The matter is very simple. Naspers (South African newspaper Group), which is mainly engaged in Internet and media, is an investor in Tencent's early years, and has been traveling hand in hand with Big Goose for more than 20 years.

Prosus, a subsidiary spun off by Naspers in 2019, is listed in Amsterdam with a series of equity investments, including Tencent's shares. Prosus is also the largest Internet company in Europe.

Prosus recently announced that it would sell part of its 30.9% stake in Tencent, or 2%, so that its stake would be reduced from 30.9% to 28.9%.

As for the reasons for the sale, Prosus said it was to "increase financial flexibility to invest in other businesses and other shares held by the company", promised not to reduce its holdings for three years, and reiterated its fondness for Big Goose.

So it's not complicated, and I don't think it's a big deal, but in China, investors often feel very serious, and the shipment of major shareholders is just like the funeral of Lafayette, it's always a big deal, and there's even a hint of ominous-- do major shareholders know something I don't know, so they get a head start?

I have always opposed this attitude of conspiracy theory.

Through further research, we will find that Prosus-- as a financial investor-has always been a moderate role and attitude, and its gradual sale of some Tencent shares is reasonable.

1. 2018 reappearance?

As Naspers once reduced its holdings in 2018, many shareholders of Tencent were distracted when they saw Tencent's trend in 2018. Because after the last Naspers sale, Tencent's share price fell from 416 in March to 250 in November, down 40 per cent. So naturally, many investors are worried about whether shit's history will repeat itself, whether it will plummet, and whether I want to run.

Mark Twain once said that history may be repeated, but it will never be simply repeated.

Let's do an uncomplicated thinking experiment and ask a question-if Naspers didn't sell Tencent shares in 2018, would Tencent still lose 40% of its share price?

I think there's a good chance.

Because what Tencent faces in 2018 is not only the reduction of major shareholders, but also the repair of various external pressures and self-valuation. 2018 is a disaster year for all Chinese-listed stocks, with a continuous fermentation of sweaters outside and a variety of structural deleveraging (equity pledge thunder, P2P thunder) on the macro side; on the micro side, Tencent suffered the suspension of the version number, the impact of the headlines, and so on.

The most important reason is a period of repair from a high valuation to a reasonable valuation-from about 60 times the PE repair to less than 40 times, completing a wave of bubble squeezing. And 2018 for Tencent is a painful year of transformation, so there is also the so-called 930 reform, began to make efforts to the industry of the Internet, there is now a gorgeous Mao goose.

What is the PE of Tencent and TTM at this time in 2021? -- 30 times.

What is the forward price / earnings ratio of Forward in 2022? -- 25 times.

And the Q4 financial report just past also reflects the goose: 1. The performance of the game is very wide; 2. Advertising business exceeded expectations; 3. Mini Program business ecology is further consolidated; all the indicators of the goose factory are good. I'm not sure there will be no black swans or gray rhinos in 2021, but it's a little too insulting for you to copy it in 2018.

If you can intercept what has happened in history and then translate it over to thoroughly guide your investment behavior, then investing is really too easy. Or to say the least, everything else remains the same. There must be a completely different variable between 2021 and 2018-is it right that the king is gone? In the time series data, the change of this essential variable will make the translation comparison of the data between different time axes completely lose the brilliance of reason.

2. What kind of role is Prosus?

Over the past two decades, Naspers has earned 7800 times and almost 1.6 trillion yuan on Tencent's investment. This kind of earning method is unprecedented, it is hard to say whether there are any visitors behind, but you must be able to count them with one hand.

Many people say that Naspers is just lucky to step on dog shit luck. When saying this, I should also say @ Softbank Corp. 's old grandson. But I personally do not quite agree with this view.

There are also many domestic investors who will question Prosus's attitude towards Tencent, especially with regard to foreign investment, and always beware of foreign investment, wondering whether they want to build our excellent enterprises, ah, or even whether foreign investors want to control goose factories, and so on.

But obviously these are whimsical.

Because in many dimensions, Naspers is an excellent financial investor-visionary, confident, loyal, patient, restrained, trustworthy, and insisting on being a passive and reliable financial investor.

This is the kind of investor that all great companies want most, the kind of reliable investor who can accompany the company's through thick and thin. The regular reduction of Prosus holdings also shows that they have no intention of controlling and meddling in the company, but just feel at ease to make financial investments and get long-term returns on financial investments. They have no strategic ambition, only financial perseverance.

Major shareholders have made a lot of money on this investment, and most people only see the reduction of their holdings, but they do not see that they have been holding on for 20 years, practicing long-term doctrine with practical actions and being friends for time.

Ma Huateng himself loves this friend very much. he once said: "Tencent's major shareholder only sold a little a few days ago and immediately promised that he would not sell again for three years. Such shareholders are very difficult to find. "

In the case of long-term holding of Prosus, use the way of slow reduction to get yourself some cash flow, which is also conducive to Tencent's market value stability and long-term development, but also conducive to the further diversification of chips and the further diversification of shareholders.

Mainland funds have been increasing Tencent's holdings, just in time to pick up some plates; aren't we always clamoring to seize the pricing power of the goose factory? now other people are shouting prices, you grab it.

However, if we look at the performance of Tencent's stock price today, we do have a sense that we are going to grab the pricing power.

3. Why did Prosus reduce its holdings? Did you realize the secret that Tencent was overrated before he sold it?

In the official tone, the reduction is a consideration of the major shareholders' own cash flow and market capitalization management.

Is this an excuse for evasion? Actually, it's not. As an Internet company, Prosus really lacks cash flow. Prosus now has a market capitalization of more than $170 billion.

But we looked through his financial report and found that as of 9: 30 last year, the cash on the account was only $3.6 billion, and its total operating cash flow was only $386 million-- excluding Tencent's dividend of more than 400 million, the operating cash flow was negative; in other words, this is a company that cannot make blood on its own.

It can be seen that Prosus is indeed not well-off, especially in terms of its own hematopoiesis. After a year of hard work, the income is far less than Tencent's share price for a year.

It is because Tencent's investment is so successful that if he wants some "decent" cash, Prosus naturally thinks of Tencent's big milk goose. Many friends say that they don't smell good when they take Tencent's dividend, but Tencent's current dividend yield is only more than 0%, and the dividend rate is not high.

So you can also think of Prosus selling as a "homemade dividend" (Homemade dividends), selling shares, which is equivalent to a dividend of 6% for three years. I think this dividend request is reasonable.

The "self-made dividend" of selling shares and the dividend of the company itself are theoretically equivalent without taking into account taxes.

4. Conclusion

Great investments are seen in the rearview mirror to show their greatness; most of the time, buying a good company and holding it for a long time is easy to say, but especially difficult to operate.

On the road of shareholding, there is too much noise and noise everywhere. I am very opposed to choosing the time according to the noise and noise to carry out the so-called opportunity to build a warehouse and escape from the top.

The following case is Peter Lynch talking about his investment philosophy many times, and I have been using it to encourage myself. And I think it's quite appropriate to use it at this moment.

"I've said that before, but let me give you another example of the actual performance of the stock market from 1965 to 1995, with both good and bad years. imagine that during those 30 years, there were three investors who invested $1000 a year in the stock market.

Investor 1, very unlucky, somehow he bought stocks on the most expensive day of the year.

Investor 2, very lucky, bought stocks on the cheapest day of the year.

Investor 3 has a system. She always buys stocks on January 1st of every year, no matter what day it is.

You would think that investor 2's unique grasp of market timing will end up being richer than Wall Street's unluckiest investor 1 and better than investor 3.

But the truth is, over the past 30 years, their returns have been strikingly similar. Investor 1 earns 10.6% a year, investor 2 earns 11.7%, and investor 3 earns 11% a year. Even I am surprised that the perfect timing year after year is only 1.1% more than the worst year after year. "

Refuse timing, hold it for a long time, and time will iron out all the noise.