[Epoch Times November 13, 2021](Hong Kong Epoch Times reporter Li Siqi comprehensive report) Venture capital firm SoftBank Group Corp announced its results for the second quarter (April to September) on November 8. : Its Vision Fund lost a total of 879.2 billion yen (approximately US$7.96 billion), resulting in a deficit of 395.2 billion yen (approximately US$3.58 billion) in investment income, a decrease of 2.4285 billion yen (approximately US$21.98 billion) compared to the same period last year ). Chinese media said it was the biggest “victim” of the severe setbacks of Chinese Internet giants.
On November 8th, at the second quarter performance network briefing meeting of SoftBank Group, the founder and chairman Masayoshi Son briefly reviewed the brilliant performance of SoftBank Group in the past few fiscal quarters before announcing the investment loss, and then showed The video is a severe blizzard-symbolizing the plummeting performance of the second quarter, SoftBank’s situation is like being in a winter blizzard.
The Net Asset Value of SoftBank Group dropped from US$244 billion on June 30 this year to US$187 billion on September 30. Among them, Alibaba Group’s share of net asset value dropped from 59% on September 30, 2020 to 28% in one year. The decrease in the proportion was due to the decline in its share price. The Vision Fund now accounts for the largest share of net asset value, which has increased to 44% from 16% a year ago.
When talking about the assets of SoftBank Group in China, Sun Zhengyi not only named Alibaba Group’s share price, but also named Didi Chuxing Technology Co., Ltd. (“Didi Chuxing”) for its market value plummet in the past three months. As a result, the ratio of assets in China to the value of net assets was reduced to 36% on September 30. The stock of Coupang (NYSE: CPNG), a South Korean e-commerce company invested by SoftBank, plummeted, which is also one of the reasons for SoftBank’s huge losses.
As far as the Vision Fund is concerned, the value of assets in China has fallen from 1,476.8 billion yen (approximately USD 13.43 billion) to 132.1 billion yen (approximately USD 1.2 billion) in the past three months. Currently, the Vision Fund’s investments in China and the United States account for 19% and 35% respectively, and investments in other regions of the world account for 46%.
Both Alibaba and Didi Chuxing’s market capitalization fell due to the Beijing authorities’ supervision of Internet technology giants. In addition, the downturn in China’s education industry and real estate market is directly related to Beijing’s policy shift. However, during the Q&A period of the briefing, Sun Zhengyi said that he would continue to invest in the Chinese market.
Sun Zhengyi believes that although SoftBank has suffered huge losses in the Chinese market in the past three months, the risks are still manageable. In the investment, factors such as regions and industries will be considered to minimize risks. Japanese companies are generally small in scale, and it is not easy to find a suitable unicorn company for investment. They have already invested in one and will continue to look for opportunities.
The so-called unicorns refer to start-ups with a valuation of more than $1 billion. The unicorn is a rare animal in Greek mythology. The unicorn company hopes that such start-ups are quite rare in the investment market.
The Vision Fund has invested in 368 companies. According to the information on the Vision Fund website, in addition to Didi Chuxing (NYSE: DIDI) and Didi Autonomous (DIDI Autonomous), the Chinese unicorns selected by Sun Zhengyi include ByteDance and Man Bang (NYSE). : YMM), Homework Help, Master Education (NYSE: ZME), Dingdong Shopping, Shell Search for Housing (NYSE: BEKE), ZhongAn Insurance (06060.HK) and Jingdong Logistics (02618.HK), etc.
According to a report from Sina Finance, the newly released financial report of Shell Search shows that from July to September this year, a net loss of 1.766 billion yuan (approximately 274 million U.S. dollars). Due to the tightening of financing conditions in China’s real estate sector, some real estate developers are experiencing liquidity shortages. China’s property market is gradually cooling down, and housing search is naturally also affected. The report also showed that the net income of second-hand housing transaction services from July to September was 6.1 billion yuan (approximately US$900 million), compared with 8.8 billion yuan (approximately US$1.4 billion) in the same period last year.
At the performance meeting, Sun Zhengyi also announced that he would repurchase 1 trillion yen of the company’s stock. The planned acquisition period is from November 9 this year to November 8 next year. At present, the value of SoftBank’s stock is lower than the actual value of net assets, and Sun Zhengyi plans to increase shareholder returns through repurchase.
Chinese media reported that China’s Internet giants suffered a severe setback. Unexpectedly, the biggest “victim” was Japan’s SoftBank Group. But SoftBank invested more than US$20 million in Alibaba in 2008, and reportedly rose to US$55 billion when Alibaba went public in 2014. In several reductions between 2016 and 2020, SoftBank Group has cashed out more than 28 billion U.S. dollars.
With huge losses today, Sun Zhengyi still insists on investing in the Chinese market, or wants to dig out a second former Alibaba. On the 10th of this month, China’s Gaoxian Robot announced the completion of the third round of financing of 1.2 billion yuan, and the Vision Fund is one of the lead investors. @
Editor in charge: Shao Yi
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