From Stansberry Research:
In China, one app has completely changed people's lives in a few short years...
And it could very well become the world's largest company in the near future.
The app, WeChat, has a near-monopoly on screen time in the world's most populous country. Users can message their friends, make dinner reservations, and even order food and pay when they arrive at the restaurant.
All this is done through the WeChat app.
Tech giant Tencent (TCEHY) – owner of WeChat – is China's most important business and one of the fastest-growing companies in the world right now.
In fact, True Wealth editor Steve Sjuggerud calls it his "pick of the decade."
Tencent essentially "owns" people's screen time in China...
Whether users are messaging friends on the WeChat app, watching an NBA playoff, playing online video games, or making purchases, Tencent is No. 1 – and there isn't a No. 2. As Tencent moves toward monetizing WeChat, it could easily become the world's largest company.
Tencent is already worth about $439 billion today, making it the world's eighth-largest business. It's ahead of well-known companies like Johnson & Johnson (JNJ) and JPMorgan Chase (JPM).
But if you're interested in Tencent, don't get ahead of yourself... because today's Stock of the Week gives you a great chance to invest in this game-changer at an incredible discount.
The company we're talking about is a South African tech giant that owns dozens of high-tech businesses in media and e-commerce... But its most important asset may be its stake in Tencent.
Naspers (OTC: NPSNY) is one of the world's 100 largest stocks – with a market value of roughly $106 billion.
And the company currently owns $143 billion worth of Tencent shares.
So, with simple math, you can see that Naspers' stock sells at around a $37 billion discount to its stake in Tencent alone – and you get its dozens of other businesses for free.
And these businesses are incredibly profitable...
In 2018, Walmart (WMT) expressed interest in Naspers' 11% stake in Flipkart – the "Amazon of India." Walmart purchased its stake for $2.2 billion. Naspers made a profit of $1.6 billion on the deal. The company made a similar deal with part of its Tencent stake. Naspers sold a 2% stake in Tencent and made almost $10 billion in profit.
Naspers is also a world leader in online classifieds (businesses like Craigslist)... And it's quickly becoming a leader in food delivery with iFood, a mobile delivery platform in Latin America.
These businesses quickly build "ecosystems" that customers never want to leave. (We covered this idea in Stock of the Week earlier this month with CVS Health [CVS]).
Building an ecosystem gives Naspers more ways to generate profits.
But there is one problem... Naspers has outgrown the South African stock market.
The company now makes up roughly a quarter of the value of the main South Africa stock index. As Naspers keeps going up in price, fund managers in South Africa have to keep selling the stock so it doesn't get too much weight in their portfolios.
It's not that they want to sell their Naspers shares, but there are laws and regulations that prevent one position from having too large of a weighting in a portfolio.
So there are investors out there who want to purchase Naspers shares but can't.
Now, Naspers is moving to solve this problem. The company recently announced it will list its tech business in Europe instead of South Africa.
The new company, called Prosus, will list in the Netherlands later this year. It will hold Naspers' stake in Tencent, as well as Naspers' other tech businesses. Prosus will become Europe's largest consumer Internet company after the offering.
Better yet, it will make these businesses more accessible to investors around the world.
Prosus could even join the Euro STOXX 50 Index, which is like the European equivalent of the S&P 500 Index. Inclusion in the index could see millions of dollars from passive funds flow into Naspers shares.
The company said it could possibly see up to $3 billion in cash inflows.
Naspers' potential goes far beyond Tencent.
While it's already capitalizing on the rising mobile trend through its biggest leader – Tencent – the company is also investing in mobile technology in the world's fastest-growing markets through its other companies. This gives Naspers a great growth outlook.
Naspers shares fell almost 40% from their July 2018 high before bottoming in October... But since then, shares have been trending higher. During December's sell-off, the S&P 500 dropped 20%. Naspers shareholders only lost half that amount.
So far in 2019, Naspers shares have tacked on another 26%... and hit a new 12-month high in May.
Naspers is a great way to invest in one of the world's largest companies, at a steep discount. To sweeten the deal, the company also has dozens of strong businesses that you'd be getting for free.
Sometimes investing is simple.