SoftBank (9984) – Conglomerate or Investment Vehicle?
SoftBank reports 1Q FY17 results on August 7th and we doubt that these will be particularly memorable. Given how well the shares have done, this is a reminder that stock price performance (once again) is being driven by Alibaba (BABA US), rather than by SoftBank’s core businesses. However, whereas in the past SoftBank could look for the likes of the domestic wireless business to play catch-up, that looks increasingly difficult as the 4G wireless market matures. If SoftBank’s stock is not to become a down-leveraged version of Alibaba, the company will need to make structural changes. This report looks at the various options.
Key Points
- SoftBank’s management has been hard at work over the past year adding various bits to the business
- It is getting difficult to tell what the firm’s strategy is, particularly now that the domestic wireless business is maturing
- If the firm is an investment vehicle, is it too wedded to some assets?
- If it is a conglomerate, how do the recent acquisitions and investments fit in?
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012.
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