On August 10, Japan’s SoftBank Group released its consolidated financial report for the first quarter (April to June) of the current fiscal year.
According to the financial report, SoftBank Group’s net sales in the first quarter of this fiscal year were 1.48 trillion yen (approximately US$13.4 billion), an increase of 15.6% year-on-year; net profit was 761.51 billion yen (approximately US$6.9 billion), compared with the previous quarter. It was a 61% drop and a year-on-year drop of 39.4%.
The SoftBank Vision Fund’s profit in the first quarter of this fiscal year was 235.55 billion yen (approximately US$2.14 billion), a 90% decrease from the previous quarter and a 3% year-on-year decrease. SoftBank said that the decline in the share prices of South Korean e-commerce company Coupang and other investment companies has dragged down the fund’s performance.
Three months ago, SoftBank reaped 4.99 trillion yen in net profit attributable to its parent in the 2020 fiscal year, surpassing Microsoft Group and becoming the world‘s third-largest profitable company after Apple and Saudi Aramco.
At that time, SoftBank executives pointed out that the Vision Fund would further invest in companies listed in New York such as Didi and Uber for trucks. However, when the financial report was released, SoftBank Group suspended its investment. SoftBank said in its financial report that there was no good IPO project in the first quarter of fiscal 2021, which also resulted in lower investment returns.
One obvious move was that SoftBank sold billions of shares of US technology companies.
SoftBank established the SB Northstar division last summer, mainly through its investment in technology companies. As of the end of June, the division held a total of $13.6 billion in company shares, down from $19 billion in shares at the end of March. In March, SoftBank held $3.1 billion in Facebook stock, $1 billion in Microsoft stock, $575 million in Alphabet stock, and $382 million in Netflix stock through the SB Northstar division. But in the latest report, none of these four companies are listed.
In addition, the financial report shows that SoftBank’s stake in Amazon has been reduced from US$6.2 billion to US$5.6 billion.
In China, SoftBank announced the suspension of new investments.
In fact, SoftBank’s investment in China has begun to decelerate this year. As of the end of July, the proportion of Chinese companies in SoftBank’s existing investment portfolio fell to 23%, down from the previous figure of about 30%. Since April, only 11% of SoftBank’s new investment has been invested in China. At present, the Vision Fund has invested in new companies listed in the United States such as Didi, Manbang, JD Logistics, Head of Education, Dingdong Maicai, etc.
The slowdown in SoftBank’s investment in China is related to China’s enhanced review of listed companies in the United States.
As China has recently strengthened the supervision of listed companies in the United States, Didi, Manbang Group and other listed companies in the United States have been scrutinized one after another. A number of Chinese companies such as Himalaya and KEEP have also cancelled their IPOs in the United States. The education and training industry’s “double reduction” policy has been implemented, in which discipline training institutions are not allowed to be listed, capitalization operations are strictly prohibited and other regulations have brought a blow to the education industry, and the affected Chinese concept stocks such as New Oriental and Good Future have fallen sharply. .
Softbank CEO Sun Zhengyi said that after seeing the introduction of many new regulations in China, he hopes to wait for a while before making plans for the impact on the market after the regulations are promulgated. He also said that he still has good expectations for the investment projects in China.
As SoftBank’s most profitable investment, Alibaba’s stock price has not performed well. Since November 2020, Alibaba’s stock price has nearly halved.
Softbank Group held 31.6 trillion yen in equity at the end of the first quarter. Among them, Alibaba is still the largest investment held by Softbank Group by market value. As of June, the 110 billion US dollars in Alibaba shares held by SoftBank accounted for about 47% of its net asset value.
Navneet Govil, Chief Financial Officer of the Vision Fund, said that the current market environment has affected the return expectations of the Vision Fund, but the team’s overall view of China remains unchanged: “China still has huge, growing and compelling economic opportunities. “
On the evening of August 11, SoftBank China Capital (SBCVC), a Chinese subsidiary of SoftBank, issued a statement stating that it would not comment on Japan’s SoftBank Group’s investment strategy in China and will continue to invest in excellent high-tech, high-growth investment in China. Sex enterprise. But then the statement was deleted.Return to Sohu to see more
Editor:
Disclaimer: The opinions of this article only represent the author himself. Sohu is an information publishing platform. Sohu only provides information storage space services.
.