SoftBank Group chairman and CEO Masayoshi Son (pictured) revealed plans to halt investments in China until the impact of new rules planned as part of a crackdown on tech companies in the nation becomes clear.
Son addressed concerns about its exposure in China during an earnings call, saying SoftBank could resume investments within two years, once there is greater clarity on the rules.
“We are not against or for the Chinese government, and we don’t have any doubt about future potential of China. But again, new rules and new regulations are beginning to be implemented, so until things get settled, we want to wait and see.”
Son noted SoftBank diversified its Vision Fund portfolio, with its Chinese exposure falling from 33 per cent of the fair-value to 23 per cent.
In terms of new investments made in fiscal Q1 2021 (ending 30 June), only 11 per cent are in China.
SoftBank recorded total gains on investments of JPY1.3 trillion ($11.7 billion) during the quarter, but net profit fell 39 per cent to JPY761.5 billion because the comparable period of fiscal 2020 included gains from a merger of US unit Sprint with T-Mobile US.
Revenue increased 15.6 per cent to JPY1.48 trillion.
Investment gains came despite declines in the share prices of key holdings, including taxi company Uber and e-commerce company Coupang. The rise comprised JPY741.5 from its own holdings; JPY288 billion in the two Vision Funds and other ventures; and JPY219.4 billion from the Latin America Fund.
During the quarter, the SoftBank Vision Fund 1 invested $2.1 billion, with 82 holdings and the second fund backed 47 companies, bringing its total to $20.2 billion in 91 ventures.
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