends on tencent devidend and sell Tencent stcok.
I have to mention, when you get cash by selling stock, your NAV is damaged.
Luckily there is an discount, so when we get 15b cash by selling 2% tencent , our actually 'cost' is about 10b, and net profit is only 5b. I don't know whether you can understand this logic.
Tencent's dividend is about 0.5b per year, we earn 1.7b from selling stock (5b/3), so the yearly earning is 2.2b usd, lets treat it as 2b euros, so even prosus only have a market value of 100b, then the real PE would be 50
The EPS in report either 3.6 or 10 actually doesn't make sence, 3.6 come from the increase of tencent market value which fall back later and it has no relationship with the earning of prosus.
Even prosus sell all their tencent stake, it needs to pay tax , transaction fee and provide a large volumn discount, then to distribute the money to sharehold we gonna need to pay 20% to 25% tax as well, so even 1 prosus share corresponds to about 105 euros tencent share, but after all these deductions, the left over would be about 70euros.
But even this senario can't happen immediately, this will happen in the coming 50 years.
I am bullish on tencent, I believe it will grow further, but does prosus worth 50 pe when apple is only 30 pe . I think that is why this stock keep dropping, I would expect it will drop to below 40 euros, then it has about 20 pe.
Just think about the net profit of this company before you disagree with me, if you still doesn't agree with me then you are right.