Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>Softbank is reportedly looking at monetizing its entire TMUS holding as part of its asset restructuring plan which management prefers from a strategic perspective as it remains bullish on BABA as a core holding whilst the associated tax liability would be lower leaving more cash that can be used for debt reduction. </p><p>We estimate asset sales, debt reduction and tax payments result in 16% accretion to the equity value per share based on the underlying public value of assets which would results in the same upside for the share price if investors kept the holding company discount at the current 54%. </p><p>One could argue there is room for further upside as Softbank is selling assets at near full price to buy shares that value those assets at 50% but concerns on the debt reduction side of the plan have been vague whilst the valuation of private Vision Fund assets remains opaque leaving investors in the dark on whether more write-downs are possible.  We see the near-term potential but need clarity on both those issues to be more confident on narrowing the discount.</p>

Softbank is reportedly looking at monetizing its entire TMUS holding as part of its asset restructuring plan which management prefers from a strategic perspective as it remains bullish on BABA as a core holding whilst the associated tax liability would be lower leaving more cash that can be used for debt reduction. We estimate asset sales, debt reduction and tax payments result in 16% accretion to the equity value per share based on the underlying public value of assets which would results in the same upside for the share price if investors kept the holding company discount at the current 54%. One could argue there is room for further upside as Softbank is selling assets at near full price to buy shares that value those assets at 50% but concerns on the debt reduction side of the plan have been vague whilst the valuation of private Vision Fund assets remains opaque leaving investors in the dark on whether more write-downs are possible.  We see the near-term potential but need clarity on both those issues to be more confident on narrowing the discount.

Softbank Group: Selling More TMUS than BABA Fits Strategically Plus Tax Bill Should Be Lower

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

<p><br/> Softbank Group's (SBG) Q4/19-20 earnings were poor but in line with expectations, with most losses related to SVF and notably WeWork. These have been covered extensively by the press as well as in the company's guidance. SBG’s credit profile has deteriorated significantly, as seen in our own measure of LTV (Debt to Market Value of Listed Assets only). In addition, the credit profile will likely to continue weakening following the deconsolidation of Sprint and sale of T-Mobile. This could result in higher asset concentration, and lower geographical and business diversity. The near-term drivers remain the performance of Alibaba and the large monetisation programme. Liquidity is sound, due to the ample cash at the holdco and the asset monetisation programme.<br/></p>

  Softbank Group's (SBG) Q4/19-20 earnings were poor but in line with expectations, with most losses related to SVF and notably WeWork. These have been covered extensively by the press as well as in the company's guidance. SBG’s credit profile has deteriorated significantly, as seen in our own measure of LTV (Debt to Market Value of Listed Assets only). In addition, the credit profile will likely to continue weakening following the deconsolidation of Sprint and sale of T-Mobile. This could result in higher asset concentration, and lower geographical and business diversity. The near-term drivers remain the performance of Alibaba and the large monetisation programme. Liquidity is sound, due to the ample cash at the holdco and the asset monetisation programme. 

Softbank Group - Earnings Flash - FY 2019-20 Results - Lucror Analytics

Leonard Law, CFA

<p>Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.</p><ul><li><a href='#lucror-entity-169'>Kaisa Group Holdings</a></li><li><a href='#lucror-entity-315'>Softbank Group</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Kaisa Group HoldingsSoftbank Group

Morning Views Asia: Kaisa Group Holdings, Softbank Group

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.

Event-Driven

<p>Softbank did not disappoint the more cynical amongst us with an array of sombre presentation slides that lacked only for some b-movie horror flick's soundtrack and perhaps a few vampires and zombies thrown in for their ability to inspire comical terror. These were then followed by colourful results slides including Son’s favourite NAV discount and LTV slides and topped off by what we hope was someone’s sarcastic unicorn drawings. Ultimately though, what really matters for the company is how you choose to attach value to its Alibaba stake and whether you care about the rather telling behaviour by the company and its affiliates when it comes to all things cash.</p>

Softbank did not disappoint the more cynical amongst us with an array of sombre presentation slides that lacked only for some b-movie horror flick's soundtrack and perhaps a few vampires and zombies thrown in for their ability to inspire comical terror. These were then followed by colourful results slides including Son’s favourite NAV discount and LTV slides and topped off by what we hope was someone’s sarcastic unicorn drawings. Ultimately though, what really matters for the company is how you choose to attach value to its Alibaba stake and whether you care about the rather telling behaviour by the company and its affiliates when it comes to all things cash.

Softbank – Cash and Cash Flow Matters More than LTV and Pega-Unicorn Drawings

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/299/original/2020-05-19_06-46-49.png?1589838438" class="editor-image img-responsive" data-smartkarma-image-id="134299"></figure><div class="content-caption">Source • Japan Analytics</div><div><p>As this quarter's results and revisions announcements wind down, in the<strong> DETAIL</strong> below, we shall review Monday's updates:-</p></div><div><ul>
<li>The balance between positive/neutral/negative of the <strong>50</strong> results announcements was <strong>23:2:25</strong>. </li>
<li>For the <strong>24</strong> revisions/initial forecasts, the split was <strong>6:0:18</strong>, and the average Revision Score was <strong>-6.1</strong>. </li>
</ul></div>

Source • Japan AnalyticsAs this quarter's results and revisions announcements wind down, in the DETAIL below, we shall review Monday's updates:-
The balance between positive/neutral/negative of the 50 results announcements was 23:2:25. 
For the 24 revisions/initial forecasts, the split was 6:0:18, and the average Revision Score was -6.1. 


🇯🇵 JAPAN • Results & Revisions 18th May - Panasonic, Komatsu, Terumo, Sundrug & The Corona Valley

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 (ADR) (SFTBY US)

Softbank Group: Selling More TMUS than BABA Fits Strategically Plus Tax Bill Should Be Lower

Softbank is reportedly looking at monetizing its entire TMUS holding as part of its asset restructuring plan which management prefers from a...

Kirk Boodry

Softbank Group - Earnings Flash - FY 2019-20 Results - Lucror Analytics

Softbank Group's (SBG) Q4/19-20 earnings were poor but in line with expectations, with most losses related to SVF and notably WeWork. These have...

Lucror Analytics

Morning Views Asia: Kaisa Group Holdings, Softbank Group

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Softbank – Cash and Cash Flow Matters More than LTV and Pega-Unicorn Drawings

Softbank did not disappoint the more cynical amongst us with an array of sombre presentation slides that lacked only for some b-movie horror...

Mio Kato

🇯🇵 JAPAN • Results & Revisions 18th May - Panasonic, Komatsu, Terumo, Sundrug & The Corona Valley

As this quarter's results and revisions announcements wind down, in the DETAIL below, we shall review Monday's updates:- The balance between...

Campbell Gunn

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