Tech giant Tencent's investor, Prosus, is soaring high with a surge in profits. But is this success solely Tencent's doing?
Prosus, the largest shareholder of Tencent Holdings, has revealed a significant boost in net profit for the first half of its fiscal year, primarily attributed to its strategic investment in Tencent and a partial stake sale. In a recent announcement, the Amsterdam-listed tech investor reported a net profit of $5.63 billion for the six months ending Sept. 30, up from $4.59 billion in the previous year. This figure, however, fell slightly short of analysts' consensus estimate of $6.11 billion, as per Visible Alpha.
The company's success can be attributed to several factors. Firstly, Tencent's improved profitability played a pivotal role, along with the robust performance of Prosus' e-commerce ventures. Secondly, Prosus' decision to reduce its Tencent stake by 1% resulted in a substantial $3.3 billion gain, showcasing the company's astute financial management. As of Friday's close, Prosus' stake in Tencent was valued at an impressive $163.5 billion.
Prosus' revenue also experienced a notable increase, rising to $3.62 billion from $2.96 billion, surpassing analysts' expectations of $3.59 billion. This growth was fueled by the rapid expansion of its e-commerce businesses, with iFood in Latin America, OLX in Europe, and PayU in India leading the charge.
Moreover, Prosus' adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations in its e-commerce segment skyrocketed by 70% to $530 million, underscoring the segment's impressive performance.
Despite these positive developments, Prosus remains cautious and maintains its fiscal 2026 guidance, excluding the recently acquired Just Eat Takeaway. The guidance includes e-commerce revenue projections of $7.3 billion to $7.5 billion and adjusted EBITDA estimates of $1.1 billion to $1.2 billion.
But here's where it gets controversial: Is Prosus' success solely reliant on Tencent's performance, or does the tech investor have a sustainable strategy for the long term? Share your thoughts and join the discussion on whether Prosus can maintain its growth trajectory without Tencent's stellar results.
