Naspers wins and Remgro loses

Naspers has the best media sentiment ranking in South Africa, followed by Richemont and African Rainbow Capital Investments (ARC). Remgro finished last and has a serious problem.

Trust is critical for investment holding companies because it is crucial to building and maintaining successful stakeholder relationships.

A holding company owns and controls its subsidiaries’ shares or interests, making stakeholder trust very important.

Unless its stakeholders feel positive towards the holding company, it will struggle with investor confidence, subsidiary relationships, and attracting talent.

A big trading discount is one of the easiest ways to identify a lack of trust in a holding company and its management.

A trading discount is where the holding company’s market cap is less than the sum of its net assets’ market values.

Remgro is a good example. Over the last seven years, its discount to intrinsic net asset value has increased from 15% to 46%.

Many analysts, including Shane Watkins from All Weather Capital, blamed Remgro’s management for its poor share price performance.

Naspers also had a big challenge with a large trading discount, which ended after former CEO Bob van Dijk departed in September 2023.

Since Van Dijk’s departure, in combination with Naspers and Prosus’ share buyback programme, the trading discount has been reduced significantly.

Media reports about the two companies clearly show a negative sentiment towards Remgro and a positive sentiment towards Naspers.

Press Pulse’s latest media sentiment report showed that Naspers had a positive sentiment report of 26 and Remgro had a negative sentiment report of 24.

Press Pulse is an artificial intelligence sentiment-measuring system for online media reports.

The system focuses on South African business reporting from top-tier publications and measures companies’ success in achieving positive exposure.

The sentiment ranking is based on the number of positive, neutral, or negative articles and the reach and influence of the publication where they are published.

Simply put, the more positive articles a company receives, the better its sentiment ranking. The inverse also holds.

Over the last 30 days, online business publications in South Africa published 27 positive articles and 1 negative article about Naspers.

Remgro, in comparison, had 4 positive articles and 16 negative articles. It clearly shows that the company has a reputational problem that it needs to address.

The table and chart below provide an overview of Naspers, Richemont, African Rainbow Capital Investments (ARC), and Remgro’s media sentiment scores.