Home » Earnings down 40%. Softbank suspends investments in China

Earnings down 40%. Softbank suspends investments in China

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The Chinese squeeze on big tech is being felt on Softbank’s accounts. Between April and June, the net result of the Tokyo-based multinational financial holding, founded in 1981 by the Korean-born entrepreneur and billionaire investor Masayoshi Son, fell by 39.4% to 761 billion yen, the equivalent of 5 , 8 billion euros, while the turnover grew by 15.6% to 1,480 billion yen. No results forecasts have been released for the full fiscal year, as is the practice. On the other hand, the profits made with the help of the Vision Fund, managed jointly with the government of Saudi Arabia, almost doubled to 235.5 billion yen (1.8 billion euros), thanks to the stakes in the Chinese Didi Global and the US food ordering and delivery platform DoorDash, whose valuations, before the Chinese government heavily intervened on the New York listing of the shared mobility company, jumped up (then they lost 33%).

The South Korean e-commerce group Coupang, on the other hand, did less well after landing on the stock market in March. The latter had been the driving force behind record profits in the last fiscal year. The Japanese conglomerate sold an approximately $ 2 billion stake in Uber Technologies in January, but remains the largest shareholder in the California-based private auto transportation service.

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Returning to the Chinese issue, SoftBank Group has announced that it will suspend its investments in China pending regulatory actions against the country’s technology companies, said Masayoshi Son. “Until the situation is clearer, we want to wait and see,” said the company’s number one. “In a year or two I believe that new rules will create a new situation.” SoftBank’s investments in China represent about a quarter of its fund portfolio and include a 24.9% stake in Alibaba (-14% the stock on Wall Street since the beginning of the year), equal to 133 billion dollars, 30 billions more than SoftBank’s capitalization. However, “our overall view is unchanged: China still remains a major growing economic opportunity,” said Navneet Govil, chief financial officer of the Vision Fund.

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The weakness of the share price of the Japanese holding (the trend has been negative since the beginning of the year by almost 15%) and market speculations have fueled the expectation of an imminent buyback. “So far we have sold assets and announced a buyback. Nothing like that will happen this time, ”Son commented. And given the distance between the group’s share price and the value of its assets, he added: “I guess we’ll do the buyback sooner or later. Times and dimensions are elements that we consider every day ».

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