Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Softbank shares are up 6% on news that Elliott Management has built up a $2.5bn (c. 3%) stake and is talking to management on enhancing value. That would reportedly entail a $20bn share buyback, greater visibility on Vision Fund investments and strengthening independent directors. And as we wrote a few days ago, that is relevant as shares are trading at a historically high discount to fair value. In the past, Softbank has been open to buying back stock at times like this but the WeWork debacle last year and hopes for a Vision Fund 2 had seemingly ruled that out. Elliott thinks Masa can do it by selling some of his Alibaba shares which makes sense to us but has been a red line in the past. All else remaining equal, Softbank could resist this kind of pressure but a failed Sprint/TMUS merger, weakness at WeWork and a need to fund Vision Fund 2 could force Softbank’s hand.  We think chances of a some sort of buyback have risen and a further reduction in the discount to fair value is possible.

Softbank shares are up 6% on news that Elliott Management has built up a $2.5bn (c. 3%) stake and is talking to management on enhancing value. That would reportedly entail a $20bn share buyback, greater visibility on Vision Fund investments and strengthening independent directors. And as we wrote a few days ago, that is relevant as shares are trading at a historically high discount to fair value. In the past, Softbank has been open to buying back stock at times like this but the WeWork debacle last year and hopes for a Vision Fund 2 had seemingly ruled that out. Elliott thinks Masa can do it by selling some of his Alibaba shares which makes sense to us but has been a red line in the past. All else remaining equal, Softbank could resist this kind of pressure but a failed Sprint/TMUS merger, weakness at WeWork and a need to fund Vision Fund 2 could force Softbank’s hand.  We think chances of a some sort of buyback have risen and a further reduction in the discount to fair value is possible. 

Softbank G: Elliott's Activist Intervention Is Well-Timed Especially if the Sprint Merger Is Blocked

<a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> Q3 19 results included the first details on the integration of Zozo, a firming up of guidance at the top of the range for operating profit, organic eCommerce sales growth ahead of the overall market and robust usage in its cashless payment app PayPay which likely remains the market leader.  Advertising revenue appears softer than expected and the company is guiding lower but eCommerce/fintech upside more than compensates. As with other consumer companies, quarterly trends have been impacted by the consumption tax hike on 1 October which makes Q3 YoY comps look weaker but this was a good quarter.

Z Holdings (4689 JP) Q3 19 results included the first details on the integration of Zozo, a firming up of guidance at the top of the range for operating profit, organic eCommerce sales growth ahead of the overall market and robust usage in its cashless payment app PayPay which likely remains the market leader.  Advertising revenue appears softer than expected and the company is guiding lower but eCommerce/fintech upside more than compensates. As with other consumer companies, quarterly trends have been impacted by the consumption tax hike on 1 October which makes Q3 YoY comps look weaker but this was a good quarter. 

Z Holdings: Solid Quarter Even Before Zozo Integration

The Financial Times reports that one of Softbank Vision Fund's top managing partners in the US has resigned citing concerns about internal issues including a failure to raise funds from outside investors for Vision Fund 2.  Whilst the public portfolio has rebounded this year as tech and China rally, it is clear that WeWork remains a long-term project, Sprint's merger plans are increasingly viewed as failing whilst concerns are rising about other parts of the Vision Fund portfolio. Softbank shares now trade at a 52% discount to fair value and a 50-60% range is likely the new normal until these issues are resolved.

The Financial Times reports that one of Softbank Vision Fund's top managing partners in the US has resigned citing concerns about internal issues including a failure to raise funds from outside investors for Vision Fund 2.  Whilst the public portfolio has rebounded this year as tech and China rally, it is clear that WeWork remains a long-term project, Sprint's merger plans are increasingly viewed as failing whilst concerns are rising about other parts of the Vision Fund portfolio. Softbank shares now trade at a 52% discount to fair value and a 50-60% range is likely the new normal until these issues are resolved. 

Softbank Group: Tech Upside Trumped by Sprint, WeWork and Vision Fund 2 Worries

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

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

In this month's “In-Focus”, we discuss Chinese offshore bond defaults in 2019. We look at the broader trends as well as select cases, and give our key takeaways on how best to assess the credit profiles of Chinese companies. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month's “In-Focus”, we discuss Chinese offshore bond defaults in 2019. We look at the broader trends as well as select cases, and give our key takeaways on how best to assess the credit profiles of Chinese companies.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Chinese Offshore Bond Defaults - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations. Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations.

   As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an uncontrolled Brexit averted for the time being, almost all asset classes recorded strong performance during the year, including European HY. Going forward, Brexit and US-China trade relations may well remain major market drivers. Other potential drivers include the coronavirus outbreak in China, tensions in the Middle East and the development of US-EU trade relations.    Our HY investment outlook opens with a discussion on the key macro developments that defined 2019, and the outlook for 2020. We then provide an overview of the HY market performance, and offer our top trade ideas for the year. Finally, we zoom in on the developments for key sectors and companies in our coverage universe, including outlooks and trade recommendations. 

European High Yield Outlook 2020 - 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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Softbank Group (ADR) (SFTBY US)

Softbank G: Elliott's Activist Intervention Is Well-Timed Especially if the Sprint Merger Is Blocked

Softbank shares are up 6% on news that Elliott Management has built up a $2.5bn (c. 3%) stake and is talking to management on enhancing value. That...

Kirk Boodry

Z Holdings: Solid Quarter Even Before Zozo Integration

Z Holdings (4689 JP) Q3 19 results included the first details on the integration of Zozo, a firming up of guidance at the top of the range for...

Kirk Boodry

Softbank Group: Tech Upside Trumped by Sprint, WeWork and Vision Fund 2 Worries

The Financial Times reports that one of Softbank Vision Fund's top managing partners in the US has resigned citing concerns about internal issues...

Kirk Boodry

Asia HY Monthly - Chinese Offshore Bond Defaults - Lucror Analytics

In this month's “In-Focus”, we discuss Chinese offshore bond defaults in 2019. We look at the broader trends as well as select cases, and give our...

Lucror Analytics

European High Yield Outlook 2020 - Lucror Analytics

As in 2018, Brexit and US-China trade relations took centre stage in 2019. With a phase-one trade deal between the US and China reached and an...

Lucror Analytics

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)