Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Both Alibaba (-6%) and Didi (-12% pre-market) are down on regulatory pressure </li>
<li>Vision Fund valuation losses are approaching $20bn for Q4 and the current (unrealized) portfolio has turned negative</li>
<li>NAV/Share and the share price are at two-year lows and gains from the post-Covid tech run are largely gone</li>
</ul>


Both Alibaba (-6%) and Didi (-12% pre-market) are down on regulatory pressure 
Vision Fund valuation losses are approaching $20bn for Q4 and the current (unrealized) portfolio has turned negative
NAV/Share and the share price are at two-year lows and gains from the post-Covid tech run are largely gone


Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>The headlines for <a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>'s recent results looked encouraging but the higher driver and consumer incentives hit revenues and profitability towards the end of the year but this is temporary.</li>
<li>
<a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (GRAB US)</a> is facing stiffer competition in the region, especially from <a href="https://www.smartkarma.com/entities/gojek-goto" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a> and Shopee Food but is defending its lead and preparing for higher growth in mobility requiring investment.</li>
<li>Increasing exposure in digital financial services plus more focus on verticals such as online groceries bodes well for future growth. A market cap of US$12.5bn with US$6.8bn in net cash.</li>
</ul>


The headlines for Grab's recent results looked encouraging but the higher driver and consumer incentives hit revenues and profitability towards the end of the year but this is temporary.

Grab (GRAB US) is facing stiffer competition in the region, especially from GoTo and Shopee Food but is defending its lead and preparing for higher growth in mobility requiring investment.
Increasing exposure in digital financial services plus more focus on verticals such as online groceries bodes well for future growth. A market cap of US$12.5bn with US$6.8bn in net cash.


Grab (GRAB US) - A Rough Ride for Now but Smoother Terrain Ahead

<ul>
<li>Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.</li>
<li>With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.</li>
<li>The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.</li>
</ul>


Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.
With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.
The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.


Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

<ul>
<li>
<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> shares have fallen 46% since 31 March v a 52% decline for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> with little daylight between the two since August</li>
<li>That reflects fading influence from Vision Fund which is shed $12bn in value Q4 to date and c. $30bn this fiscal year.</li>
<li>The discount remains in the 50% range as tailwinds from the share buyback depend on a successful IPO of ARM, where the magnitude and timing remain uncertain</li>
</ul>



Softbank Group (9984 JP) shares have fallen 46% since 31 March v a 52% decline for Alibaba Group (9988 HK) with little daylight between the two since August
That reflects fading influence from Vision Fund which is shed $12bn in value Q4 to date and c. $30bn this fiscal year.
The discount remains in the 50% range as tailwinds from the share buyback depend on a successful IPO of ARM, where the magnitude and timing remain uncertain


Softbank Group - Alibaba Remains the Key Share Price Driver as VF Diversification Stalls

<ul>
<li>Nvidia is reportedly close to throwing in the towel on the acquisition of ARM (although markets have assumed that outcome for awhile)</li>
<li>Softbank can still monetize the asset through an IPO but most likely at a lower valuation and with much fewer proceeds</li>
<li>We believe ARM was the primary source of buyback funds and with VF down $13bn QTD prospects for meaningful buybacks have been pushed out</li>
</ul>


Nvidia is reportedly close to throwing in the towel on the acquisition of ARM (although markets have assumed that outcome for awhile)
Softbank can still monetize the asset through an IPO but most likely at a lower valuation and with much fewer proceeds
We believe ARM was the primary source of buyback funds and with VF down $13bn QTD prospects for meaningful buybacks have been pushed out


Softbank Group - ARM News, Vision Fund Weakness Highlight That Share Buyback Will Be Back Loaded

United States

DoorDash, Inc. provides restaurant food delivery services. The Company develops technology to connect customers with merchants through an on-demand food delivery application. DoorDash serves customers in the United States.

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DoorDash (DASH US)

Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

Softbank shares have given up all the post-Covid gains, pressured most recently by further regulatory weakness at Alibaba and Didi. The latter is...

Kirk Boodry

Grab (GRAB US) - A Rough Ride for Now but Smoother Terrain Ahead

Grab's recent results looked encouraging in terms of headline GMV but the higher driver and consumer incentives hit revenues and profitability...

Angus Mackintosh

Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Vision Fund's public portfolio has been hammered on weakness at Grab, Coupang and WeWork and QTD losses are approaching the record level from Q2...

Kirk Boodry

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

Softbank shares have given up all the post-Covid gains, pressured most recently by further regulatory weakness at Alibaba and Didi. The latter is...

Kirk Boodry

Grab (GRAB US) - A Rough Ride for Now but Smoother Terrain Ahead

Grab's recent results looked encouraging in terms of headline GMV but the higher driver and consumer incentives hit revenues and profitability...

Angus Mackintosh

Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Vision Fund's public portfolio has been hammered on weakness at Grab, Coupang and WeWork and QTD losses are approaching the record level from Q2...

Kirk Boodry

Softbank Group - Alibaba Remains the Key Share Price Driver as VF Diversification Stalls

Vision Fund, ARM and buybacks have grabbed headlines but Alibaba's share price has been the best predictor for Softbank's value, particularly over...

Kirk Boodry

Softbank Group - ARM News, Vision Fund Weakness Highlight That Share Buyback Will Be Back Loaded

Shares never captured Nvidia upside so the collapse of the ARM sale is not surprising but it also removes the primary source of funds for the share...

Kirk Boodry