SoftBank Group Corp (9984.T) Vision Fund is set to boost returns when it posts quarterly earnings due to a US listing of Chinese portfolio firms, such as regulatory scrutiny of such firms. Looks like clouds. Approach to the Japanese group.
The fund’s listed portfolio coincided with initial public offerings (IPOs) of ride-hailer Didi Global Inc (DIDI.N), “Uber for trucks” firm Full Truck Alliance Co Ltd (YMM.N) and edutech startup Zhangmen Education in April-June. gone up. Inc. (ZME.N).
Although widespread regulatory action in China’s technology and education sectors has scared investors away, billions of dollars have been wiped out of the value of Chinese firms listed in the US.
Shares of Didi fluctuated wildly over media reports related to regulation, while Tik-Tok owner ByteDance indefinitely postponed listing plans, the Wall Street Journal reported this month.
“SoftBank Vision Fund’s IPO is using Flywheel and four of the last six listings are Chinese, but this will fade as the reality of the China crackdown,” Redex Research analyst Kirk Boodry wrote in a client note.
SoftBank is investing through its second Vision Fund, which has $40 billion of committed capital from SoftBank itself, investing in earlier stages as well as late stages than usual, such as South Korean Travel. In the firm Yanolja.
The group reported a record $37 billion net profit in the fiscal year ended March, thanks in large part to a stake in South Korean e-tailer Coupang Inc.
SoftBank’s share price hit a two-decade high in March amid the group’s biggest share buyback ever. The buyback is complete, and the price has fallen by a third from that peak.
Citigroup analyst Mitsunobu Tsuro wrote in a note, “SBG has previously outlined its intention to address the extremely high risk of its investment portfolio in China, but we feel that rising global geopolitical tensions will now cause investment returns.” Ready to destroy it sooner than expected.”
When SoftBank reports on August 10, it will report a net loss of 175 billion yen ($1.60 billion) in the first quarter, according to the average of two analyst estimates compiled by Refinitiv. The technology investor considers asset price changes rather than profit as the primary indicator of performance.
($1 = 109.5200 yen)