China’s IPO boosts SoftBank’s first-quarter results; Reuters’ prospects for cracking down on the cloud

Sam Nasi

Tokyo (Reuters)-As Chinese portfolio companies are listed in the United States, SoftBank Group will announce the return of the Vision Fund when it announces quarterly earnings, because the regulatory review of these companies casts a shadow over the prospects of the Japanese conglomerate .

The fund’s listed investment portfolio followed the initial public offerings of ride-hailing service Didi Global, “Uber (NYSE:) Trucks” company Full Truck Alliance Co Ltd, and education technology startup Zhangmen Education Company from April to June. (IPO) and swell.

However, extensive regulatory actions in China’s technology and education industries have frightened investors, evaporating billions of dollars in the value of Chinese companies listed in the United States.

According to the Wall Street Journal this month, Didi’s share price fluctuates sharply due to regulatory-related media reports, and Douyin’s parent company Bytedance has postponed its listing plan indefinitely.

Redex Research analyst Kirk Boodry wrote in a client report: “SoftBank has been promoting the Vision Fund’s IPO flywheel. Four of the past six listings were Chinese, but as China suppressed With the deepening of reality, this situation will gradually disappear.”

SoftBank is investing through its second Vision Fund, which has US$40 billion in committed capital from SoftBank itself, to invest in early and late stages, such as the investment in Yanolja, a South Korean travel company.

The group reported that its net profit for the fiscal year ending in March reached a record 37 billion U.S. dollars, largely due to the huge gains from holding shares in South Korean electronics retailer Coupang Inc..

In the group’s largest share repurchase in history, SoftBank’s share price hit a two-year high in March’s gains. The repurchase has been completed, and the price has fallen by a third from that peak.

“SBG had previously outlined its intention to address the issue of its portfolio’s excessive exposure to China, but we believe that global geopolitical tensions now appear to worsen investment returns faster than expected,” Citigroup (NYSE:) analyst Mitsunobu Tsuruo wrote in a report.

According to the average estimate of two analysts compiled by Refinitiv, SoftBank may record a net loss of 175 billion yen ($1.6 billion) in the first quarter when it releases its report on August 10. Technical investors regard changes in asset value rather than profit as the main indicator of performance.

(1 USD = 109.5200 yen)