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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you very much for waiting, everyone. Now we would like to start the SoftBank Group Corp. earnings results announcement for the 6-month period ended September 30, 2021. First of all, I would like to introduce today's participants. From left, we have Masayoshi Son, Chairman and CEO; Yoshimitsu Goto, Board of Director and CFO; Kazuko Kimiwada, Senior Vice President and Head of Accounting Unit. Today's announcement is live broadcast over Internet. Now I would like to invite Mr. Son, Chairman and CEO, to present you the earnings results and business overview. Mr. Son, please.
My name is Son. Thank you very much for today. Well, life is so interesting. There are so many dramatic events. Just about 6 months ago, back in March this year, we have announcement for the year-end in May, and we have spent 6 months since then. Back then, I said SoftBank born at Zasshonokuma about 40 years ago, started by myself and 2 other part time. And I looked back and talked about that. I said that there is a dream over the road, and we have grown so much since then. That was my talk. And today is the next chapter from there. And let me start my presentation. So next chapter, what happened to us? Blizzard, we are in the middle blizzard. So I said that there is a rainbow over the road, and we have grown so much. That's what I said. In Japanese economy, we reached JPY 5 trillion of net income, and I was so proud to present our result and also looked back at 40 years ago. And 6 months later, what happened to us? We are in a snowstorm again. It's a blizzard. We are in a winter storm. And here, last, yes, first half, it was JPY 1.8 trillion net income. This time is a big reduce, JPY 360 billion. It's not a loss, so maybe it's better. But actually, effectively, it's a big loss. How bad or how loss? I would say, effectively, JPY 6 trillion loss. JPY 6 trillion loss means -- I have several times mentioned, I most importantly focus about the net asset value, NAV, compared to accounting net income. So for me, for SoftBank Group, more important, a key performance indicator is net asset value, NAV. And SoftBank as an investor, this is the most important indicator for us, and we have reduced JPY 6 trillion in just 3 months. This is a big event. So effectively, JPY 6 trillion loss, we are in big winter storm entering into the big blizzard. So for shareholders of SoftBank Group, I believe this is one big event. It is a one big event, but at the same time for me, I am not that pessimistic. Actually, it's not always the bad stories. That's something that I would like to speak about in the following pages. But in summary, no excuse. Our net asset value has decreased by JPY 6 trillion. That's the fact I wanted to share in the first pages of my presentation. And let me also share you the breakdown. In one word, Alibaba. Amongst our net asset value, the largest portion has been Alibaba, and this Alibaba has reduced its value quite largely. Alibaba is a listed company, public company, so share price of Alibaba is disclosed, and also, it is shared by everyone. So I believe that the many people always expected to some extent that Alibaba share price has been impacted to our net asset value. And this is how we describe in the graph. So the orange bar, it has been taking about -- some time that it has taken about -- occupied about 60%. But amongst TNAV right now reduced down to 28%. On the other hand, it's not always decrease. Actually, our main course, our core business, which is Vision Fund, which I've been explaining several times, and this Vision Fund actually taking or accounted for about 44% amongst total net asset value. So you can see this blue portion or the blue bar is increasing steadily. Last year, just about a year ago, the same time last year, first half and that as of today, if you compare with those 2, net asset value of JPY 27 trillion, Alibaba was accounted for about 60%. Now that's reduced to JPY 20 trillion, so 59% of Alibaba share has decreased to 28%. And the 16%, which is a relatively small portion of Vision Fund, has grown to 44% just in a year. This is the now biggest part for net asset value of SoftBank Group. If you take a look at our net asset value by countries, United States actually making a steady growth, blue bar. China is the red bar. Majority of the China's portion is Alibaba share, so due to the decrease of Alibaba share, and also, there are some Chinese portfolio by Vision Fund such as Didi, which went public successfully. However, those high-tech shares in China is having some difficulties. And those high-tech stocks in China has been seeing a decrease in its share price. And the same as Alibaba and Didi and also other portfolios in China has been reducing its value in the past 3 months. But when you take a look at the blue bars and the green bars, with those 2 are actually making good growth steadily, which means United States and others are making growth. So net asset value is the most important indicator for SoftBank Group. But there is another thing. So I would say 2 things, 2 indicators that we very much see the importance. One is net asset value, and the other is loan to value. So with those 2, SoftBank Group managements are managing our business. In loan to value, this is the -- amongst our holding assets divided by net debt. So because many people will say that the SoftBank Group is a king of debt or something, but that's actually a very much misunderstanding. That's the old SoftBank. That's the -- actually, there are some time that we have experienced about 65% of loan to value. But then, of course, I would say Sprint transactions or Vodafone's transaction, right immediately after such transaction, I do recall that we have reached to somewhere 65% of loan to value. But then I believe that we are very much a high-debt company, and that was very risky. But at this moment, net debt over equity value of holding right now, loan to value, is 19%, which is very safety level for me. So in the last 3, 4 years, how has LTV been moving? On the left-hand side, it was like 3 years ago when SoftBank Mobile was 100% subsidiary of SoftBank Group. Then SoftBank went public. Since then, LTV has been always under 20%. And we are running the business safely, if you will. Looking at LTV, in our internal rule, 25% -- around 25% is the level that we should keep in terms of LTV. In the worst-case scenario, still, we want to make sure that it won't exceed 35%. That's our financial discipline. That's the indicator. Either 25% or 35%, we don't want to exceed those level. That's the strict discipline that we set for us. Even though equity value of holding went down by 50%, we should be okay. That's how we see LTV. Now talking about the Vision Fund. In the last 3 months, even Vision Fund lost about JPY 1 trillion. So again, we are not proud of that either. In the last 3 months, I said NAV lost JPY 6 trillion, and most of that was due to Alibaba share drop. And also, SoftBank Vision Fund performance is not something that I'm proud of either. So Vision Fund lost JPY 1 trillion in the last 3 months. However, looking at the cumulative number, we see JPY 6 trillion of gain since the inception of SoftBank Vision Fund. So Vision Fund itself is successful. But looking at the last 3 months, for example, Didi, like I mentioned earlier, Didi went public successfully in China. However, after they went public, they are facing a tough challenge in terms of Chinese regulations. And other Chinese companies that we own, most of them have lost their values recently. And later last year, Coupang in South Korea also went public successfully and rebound. We see from that successful IPO of Coupang, so they lost value as well. So SoftBank Vision Fund lost gain from JPY 7 trillion to JPY 6 trillion cumulatively. If you look deeper, Vision Fund 1 accounts for most of the gain. Fund 2 and LatAm Fund is indicated in the light blue in the bar chart, so they just started. So Vision Fund 1 has longer history and performance of Vision Fund. Usually, when it comes to fund, it takes 3, 4 years to see gains. So Vision Fund was earlier than Fund 2 and LatAm Fund. Of course, we saw a lot of events like WeWork shock, if you will, and Uber's failure in terms of IPO and also COVID-19 pandemic. We have gone through a tough period. But over that, Vision Fund 1 after COVID-19, they started building again the value. And Vision Fund 2 and LatAm Fund, we just started. So in the next 3, 4 years, we believe that they're going to see more values coming in. By the country or regions, the U.S. indicates blue. And in terms of NAV, again, U.S. is growing steadily. And Vision Fund, despite COVID-19 and WeWork issue, in fact, WeWork went public recently. It's been recovering steadily. And DoorDash in the U.S., again, successful IPO. So U.S. has been doing well. And green is Asia, Europe and South Africa -- excuse me, South America. So Coupang, for example, in South Korea was successful. So green has been doing well. And China is the only one, which is in red, has lost in the last 3 months. So the gain they acquired -- accumulated had gone in the last 3 months. And Alibaba's share price drop and Vision Fund portfolio companies drop in terms of share price were key drivers of Vision Fund loss. So cumulatively, how much they invested in what country, U.S., China, 2 major markets in terms of Vision Fund investment and also Asia, Europe and Latin America. Put them together, it looks green is big pie. But talking about individual country, U.S. is the majority. And green part in the pie chart, we want to build more value here. It's slightly different from venture capitals in Silicon Valley. Of course, we are successful in U.S., but also, we are successful in other regions as well. By sectors, consumer services, logistics, mobility. Well, in consumer service, there is a coupon, and DoorDash is in logistics. Mobility includes Uber and others. And also, fintech is interesting. Its presence is growing. And Vision Fund, I'm confident with Vision Fund. But some people may say that, even though I mentioned that SoftBank Vision Fund plays a key role in SoftBank Group, but some people may say that Masa makes all decisions when it comes to SoftBank Vision Fund, which is not true. There are about 3,000 companies in the pipeline, and we are looking at them regularly, and our investment team has offices across the globe, and they conduct preliminary screening and the writing. They do diligence, and they go through investment committee, which includes myself as a member. So we are going through this rigorous process. And there are about 100 people looking at pipeline by regions, by sectors, et cetera. Difference between Fund 1 and Fund 2 is as follows. Fund 1, well, investment per deal, investment amount per deal was bigger in Vision Fund 1 compared to Vision Fund 2. For example, investment per deal by Vision Fund 1 was about JPY 100 billion. So ticket size per deal is 1/5 of Vision Fund 1. In case of Vision Fund 2, so Vision Fund 2 want to make ahead more than Vision Fund 1. So we would like to make a cumulative gain. So per investment, rather than making a big swing, rather, we would like to make sure to robust and also allocate in diverse way. Another highlight is the -- our ownership per case. Vision Fund 1 case, we put about 20% or so. But in Vision Fund 2, we make it about teens. So our ownership stake in -- per company has been smaller in detail. But at the same time, number of deals has increased compared to Vision Fund 1. So we have reduced the size per ticket, but the number of deals has increased. So in total, the amount of the investment is about same or even bigger compared to Vision Fund 1. From our understanding, try to take an ownership stake for 20% or 30%, that will make us more expensive. And also, counterpart shareholder do not want to see too much dilution. So if we want 20%, 30%, then that will be more expensive. So that was a kind of a negotiation case. But rather making smaller ticket and also a little bit earlier to enter so that we can reduce the ticket size and also not taking a large ownership stake so that we'll be able to make it in detail. In case of Vision Fund 2, as a shareholder, as an investor, this Vision Fund 2 is owned by SBG, SoftBank Group 100%, so there is no outside investor. Because Vision Fund 1 has an external share -- investors for 50%, so that our ownership was effectively 11%. So our ownership was -- it was 11% to 15% when it comes to ownership stake per company or per case. So that makes us easy to enter and also easy to exit at the same time. So that will make us able to manage in details. And what are we doing? And many people still wonders what SoftBank Group does. And in principle, we are investor, and we invest in companies. So we focus on private unicorn companies, and we would like to create the group of AI unicorns once they go public because after they grow and mature and go public, then we exit or we divest. And once we monetize or exit those companies, then that will be recycled, too, as on capital for the investment into new private unicorns. I said that we would like to manage our loan to value less than 25%. And where the money comes from, is that JPY 3.2 trillion for first half that we have invested so far? Where that money comes from? About 90%, about JPY 3 trillion came from those shares that went public, or we utilize or monetize those shares. We utilize for asset financing. So it's not a new money like issuing bond or making more loan or anything, but rather, we would like to do within our assets so that we can monetize. And also, we can now making recycling ecosystems. So as I mentioned in the beginning of my presentation, compared to 6 months ago, I was very proud to announce the result with 40 years ago memory and creating the big gain. And 6 months later, we are in the middle of blizzard. And just in 3 months, especially mainly from Chinese portfolio, we have seen a reduced -- a reduction of the net asset value. But still, for me, I can see something here. You can see a little bit of sprout there. In the middle, you can see the new green sprout is coming out. That's something I see in the blizzard. So we are seeing such new sprout in the snowstorm, and we would like to raise this sprout with well-managed way. About a year or 2 years ago, SoftBank Group, I said SoftBank Group is the goose that lays golden eggs. So I talked about the golden eggs coming out from those goose, and that's something that I used as on slide for presentation. And those golden eggs, number of golden eggs will be increasing. That's what I said back then. And you see this dotted line, starting from there that we launched Vision Fund. In the past 20 years, it's about 1 or 2 companies that we have seen the monetization by going public or exit. But since the launch of Vision Fund, 2 companies, 4 companies, 6 companies, you're seeing the doubling numbers. And for this year, only in 6 months, we have already seen 18 companies. So if we add second half, I am so sure that we'll be able to see more numbers. Actually, that those 8 companies are already applied for IPO. And also, there are 5 companies which has already announced its merger with SPAC. So we're already seeing about 31. This number, they are already in process of going public. Therefore, we are making very steady steps to lay about double the number of golden eggs compared to last year. So we are looking at around 30 golden eggs. Inside of these golden eggs, sometimes, this golden egg does not come out as a good goose. But sometimes, we can see the shining golden eggs which becomes shining goose, so like a DoorDash. Those are actually inside of these eggs, so that, that ratio is also going to increase. Vision Fund, it's not that we only are investing in 20 companies or 30 companies. So we are actually investing in 368 companies. I mentioned earlier cumulative gains of Vision Fund, about 90% came from -- are coming from Vision Fund 1. Actually, Vision Fund 1 had to spend about 3, 4 years to start seeing such a gain. But with Vision Fund 2 and LatAm Fund, although the ticket size become smaller, but already a number of companies we invested has grown to about 3x or more than 3x, I would say, or even 4x -- about 4x. So per ticket size is -- even its ticket size is 1/5, but now, we are number of -- about the same number of our eggs are in the goose or 3x as much as -- 3x numbers of eggs are in the goose already compared to Vision Fund 1. So that's why I said that we are still in the blizzard. However, we start seeing ecosystem working already with our assets' money, monetizing the assets or exiting those assets that can utilize those money to recycle the ecosystem. And the new sprout is also coming out, which is Arm and PayPay. Arm, as you know, we bought at about JPY 3 trillion. And Arm was valued at JPY 4 trillion when we agreed with NVIDIA for merger and 1/3 cash, 1/3 in NVIDIA shares. And since then, for 1 year, NVIDIA share price doubled. So if and when NVIDIA deal is closed, JPY 3 trillion should go to JPY 4 trillion, and according to the current share price of NVIDIA, JPY 9 trillion. So by that, what I mean is deal should be considered as JPY 9 trillion deal, not JPY 4 trillion deal. So JPY 5 trillion is, of course, not materialized and also subject to the government approval. And PayPay, I'm confident with PayPay. And talking about NAV, I keep talking about and also I mentioned a new bud. And again, NAV, to remind you, about JPY 25 trillion, including Alibaba, Vision Fund and others. And we have net debt of JPY 4.8 trillion. So NAV should be JPY 20.9 trillion. But looking at the market cap as of September end, JPY 11.1 trillion. So value of the holding, JPY 25 trillion; and market value, JPY 11 trillion. And compared to NAV, we see about 50% discount. So how NAV has been going for the last 20 years or so? As you can see, we have ups and downs. And since 2020, it's been steadily going up, as you can see. As of September end, I said JPY 20.9 trillion. And since then, about JPY 1 trillion rebounded, and I'm sure that it goes up even further. Still, our market cap went down since September end. So discount has widened to 51 -- excuse me, 52% per share. JPY 12,914 is the NAV per share; and as of 3:00 today, JPY 6,161 per share, which means 52% of discount. But again, NVIDIA, about JPY 5 trillion of unrealized gain should be expected. So the NAV should go up higher. Of course, we don't get approval, so we don't mention here about NAV's expected gain. Also on top of that, PayPay should grow further. So considering that, discount for me effectively is around 60%, taking into consideration of NVIDIA and PayPay. So again, even though we are in the middle of blizzard, we are seeing bud like this, and maybe not 1 but 3 buds are over there in the snowstorm. That's for me. Message to shareholders. I, myself, is one of the shareholders of SoftBank Group against the backdrop where there is 50% -- 60% discount. From a shareholders' perspective, how can we take advantage of that and turn it into something positive as opposed to negative? One way is repurchase. Again, I am a shareholder of SBG. And I keep saying blizzard and snowstorm, et cetera. But to be honest, I am excited because we are discounted against our true potential. If that's the case, now is the time. Now is the chance to repurchase shares. So we had a heated discussion at the Board meeting, and we agreed that we will repurchase our shares JPY 1 trillion. I am so excited because I am a shareholder, so I have been expecting this Board approval. So share buyback of JPY 1 trillion, how much we can purchase for 1 year? That's level that we agreed and approved at the Board of Directors meeting. So in 1-year period, of course, we want to complete repurchase of our shares at JPY 1 trillion. NVIDIA -- excuse me, NAV is important, and LTV needs to be taken into account. And also, investment opportunities, we don't want to lose. So finance policy, investment opportunities and NAV discount, those are very important indicators for us we need to look at. So chances are we may not reach JPY 1 trillion in 1 year in terms of repurchase of our share. So JPY 1 trillion of share buyback, we want to complete in 1 year. But we may not reach JPY 1 trillion in 1 year. If we don't reach JPY 1 trillion within 1 year, even though we may extend the period, of course, we have another discussion at Board of Directors meeting. But I hope to reach JPY 1 trillion, even though it may take longer than 1 year. So anyway, the point here is JPY 1 trillion of share buyback. There are chances that the term may be longer than 1 year, just so you know. Usually, in the earnings result announcement, I talk about some companies that we have invested in, but today, we just wanted to focus on share buyback and the importance of NAV. Again, thank you very much for your attendance and attention today. That's my -- that's all for my presentation.
[Operator Instructions] Yes, the white shirt in the very front row, please.
My name is [ Nakajima ] from Kyodo Tsushin. The other day, you have -- it was reported that is invested in accurate firm in Japanese company, and Son-san, you've been worried that there is not such Japanese portfolio companies. But I believe this is -- is this the first step for you to start investing in Japan? What is your investment policy for Japanese company?
Yes, of course, we would like to increase or we'd like to see the increase of numbers we invest in Japanese companies. About 3,000 companies are on our pipelines and we see in the deal flow. But it's really regret to say that the number of Japanese companies are so small out of those pipelines, and I've been thinking this is really unfortunate. But the first investment has been made in Japan by Vision Fund. Hopefully, we will be able to start seeing more and more AI unicorns in Japan and hoping that we'll be able to increase the number of investments.
Next question.
Nakagawa from Toyo Keizai. About SVF 2, I think committed amount is about 414 -- JPY 44 billion. So looking at LTV in the future, how much are you going to build a commitment?
Well, thank you for your question. Of course, we are looking at LTV and other key performance indicator to make a decision, but we are seeing a lot of listed companies in the portfolio and exit and monetization. Constantly, capital should come from them. So every year, about JPY 100 million of investment, we want to continue taking into account of LTV.
So going forward, JPY 100 million is the commitment that you're going to build every year?
Yes, constantly and flexibly.
My name is [ Ichikawa ] from Yomiuri Newspaper. So I have a question about Vision Fund 2. I believe we see more and more early-stage company investment. But a number of home runs are reducing, but at the same time, you can risk-hedge those. But considering the Chinese market, any ideas, your policies on the investments or capital policy may change because of those changes. What is your idea?
As you saw in my presentation, ticket size per case per project is smaller or we are not making a big swing. But I would say JPY 20 billion per investment is already large enough compared to traditional venture capital. I believe this is about 10x, 20x compared to traditional ticket. But at the time of Vision Fund 1, we learned a lot of lessons. We studied and understand many things. And I believe this is quite appropriate size -- ticket size now. And at the same time, we would like to cover many sectors, including fintech, Medicare, and diversified our portfolio so that we can make a good balance. In terms of region, in terms of sector, we would like to make in detail portfolio diversification, so that not the big swing, not a big ticket size, not a big risk. Steadily, we would like to increase. And I think we have a good system take placed. The number of deal was -- is increasing dramatically. So by increasing the cases, deal cases, and because we see the increase of number of cases, even though that we have a smaller ticket size, we still believe that the results is good enough. Capital policy-wise, we are not marketing to the external investors. I don't think right now we don't need to ask for outside money. I think that we can do buy our own. Rather, we would like to do our own share buyback. But still, we can manage our balance sheet to -- for such investments.
Next question, please, from the floor.
[ Oda ] from Jiji Tsushin. In the presentation, you mentioned Arm's selling to NVIDIA. And European regulators are concerned in some press. So currently, what's your view on the prospect of regulatory approval? And also, what kind of impact you expect from competition on newer investment?
Of course, regulators want to review very carefully, and they have gone into second stage of examination. I still believe that, that review should be completed successfully. I can't promise. Nobody can promise, but I myself believe that approval process should go successful.
What about economic security, challenge or issue?
Even though Japan SoftBank owns Arm or U.S. NVIDIA owns Arm, from economic security perspective, I think it won't make a big difference at least in terms of Arm.
Next question, second from the top.
My name is [ Sanda ] from Nikkei Business. I would like to ask for -- about the core investment program for the fund. And I believe you have announced previously, and any other or how -- any other people are joining this co-investment program? Or what kind of allocation?
Well, I, myself, has committed to that program. And for the other members, at this moment, we are still adjusting. And it was not shown on my presentation, but the investment in public securities, the company called SB Northstar, which I invest about 30% in this company as a co-investments, but this is about to close or end. So investing in Amazon, Google, Facebook, such public securities has been made by SB Northstar. But it's -- on SoftBank Group, it was about plus/minus 0. So it was making quite a big loss before, but as of today, it's about plus/minus 0. At the very beginning, when we started investing in Amazon or others, this Northstar, the organization itself has not been created. So my investment has a little bit later. So it was making a big gain in the beginning, but after I start joining this investment, it became loss. So I think it was about JPY 150 billion risk I took and JPY 150 billion loss personally. But as a manager, so myself, about 30%; SoftBank Group, about 70%. This 70% SoftBank Group portion, actually, in the very beginning, it was SoftBank Group 100% and making a good gain. But after then, it made a loss. So in total -- or actually the plus/minus 0. But I came in later, so I was already in the negative bucket. So -- but here, I believe that this is something that is showing the management taking a risk and join the investment. When it comes -- it goes well, then that we all make it happy. But when it goes bad, then that we all lose money. So for this Vision Fund 2, I would like to once again make a risk, and I have confidence that we will be able to make this happen. But at the same time, for other management to join and take a risk, that's something very tough things to do. If you need to pay your own personal money, taking a risk for several tens of billions yen which is a very high-risk thing. So we do need to do the -- coordinate well, and we need to be careful about that. But me as a captain of the boat, that not the 30% this time, but we would like to take -- we are taking -- I am taking some tens of the percent for this program for this co-investment program, not making any risk for the shareholders. So there are some risk for this co-investment program, that is why it's taking a little bit of time to finish this.
Next question on the floor.
[ Okatani ] from NHK. Talking about investment in start-up in Japan, you made the first investment in Japan and second and third. Is there a possibility to do that again? And what kind of conditions should be met in Japan for you to make an investment in Japanese startups?
In fact, second deal is happening. We are talking with the company, negotiating on terms and conditions. So the second one should come sooner or later. And there are others, other potentials in Japan, so I'm sure that we're going to have more and more companies that we invest in Japan.
Next question.
My name is Otsubo from Sankei Newspaper. I have a question about PayPay. I believe this can be a big sprout, same as Arm. But at the same time, I believe, and we expect that the PayPay can be super up. But also you have LINE as well. And in May, there are many super apps amongst you. So do you have any strategy on the super app type of concept?
I am quite confident and convinced that PayPay is going to be growing big. And PayPay has created together with SoftBank Group, SoftBank Corp. and Z Holdings. Number of downloads of apps amongst all these sectors, actually, PayPay is #1 these days. Amongst all the sector or category, payment app is taking a #1 position for us for a number of downloads, which is not the phenomena that you can see in other countries. And actually, it's even growing. Number of transaction amount is increasing as well. So I am so sure that this is growing.
Right now, they are still making loss. So this loss needs to be -- and I want to see as early as possible to turn in profitable. I said making loss, but gross margin-wise, now that they are making money, so turning into profitable when it comes to gross margin. So we'll still have enough such a cost, so not the net -- not yet on net income, still they're not less, but they are all in the same group. So I believe that it is going to make a good super app with the collaboration amongst those companies.
Shareholders' value or IPO, how about that?
Sometime when the time comes, I really motivated, and I hope that we can see the company going public. But the value or the timing, I believe it's too early to discuss at this moment.
So 3 more people from the venue.
Suzuki from Nikkei Asia. Certain companies to be listed you mentioned in the presentation, and one of them should be Paytm in India, I believe, valuation-wise, JPY 20 billion or so? So maybe a little bit lower than your target level. So that kind of market expectation is -- what's your view on that? So what's your view on potential of Paytm in the future?
Well, I believe Paytm should grow significantly. And valuation-wise, of course, it depends on market condition and investors' appetite. Either way, I believe that valuation should be bigger than the cost that we spend when we made an investment. So for us, the IPO should be a great event. And I believe that they can grow their value going forward. Not only Paytm, but also, there are other businesses that we have expectation, high expectation of. So for the year-end and early next year, I'm looking forward to those potentials, possibilities. Number of IPO has been growing, and some make a big hit.
My name is Wada from Nikkei Newspaper. So some media rights that there are some management of Visual Fund is leaving the company. Is this true? And also, what is your employment policies to maintain those talents?
Silicon Valley, there are some turnovers always happening in any companies. When you look at Apple, Google, Facebook, whatever the company is, we see the turnover. From Japanese culture's point of view, sometimes feel sad to see. But actually, that's the kind of a culture of Silicon Valley. There are always the replacement or turnover of the people. And we have assumption that is happening anyway. So that it's not that asking for each individual capability, but we would like to see as an organization capability, organizational structure. Strengths of such organization needs to be cared and also grow. And there are some people leaving us, but there are people coming in to us. So that's happening all the time. So there are some great track record member in the other competitor fund is actually interested in us, or the new manager level is actually taking an offer or because of our track record, our momentum, I believe, that attracts new talent as well. So they are knocking our doors, too. So in such situation, we hope that we'll be able to make the organization strong.
And last question from the floor, please.
Fujikawa from Wall Street Journal. A question about technology companies in China. What kind of impact should you expect regulatory environment in China against especially technology companies? And what kind of impact that would have for startups in the future?
Thank you for your question. I am a little bit concerned about what's happening in China, but also, AI-related companies are coming up. So we continue to invest in AI companies like we do every day. In fact, in the morning over the Zoom, I had a call with a Chinese company that has been growing exponentially. So AI revolution, AI technology-related companies are coming up, emerging in China. And I hope that and I believe that those companies will grow. In that sense, we will continue to invest in those potential AI-related companies in China. I hope that they're going to grow even further in China.
So that's all from questions from the floor. So now take questions from Zoom participants. [Operator Instructions] So first question is from Inagaki-san from Financial Times. [Operator Instructions]
Yes. This is Ms. Inagaki from Financial Times. I would like to ask you about the buyback. You have mentioned about the possibility, but you would like to enhance the corporate enterprise value by increasing the value of Vision Fund, of course, that at this time, a big reduction in net asset value. But still, why you come to this announcement or buyback at this moment, at this timing?
Because of discount of net asset value increased, for the current share price, I believe, is the timing for buy for shareholder. That's my belief. That's how I understand the current situation. So that is why we came to this conclusion. Of course, new investment opportunities, we don't want to miss those. So that we need enough capital available for those new opportunities and, at the same time, to make sure -- manage our loan to value less than 25%. So we would like to make sure to keep this discipline. And also cash position, always in cash that we would like to make sure to cover 2-year equivalent of redemptions for the bond. So keeping such financial discipline, and still, we think that we are in a position that we can announce this JPY 1 trillion level of the buyback. So that's why we come to this conclusion.
Next, Hyuga-san from Bloomberg.
My name is Hyuga from Bloomberg. My question is, are you talking about taking advantage of lower share price and turn it to something positive? When we talk to institutional investment, investor of SoftBank Group, not because of share repurchase, but China risk is a big reason why they were concerned about SBG. Like you mentioned, Chinese stocks accounts for about 20%. And you just mentioned that you continue to invest in Chinese companies. So don't you think that would be interpreted as a risk by investors? Our share buyback or monetization program of JPY 2.5 trillion, it was successful at -- for time being, but share price went down.
Thank you for your question. Like I mentioned earlier in the presentation, just 1 year ago, Chinese companies, especially Alibaba, while the Chinese companies accounted for 60% of NAV and now just 20%. So percentage of China in NAV has gone down dramatically. If it is still 60%, maybe China risk is a huge cloud over us. But again, percentage is down to 20% in terms of NAV. Also, even though I mentioned that we continue investing China, in terms of companies invested by Vision Fund, only 20%. So from that perspective, I don't think that China risk is so huge. I think it's a manageable level. And again, ticket size is small, and we make sure that the company that we invest in is something very healthy and manageable.
Next question is from Owada-san, Nikkei BP.
This is Owada speaking. So I have a question about AI venture investment in Japan. About 6 months ago, you mentioned that you have ideas to grow the AI ventures in Japan, but it's still too early. But since 6 months has passed, can you share with us what is your new idea?
We are still working on. So through Vision Fund, we made the first investment in Japan. We found the first one, and we have a second one in pipelines, and now that we are working to discuss the terms. So we believe that we can steadily increase. I don't believe there is any easy way to increase AI unicorns in Japan. That's, I believe, our current status, but we would like to make it one step by another.
Next question is from [ Saito-san ] from Nikkan Kogyo Shimbun.
Talking about Japanese startups, what's your view on market environment around Japanese startups? What do you think? There were not so many opportunities in Japan that you wanted to invest in. And in Japan, at the moment, there are not so many venture capitals. And what's your view on that reality?
Thank you for the question. Well, in the U.S., like I mentioned earlier, especially Silicon Valley, whether good or bad, there are a lot of companies or businesses spun out of a big giant successful company like Google. So that kind of rotation or spin out, so that's very dynamic in the U.S. So when a new green shoot comes up in terms of technology, then the talented people will move accordingly. So even a new business or a new startup, very talented, young management are coming in and moving around. In Japan, well, traditionally, workers spend so many years in the same company, so it's, I think, hard for startup to grow in Japan. And talking about venture capital in Japan, they often say that they want to contribute to Japan indirectly, not directly. So they are not hungry for pure investment in Japan. So very competitive environment or entrepreneurs or investors are not so many in Japan. And also, AI technology has not been well used or well known in Japan. So there are a lot of challenges in Japan. Having said that, I begin to see potentials. So once success story is there, I believe that more and more young people want to follow suit. Thank you very much. That is the last question from the Zoom. So thank you very much. That's all for my presentations and answers for your questions. So once blizzard comes, that's also an opportunity. And with no excuse, past 3 months, I will admit -- I admit that the net asset value has declined. So we have ups and downs. But hopefully, we like to keep working hard. And I do have confidence that we can make it happen. So that concludes our announcement for today. Thank you very much.
Thank you. This concludes the SoftBank Group Corp. earnings results announcement for 6-month period ended September 30, 2021. The video footage of this meeting will be distributed on demand from our corporate website. Thank you very much once again for joining the SoftBank Group Corp. earnings results announcement for 6-month period ended September 30, 2021. [Statements in English on this transcript were spoken by an interpreter present on the live call.]