HomeMarket OverviewNew Investment Idea - Prosus

New Investment Idea - Prosus

21-08-2024
New Investment Idea - Prosus

START - R674.53 | FINISH - R809.44

a. HORIZON: 3 months

b. FROM 22-8-2024 | UNTIL 22-11-2024

c. MANAGEMENT ASSESSMENT: 20% growth

d. RECOMMENDATION: BUY

TRADING PLAN

Buy Prosus (PRX) shares from the R674.53 level with a target of R809.44 for 3 months.

WHY THESE SHARES HAVE POTENTIAL FOR PROFIT

a. Prosus owns 24.99% of Tencent, providing investors with valuable exposure to a dominant player in China's technology sector and access to a diversified high-growth portfolio that includes gaming, social media, fintech and cloud services.

b. Prosus' core headline earnings per share (EPS) are forecasted to increase 91% to 98%, driven by strong profitability in its e-commerce businesses. 

c. Newly appointed CEO Fabricio Bloisi personally bought R81.3 million worth of Prosus shares. While the stake is relatively small compared to the company's size, this move is a vote of confidence in Prosus' future and an encouraging sign for potential investors.

INDICATORS

a. Forward P/E ratio – 12.69x

b. Dividend yield – 0.21%

c. The company’s balance sheet metrics are strong:

i.PRX has total assets of R1.17T  

ii.Total equity of R785.786B

iii.Total liabilities R361.379B

GROWTH FORECAST

1 Year EPS: 17.6%

1 Year Revenue: 11.8%

RISKS

a. Heavy Reliance on Tencent: A significant portion of Prosus' value is derived from its stake in Tencent. Any negative developments in Tencent could significantly impact Prosus' share price.

b. Early-Stage Investments: A portion of Prosus' portfolio consists of early-stage companies with unproven business models, which carries higher investment risk.

Disclaimer: 

Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorized financial services provider FSP No. 51404.   

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