HONG KONG/BEIJING (Reuters) – For the SoftBank Group, Inc., a financial technology company, OneConnect, the initial public OFFERING of a justification of an aggressive China investment strategy.
FILE PHOTO: The logo of SoftBank Group, Corp, is displayed at SoftBank World in 2017 conference to be held in Tokyo, Japan, on July 20, 2017. REUTERS/Issei Kato
Instead, it embarrassed the bankers have had to slash the offering, its size, and the reduction in price, as investors baulked at a new business model is seen to depend on the majority of the owner of Ping An Insurance. The IPO is valued, OneConnect, at $ 3.7 billion, about half of its value in the previous year, when they turned to the Vision of the Fund, the investment of $100 million, and the stock was just at her for the first time on Friday.
OneConnect, Financial, Technology is just one of the many, many, China, betting that the Japanese investment giant, or the giant Vision of a fund that is in trouble. That is, it is added to the global woes to SoftBank CEO, Masayoshi Son, is now under fire for bad judgment and lack of due diligence demonstrated by the U.S. office startup WeWork’s disastrous IPO attempt, and the ensuing search and rescue mission.
At ZhongAn Online P&C Insurance Co. Ltd. until 2017 IPO of the company, for example, SoftBank ploughed in $550 million as a cornerstone investor. However, the deal was seen by some investors as a way overvalued, and now it trades at about half its IPO price.
The private equity portfolio has had a problem. In the Vision Fund will be made in February, an investment of $1.5 billion in Guazi.com the measurement of the second-hand car dealing platform which has more than $9 billion.
However, a $500 million funding round Guazi.com in the first half of the year, not on the ground, people with knowledge of the fundraising said.
The people, who were not authorized to speak to media and declined to be identified, said some investors have found it to be too expensive and were put off by the lack of profit in an industry where turnover decreased.
Guazi.com it said in a statement that, in the discussions on new funds advanced, investors are recorded in the Vision of the Fund and of the other world of investment and the expected profit in the fourth quarter of the year.
In all fairness, should they turned up, many China Ipos have stumbled, hurt by a sharp slowdown in economic growth, and trade tensions with the United States of america.
However, investors and some bankers are looking for China-related deals, say, SoftBank’s involvement, you will have the character of high-potential prospects, is now considered to be a red flag that a company is probably overvalued.
“SoftBank has given a signal that the market has peaked,” said one person involved in the OneConnect IPO of the company.
SoftBank declined to comment on the investment of Chinese companies in this article.
Other big bets, such as the TikTok owner ByteDance and the use of artificial intelligence in business Sensetime to be under threat as a result of the U.S.-china trade dispute. The Vision of the Fund is invested in approximately $1 billion in both of the sources have said.
ByteDance is entangled in a US national security review of the manner in which and the way to deal with the US data of the customer.
Sensetime in October, it was added to the U.S. “entity list,” which bars to buy, AMERICAN parts, AMERICAN approval of the government, over its alleged involvement in human rights violations in China’s Xinjiang province.
Sensetime is countered, he will comply with all applicable laws of the countries in which it operates, and that they are actively involved in the development of a computer code of ethics.
Ride-hailing company is A Chuxing is one of SoftBank, the largest in China-betting that the $11.8 billion invested in, it seemed to have a bright future after the end of the arch-rival Uber have been trafficked into China for a stake in A.
However, the rape and murder of A passenger by her driver has dented the image of the company, and the IPO timetable is still unclear, after the Uber valuation unit.
The Vision of the Fund, which opened a China office this year, led by former Silver Lake managing director Eric Chen. Two of the sources, who are familiar with the operation told Reuters that the pace of hiring for the China team, has been slow, and while SoftBank said the team has grown a lot since March of approximately 20 professionals.
A source said: Chen, had been scaled down to the size of the deals he was looking for, but now with the emphasis on the investment of approximately $50 million to over $200 million to$300 million.
SoftBank declined to comment.
It’s a far cry from just two years ago, when they turned, and the Vision of the Fund, have been on the increase. The son had been killed by an early investment in Alibaba, a stake now worth $140 billion, and the China of the tech business was booming.
Then, the Son’s fondness for splashy controls, to help start-ups grow quickly and rapidly overcome rivals and was in full force as evidenced in a meeting with the Chinese online medical platform for the Ping to be A Good Doctor by the end of 2017, to discuss a pre-IPO fund-raising.
“How much do you want to increase the pre-IPO round, and through the IPO of the company? “The son asked, to be a Good Doctor, a CEO, Wang Tao, according to sources.
Wang told him it would be $300 million and $ 1 billion respectively.
“How can I give you up to $1 billion, and you have to let the trading plan?” Son, he said.
Wang later decided not to take him up on the $1 billion received in lieu of a $400 million-from the point of view of the Fund on a pre-IPO round for a listing in Hong Kong last year.
In contrast, some of SoftBank China investments in stock of progress has been made, and after a rocky start, however, rock-climbing, and, especially, to stay above the IPO price in October.
Reporting by Kane Wu and Julie Zhu in Hong Kong, and Yang, Yingzhi at the Beijing; Additional reporting by Sam Nussey, in Tokyo and Clare Jim in Hong Kong; Writing by Kane, Wu; Editing by Jonathan Weber and Edwina Gibbs