Investors looking to tap into China’s AI market may consider South African holding company Naspers (OTC: NPSNY), which owns a 43% stake in Prosus (OTC: PROSY), the largest shareholder of Tencent (OTC: TCEHY). Tencent, with over 1.4 billion users on its WeChat platform, is a major player in China’s AI landscape and video game publishing. Naspers was among the early investors in Tencent, turning its original investment into hundreds of billions.
Naspers trades at a significant discount, roughly 36%, to its asset value, mainly driven by its stake in Prosus. Prosus has recently become free cash flow positive for the first time in fiscal 2025, generating $36 million, marking a shift from reliance on Tencent dividends. Recent leadership changes at Prosus may indicate better management efficiency moving forward.
This investment approach could allow exposure to Chinese AI while minimizing direct market risks associated with investing in Chinese stocks. Given that Naspers has previously benefited from Tencent’s growth, its current valuation may present a unique opportunity as it repositions itself for future profitability.
