Status of Implementation of Share Price-Conscious Management

As a strategic investment holding company, our goal is to maximize corporate value through sustained growth in NAV (net asset value, calculated as equity value of holdings – adjusted net interest-bearing debt). To increase NAV, we focus on investing in carefully selected companies within the AI investment theme, enhancing the equity value of these companies, exiting investments at opportune times, and investing in new companies with high growth potential by leveraging funds recovered from exits. Strategic investments that offer added value through deep management involvement are expected to be made by SoftBank Group Corp. or its wholly owned subsidiaries, while other investments will be channeled through SoftBank Vision Funds.^*1 When making investment decisions for any of these types of investments, we comprehensively evaluate the potential to generate adequate investment returns, considering factors such as market size, competitive landscape, business model, business strategies, and the management team’s enthusiasm and talent.

We consider NAV, which reflects our fair net asset value as a strategic investment holding company, to be the best indicator for gauging our enterprise value, rather than consolidated net assets or indicators based on periodic profit or loss. We believe that comparing our NAV to our market capitalization provides the appropriate perspective for market assessment. NAV can be thought of as our liquidation value, and theoretically, a company’s market capitalization as a going concern should be expected to exceed NAV (before taxes). However, we have been experiencing a persistent “NAV discount” in recent years, where our market capitalization remains significantly below our NAV. This discount is attributable to several factors: (1) our growth story and future investment strategy are obscured to shareholders and other investors; (2) the weak investment performance of our portfolio, particularly that of SoftBank Vision Funds, and the unclear valuation of private assets; and (3) shareholders and other investors find us “difficult to understand” due to the complexity of our diverse investment assets, group structure, and fund procurement methods.

We are currently prioritizing growth investments based on our belief that maximizing NAV in the medium to long term best serves our shareholders’ interests. The evolution and widespread adoption of AI are expected to expand markets and create new industries. By steadily executing investments that capture these burgeoning opportunities and enhancing the value of our portfolio companies, we seek to increase the value of our equity holdings, thereby expanding our NAV and making our growth story more visible to shareholders and investors. Additionally, as our portfolio evolves and NAV expands through new investments and value enhancement of existing investments, we will appropriately allocate the recovered funds to new investments, shareholder returns, and financial improvements. We believe this approach will ultimately reduce the NAV discount in the future.

As part of our shareholder return strategy, we have repurchased a total of JPY 4.5 trillion in shares since the fiscal year ended March 31, 2019. Moving forward, we will continue to conduct share repurchases flexibly, while adhering to our financial policies regarding LTV and cash position and taking into account factors such as investment opportunities for sustained growth and the extent of NAV discount.

Furthermore, we will continue to actively engage in thorough dialogues with shareholders and other investors to foster understanding and address inquiries, as well as to further refine our disclosure materials.