Japan’s SoftBank Group reported a fall in quarterly net income on Tuesday due to a loss in valuation of nine of its investments, particularly in South Korean e-commerce firm Coupang.
SoftBank Group said it recorded a valuation loss of JPY700.46bn ($6.3bn) in nine companies, with Coupang contributing nearly 70% of the realised loss in valuation.
The company said net income for the June quarter fell 29% compared to a year ago, to JPY932.49bn.
Vison Fund sees rise in income
The Masayoshi Son-led investment firm said its unit Vision Fund's segment income before income tax rose 82% to JPY235.55bn from a year ago, helped by listing gains in ride hailer Didi Global and commercial freight platform Full Truck Alliance.
“Valuation gain (net) totaling $1,808 million for listed portfolio companies was recorded due to the strong share price performances of DiDi and Full Truck Alliance, which were listed in the first quarter, and DoorDash,” SoftBank Group said in its quarterly results.
The company added that it realised a gain on investment of JPY310bn on partial sale of shares in DoorDash, Uber and Guardant Health.
However, investors will be wary of SoftBank’s exposure to China-based companies going forward, after Beijing turned up the heat in its regulatory crackdown on China’s private sector.
Alibaba Group, the company’s largest asset, has slumped over 27% in the last six months. Recent media reports suggested that Didi Global is planning to delist in order to pacify Chinese authorities, after losing over 30% since its New York listing.
Losses of JPY109.66bn in connection with prepaid forward contracts using Alibaba shares were recorded in the quarter, the company said.