SoftBank Group’s profit plunged in its fiscal Q3 2021 (calendar Q4 2021) on lower Vision Fund gains.

Chairman and CEO Masayoshi Son explained on an earnings call its China investments, which accounted for 32 per cent of net asset value, suffered the biggest losses as regulators cracked down on technology companies.

An investment in Alibaba fell 20 per cent year-on-year: Son noted the stake accounted for 24 per cent of its net asset value, down from a peak of 60 per cent in fiscal Q2 2020.

In a research note, Jefferies analyst Atul Goyal estimated the value of the two Vision Funds’ listed portfolios fell by 20 per cent to 25 per cent in the first nine months of SoftBank’s fiscal year.

Net profit fell from JPY1.2 trillion ($10.4 billion) in fiscal Q3 2020 to JPY29 billion, on revenue of JPY1.6 trillion, up 6 per cent.

Vision Fund 1 and 2 reported investment gains of JPY111.5 billion compared with a record JPY1.4 trillion in fiscal Q3 2020. Its Latin America Funds lost JPY57 billion and the company’s own investments JPY264 billion.

SoftBank yesterday (8 February) abandoned a sale of its chip design business Arm to Nvidia, with the failure to close the deal potentially impacting its overall performance in the quarter.

Revenue from the UK-headquartered unit grew 20.8 per cent to JPY66 billion.