Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Softbank released its 2Q earnings yesterday with a bounce back to profitability thanks to strong gains by global stock markets. We would direct readers to Kirk Boodry’s analysis of the details <a href="https://www.smartkarma.com/insights/softbank-group-q2-20-results-vision-fund-luster-tarnished-by-derivative-losses" target="_blank" rel="noopener">here</a>, but what we would focus on is the question that Masayoshi tried, and in our opinion failed, to address.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/170/512/original/image_30076723321604989772377.png?1604989774" class="editor-image img-responsive" data-smartkarma-image-id="170512"></figure>

Softbank released its 2Q earnings yesterday with a bounce back to profitability thanks to strong gains by global stock markets. We would direct readers to Kirk Boodry’s analysis of the details here, but what we would focus on is the question that Masayoshi tried, and in our opinion failed, to address.

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Softbank Group (SBG) reported robust results for Q2/20-21, with the large increase in NAV coming as no surprise as the Nasdaq has been at all-time highs. The rise in NAV was driven by share-price appreciation for Alibaba and other SBG/Vision Fund holdings, and most notably the Beike IPO in August 2020. The financial risk profile remains robust, with the LTV low at 12%. The disclosure relating to the group's new fund investing in tech stocks and options also addresses earlier rumours on the actual scale of the operation. Positively, it appears that SBG is happy to invest the large proceeds of its earlier asset sales into tech stocks instead of pulling a debt-funded management buyout of the group, which would be highly credit negative. It is also encouraging to see SBG make an effort to improve its corporate governance.

  Softbank Group (SBG) reported robust results for Q2/20-21, with the large increase in NAV coming as no surprise as the Nasdaq has been at all-time highs. The rise in NAV was driven by share-price appreciation for Alibaba and other SBG/Vision Fund holdings, and most notably the Beike IPO in August 2020. The financial risk profile remains robust, with the LTV low at 12%. The disclosure relating to the group's new fund investing in tech stocks and options also addresses earlier rumours on the actual scale of the operation. Positively, it appears that SBG is happy to invest the large proceeds of its earlier asset sales into tech stocks instead of pulling a debt-funded management buyout of the group, which would be highly credit negative. It is also encouraging to see SBG make an effort to improve its corporate governance. 

Softbank Group - Earnings Flash - Q2 FY 2020-21 Results - Lucror Analytics

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">According to <a href="https://www.bloomberg.com/news/articles/2020-11-09/softbank-is-said-to-be-in-talks-to-sell-robot-maker-to-hyundai" target="_blank" rel="noopener">Bloomberg</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> is in discussions to purchase Boston Dynamics. Although the exact terms are yet to be finalized, the local media mentioned that the purchase <a href="https://view.asiae.co.kr/article/2020111011314146483" target="_blank" rel="noopener">price</a> could fetch nearly $1 billion for the control of Boston Dynamics, which is best known for one of the most advanced robotic systems in the world including BigDog and the humanoid Atlas.</div>If the deal is successfully completed, we think that the market would view this deal positively on Hyundai Motor. Keep in mind that this M&amp;A deal could potentially fall apart due to many issues including price.

According to Bloomberg, Hyundai Motor Co (005380 KS) is in discussions to purchase Boston Dynamics. Although the exact terms are yet to be finalized, the local media mentioned that the purchase price could fetch nearly $1 billion for the control of Boston Dynamics, which is best known for one of the most advanced robotic systems in the world including BigDog and the humanoid Atlas.If the deal is successfully completed, we think that the market would view this deal positively on Hyundai Motor. Keep in mind that this M&amp;A deal could potentially fall apart due to many issues including price.  

Korea M&A Spotlight: Hyundai Motor In Talks to Acquire Boston Dynamics from Softbank

Telco/Internet specialist

Kirk Boodry

Redex Research

Softbank posted solid Q2 results helped by further market gains in the US (for both Vision Fund and its listed share program) and the timely IPO of recent investment Beike in August. But a $2.8bn derivative loss wiped out public market investment gains and highlights the risk from more aggressive trading. Softbank had $3.4bn in options exposure as of Q2 and whilst that is only 1% of net asset value, it is more meaningful when measured against market cap (3%) and with the next portfolio update not coming until February it is understandable why the discount to fair value remains wide

Softbank posted solid Q2 results helped by further market gains in the US (for both Vision Fund and its listed share program) and the timely IPO of recent investment Beike in August. But a $2.8bn derivative loss wiped out public market investment gains and highlights the risk from more aggressive trading. Softbank had $3.4bn in options exposure as of Q2 and whilst that is only 1% of net asset value, it is more meaningful when measured against market cap (3%) and with the next portfolio update not coming until February it is understandable why the discount to fair value remains wide

Softbank Group - Q2 20 Results: Vision Fund Luster Tarnished by Derivative Losses

Leonard Law, CFA

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.  We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover.

  With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is becoming more visible. Several companies have already achieved solid recoveries in Q3, as reflected by their results. However, new government-imposed lockdowns will have a substantial impact on the Q4 numbers.    We believe it is useful to analyse how COVID-19 has impacted companies at the height of the pandemic in Q2/20. As such, we provide an overview of the development of credit stats and liquidity, followed by brief round-ups of the developments and outlooks in the industries and various companies that we cover. 

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

Japan

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (9984 JP)

Softbank – What Is Softbank Indeed

Softbank continues to try and convince investors that it is a better investor than they are, whereas we argue that really they are just more...

Mio Kato

Softbank Group - Earnings Flash - Q2 FY 2020-21 Results - Lucror Analytics

Softbank Group (SBG) reported robust results for Q2/20-21, with the large increase in NAV coming as no surprise as the Nasdaq has been at...

Lucror Analytics

Korea M&A Spotlight: Hyundai Motor In Talks to Acquire Boston Dynamics from Softbank

Hyundai Motor is in discussions to acquire Boston Dynamics from Softbank. Boston Dynamics has one of the most advanced robotic systems in the...

Douglas Kim

Softbank Group - Q2 20 Results: Vision Fund Luster Tarnished by Derivative Losses

Returns at Vision Fund has come roaring back but a $2.8bn derivative trading loss highlights the higher risk profile with Softbank's new listed...

Kirk Boodry

Europe HY – Q2/20 Results Review And Credit Metrics Amid COVID-19 - Lucror Analytics

With the Q2/20 earnings season completed and Q3 season underway, the impact of COVID-19 on the credit profiles of issuers under our coverage is...

Lucror Analytics

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