By Sithembile Bopela, Chantal Marx, Pritu Makan, Zimele Mbanjwa, Motheo Tlhagale, Khumbulani Kunene
Canal + (CNP)
Canal+ is a global media and entertainment powerhouse, operating across more than 70 countries servicing over 42 million subscribers. The group's business model spans the entire audio-visual value chain, from content production (via StudioCanal) to aggregation, global distribution, and Direct-to-Consumer (DTC) streaming. Canal+ is a market leader in Europe and following the full takeover of MultiChoice Group in late 2025, Canal+ has solidified its position as the Pay-TV leader in Africa, complementing its expanding footprint in the Asia-Pacific.
In its recent 1Q26 trading update, the group reported 41% revenue growth to €2.2 billion, reflecting the inclusion of MultiChoice. The result was broadly flat (+1.8% y/y) on a like-for-like basis.
Indeed, the biggest risks facing the company remains the successful execution of the MultiChoice integration and turnaround of that business. Competition remains intense - particularly from well-capitalised global streaming players vying for broadband connected households.
The Canal + share price performance has been flat since listing on the JSE in June, and down about 5% year to date in London. The stock is trading on a forward PE of 8.9 times - a discount to peers as well as its average rating since listing in London in December 2024.
Naspers (NPN)
Naspers is a prominent multinational media group which has, over the last two decades, evolved from a traditional print media business in one country to a broad-based e-media company in multiple markets. Naspers' most notable investment is Prosus, which in turn has a large shareholding (23.2%) in Chinese internet giant, Tencent. Prosus is focused on e-commerce, food delivery, and classifieds. The company operates and invests in countries and markets with long-term growth potential.
Both Naspers and Prosus delivered a solid FY26 performance, which was cheered on by the market. The well guided for top-line development was driven by strong growth across key businesses, with a robust contribution from OLX and iFood, both of which delivered strong organic growth and meaningful margin expansion. The ecosystem overlap reinforced by the group's proprietary large commerce model (LCM) is yielding positive outcomes - iFood's AI assistant reached one million active users and Despegar's AI assistant is driving 3% of total sales. This remains supportive in driving demand across regions, and the momentum is expected to continue into the year ahead. Additionally, the improved profitability, coupled with higher dividends from Tencent, led to the strong double-digit growth in free cash flow and further solidified the robust liquidity position. The group's balance sheet is conservatively managed, remaining flexible and strong with more than $9.5 billion in cash on hand.
Naspers continues to offer good value at current values, and we expect a continued narrowing of their respective discounts as the companies buy back shares and unlock value from the unlisted investments.
Telkom SA SOC Limited (TKG)
Telkom is South Africa's largest integrated telecommunications and digital infrastructure provider. The group operates through three primary business units: Openserve, which owns and manages fixed-line and fibre network infrastructure; Telkom Consumer and Small Business, which provides mobile, fixed broadband, voice and digital services to consumers and small and medium-sized enterprises (SMEs); and BCX, which delivers information and communications technology (ICT), cloud, cybersecurity and digital solutions to enterprise and public-sector customers. Telkom presents a compelling investment case as a telecom operator that has successfully transitioned from a legacy fixed-line business into a data-led connectivity company with multiple growth engines.
Free cash flow represents perhaps the clearest evidence of Telkom's turnaround. Following negative free cash flow in FY22 and FY23, the group generated positive free cash flow from FY24 (R424 million) onwards, rising to R3.1 billion in FY26 from R2.8 billion in FY25 despite higher capex, while net debt fell 14.7%. This financial strength underpinned a revision to the dividend policy in FY26, with management increasing the payout ratio from 30% to 40%, to 40% to 60% of free cash flow. The combination of robust cash flow, low leverage and growing dividends provides scope for attractive shareholder returns while maintaining investment in mobile and fibre growth.
Valuation metrics seem compelling and supportive of our investment case. Telkom is currently trading at an attractive 2.7 times EV/EBITDA, a 48% discount to African Telecoms peers and a 9% discount to its own historical average. Moreover, consensus is bullish, with six of nine Bloomberg aggregated sell-side analysts holding a buy rating and price upside potential sitting at 25%. The forward dividend yield sits at ~5.5% and remains attractive relative to the sector median (~4%).
Clicks (CLS)
Clicks Group is a health and beauty focused retail and supply group. Through market-leading retail brands, Clicks, Sorbet, Claires and The Body Shop, the group has hundreds of stores across southern Africa. United Pharmaceutical Distributors (UPD) provides distribution capability for the group's healthcare strategy and has close to a third of market share in private pharmaceutical wholesale in South Africa.
For the half year ended 28 February, the group delivered a resilient performance despite a constrained consumer environment and operational disruptions, with profitability supported by steady revenue growth across both its retail and distribution businesses. Retail operations benefitted from continued momentum in pharmacy, health, beauty and personal care categories, driving market share gains, while the distribution division produced a particularly strong result, supported by increased wholesale activity and solid growth across its customer base. Looking ahead, management expects continued earnings growth, supported by ongoing store and pharmacy expansion, the rollout of new store formats, and sustained investment in enhancing its retail footprint, supply-chain capabilities and technology infrastructure. These initiatives are intended to strengthen operational efficiency, support future growth opportunities and advance the group's medium-term store network expansion strategy.
At a forward PE of 13.9 times, the share trades at an attractive level relative to its long-term valuation range (five- year average: 25 times) and track record of consistent performance. Clicks therefore remains one of our preferred exposures within the South African retail universe.
Bidcorp (BID)
Bidcorp is a market-leading food service product distributor across several geographies including the United Kingdom (UK), Europe, Middle East, South America, the Asia-Pacific region, and South Africa. The company's business units operate across the food and ingredient manufacturing sectors, such as catering, hospitality, leisure, baked products, poultry, meat, seafood, and processing. The strategy is to grow organically in existing regions and acquisitively in new ones, with improvements in the customer mix and value add opportunities providing further upside potential.
Consumer demand remains subdued as the cost-of-living crisis continues to impact spending in most countries, reflected in the group's slower-than-expected revenue development in the first four months of the 2026 calendar year. However, profitability was much better than what analysts had pencilled in. Europe and the UK performed well from a profitability perspective, partially offset by softness in Australasia and certain emerging markets, notably China and the Middle East, while strong performances were recorded in South Africa, Malaysia, and South America. Management expects to sustain its current growth trajectory through the end of the year and has allocated some of its excess cash to boost shareholder returns. Complimenting dividend payments with share buybacks over the last few months was also well received by the market.
Looking ahead, the company remains financially strong, with relatively low levels of gearing and a robust business model with solid diversification and defensive characteristics. Bidcorp is trading on a forward PE of 15.5 times, a discount to peers and below its long-term average rating. We maintain a favourable long-term view on the counter.
