JOHANNESBURG China's massive but increasingly competitive Internet market was the main driver of 15 percent first-half earnings growth for Naspers, prompting questions over how long the company can keep growing at such speed.
From its origins as a newspaper publisher in apartheid South Africa, Cape Town-based Naspers has morphed into a global multimedia business acquiring stakes in emerging-market Internet companies including China's Tencent.
Naspers' shares have risen over 50 percent this year, boosting its market capitalisation to $25 billion (15 billion pounds) and making it more valuable than better known media firms such as Britain's Pearson Plc and Thomson Reuters.
But much of the growth has been driven by its 34 percent stake in Tencent, and some analysts say the company has become too reliant on China to fatten its bottom line - and too expensive.
"It's a wonderful business, very well run but you are effectively investing in Chinese internet stock Tencent by buying Naspers," said Nic Norman-Smith, chief investment officer at Lentus Asset Management in Johannesburg.
"We think that market is a little bit competitive and the barriers to entry for Internet companies are generally relatively quite low, so there is a chance that a big competitor comes out and puts Tencent under pressure."
Tencent contributed the vast majority of Naspers' earnings, delivering 2.99 billion rand ($338 million) of the total 4.1 billion rand of core headline earnings, or earnings before one-time items.
Naspers is trading at a price-to-earnings ratio of 70 times, the tenth most expensive stock among 220 global media companies tracked by Thomson Reuters.
However, some remain positive on Tencent.
"There are a lot of new growth initiatives that will probably play out in the next 12-24 months, be it in mobile, or advertising. It's coming pipeline is the strongest it has ever been in the history of Tencent," said one Johannesburg-based analyst who declined to be identified.
"(Naspers) can give you 30 percent growth for the next two to three years once you are out of the development spend cycle," he said.
The company said it spent $530 million investing in new e-commerce businesses including Netretail, an on-line retailer with operations in Eastern Europe.
Management has in the past said it was finding fewer acquisition opportunities because valuations for new purchases were becoming expensive.
The company spent 45 percent more on development, rising to 1.6 billion rand in past six months and Chief Executive Koos Bekker said he would be spending a similar amount in the second half.
"We'll look at acquisitions and if it makes sense we may still buy companies, but the emphasis is more on organic growth now than it is on buying something," he told Reuters.
Naspers is rolling out infrastructure for digital terrestrial television that will make pay television affordable to even more people in Africa, where it is in 6 million homes.
Total revenue climbed 22 percent to 23 billion rand ($2.60 billion) after Internet revenue rose 70 percent to 14.1 billion rand. The pay television segment grew 19 percent, contributing 14.4 billion rand to revenue.
Core headline earnings came in at 1,062 cents per share in the six months to end-September, up from 921 cents a year earlier.
It had flagged this month that underlying profit would rise by between 10 to 20 percent. Core headline profit, which Naspers says is its main earnings measure, excludes one-time items.
One-time items included a 1.5 billion rand ($170 million) profit from the sale of some Facebook shares by Russian affiliate Mail.ru. Naspers owns 29 percent in Mail.ru
Naspers' shares were down 0.4 percent to 538 rand at 1300 GMT, compared with a 0.18 percent rise by the Top-40 index. ($1 = 8.8511 South African rand)
(Editing by David Dolan and Andrew Callus)