SoftBank CEO Masayoshi Son put a lot of emphasis on China. Now he’s backing down

by



[ad_1]

The Japanese billionaire said in a presentation of his results on Tuesday that he would take a cautious approach until the impact of the new regulations is clear.

Chinese companies accounted for 23% of SoftBank Vision Fund’s massive investment portfolio at the end of July. But only 11% of Vision Fund investments have been directed to the country since April, Son said.

“It’s because we would like to wait and see a bit,” he added.

Answer questions from journalists, Son admitted that the company “faces difficult investment challenges in China.”

“It’s true,” he said. “This is something that we would like to watch out for and be careful about. Once we get a better view, we would like to resume. [further] investments. “

China's largest private companies are in chaos. It's all part of Beijing's plan
In recent months, China has embarked on a major crackdown on private enterprise, which has engulfed some of the country’s major players. Initially, it appeared that the main target for regulators was the booming tech sector, but lately it has spread to other industries, such as private education.
Investors were shocked. So far, events have wiped out more than $ 1.2 trillion in market value and stoked fears about the future of innovation in the world’s second-largest economy. Son said he was concerned about the impact of regulation on stock markets.
SoftBank (SFTBF), one of the world’s largest tech investors, owns stakes in several large Chinese companies, including e-commerce Titan Ali Baba (BABA), the giant Didi and the owner of TikTok ByteDance.
Didi has been in particular pain lately, with an initial public offering in the United States that deteriorated after Beijing launched an investigation into the company and banned it from Chinese app stores.
China is cracking down on data privacy. This is terrible news for some of its biggest tech companies

Son did not specifically comment on Didi during the presentation, but said he still had “good expectations” of SoftBank’s portfolio companies in China.

He reiterated that the company wanted to “wait and see how things go” as the regulations continued to unfold, adding that there was no specific timeframe for how long they planned to adopt the regulation. approach.

“Is it six months, 12 months? I don’t know yet,” the executive said.

“[But] in a year or two, with the new rules, and with new orders, I think things will be much clearer … Once things are clearer, we will be open to the resumption of active investment. “

Son’s remarks came as SoftBank posted an almost 40% drop in profits on Tuesday. Net profit fell to 761.5 billion yen ($ 6.9 billion) in the quarter ended in June compared to the same period a year ago.
The company largely attributed this to a large one-time gain it achieved last year from the merger of Sprint (S) – which Son bought in 2013 – and T Mobile (TMUS).

Despite the crackdown, Son said he remains optimistic about China for the long term.

“There are still risks there, like the risks in China. But we want to take risks,” he said. “We are neither against nor for the Chinese government, and we have no doubts about [the] China’s future potential. “

– Laura He contributed to this report.

[ad_2]

Source link