Naspers Ltd. (NPN), Africa’s biggest media group, retreated the most in more than a week after Chinese associate Tencent Holdings Ltd. (700) missed analysts’ profit estimates and said a slowing economy is affecting advertising.
Naspers fell 1.7 percent to 544.98 rand by the close in Johannesburg, paring an earlier 3.7 percent decline. Shares in Tencent, of which Naspers owns 34 percent, slumped 7 percent in Hong Kong, the most in more than a year.
Net income climbed to 3.22 billion yuan ($517 million) in the third quarter from 2.45 billion yuan a year earlier, Tencent said in a statement yesterday. That fell short of the 3.33 billion-yuan average of eight analysts’ estimates compiled by Bloomberg. China’s decelerating economy “may slow revenue growth rates for the online advertising industry as a whole,” the games and social networks operator said.
Trading at 28 times estimated earnings, Tencent “is priced for high growth,” Simon Fillmore, an analyst at Independent Securities (Pty) Ltd., said by phone.
“When the growth isn’t quite what people expected, you’ll see the stock comes off sharply,” Fillmore said. “It’s a quarterly number so you can’t read too much into it. It’s a great business.”
Naspers earns 42 percent of sales from its pay television business and 20 percent from its investment in Tencent. Its stake in Tencent is valued at $20 billion, 81 percent of its market value of 221 billion rand ($24.8 billion) based on today’s share prices.
Naspers’ 30-day historical volatility, a measure of stock swings, increased to 19.23 from 18.64 yesterday. The FTSE/JSE Africa All Share Index’s 30-day volatility measure was at 9.04 versus 9.17 previously. A higher reading means an asset’s price can have bigger moves. About 1.6 million shares traded, almost 1.5 times the daily average over the past three months.
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