---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 185367
conversation_id: eaec5764-b342-4c1a-9364-5a97108d7842
citations: 5
created: 2026-05-31 20:08:59Z
---

# How does Softbank Group’s valuation compare to peers, and what justifies its premium/discount?

# SoftBank Group (9984 JP) — Valuation vs Peers: Why the Persistent NAV Discount

## 1. Where SoftBank Trades Today: A Holding-Company Valuation, Not a Multiples Story

SoftBank Group is not valued on P/E or EV/EBITDA — it is valued on a **Sum-of-the-Parts (SOTP) / Net Asset Value (NAV) framework**, like other investment holding companies (Berkshire Hathaway, Prosus/Naspers, Investor AB, EXOR, IAC). The defining metric is the **discount to NAV** — i.e., how much cheaper the stock trades vs. the market value of the underlying assets minus net debt.

### CLSA's SOTP framework (current as of 27-Jun-2025)

| Component | Valuation method | Pre-discount value (¥bn) | Per share (¥) |
|---|---|---:|---:|
| ARM | $131bn mkt cap, 89% owned, less margin loan & payables | 15,385 | 10,676 |
| Vision Fund (SVF1/SVF2) | SBG's equity portion, 20% discount on privates | 7,572 | 5,254 |
| SoftBank Corp (9434) | 40% stake, less ¥0.5tn asset-backed finance | 3,797 | 2,635 |
| T-Mobile US | 85.3mn shares less collar | 3,019 | 2,095 |
| Deutsche Telekom | 225mn shares less collar | 400 | 278 |
| Alibaba | 355mn shares, fully offset by ¥3.8tn collar | 0 | 0 |
| Others (NVDA, Symbotic, Lemonade) | Direct holdings | 1,470 | 1,020 |
| **Total Assets** | | **31,643** | **21,957** |
| Adjusted Parent Debt | Incl. ¥1tn extra for Stargate | (6,660) | (4,621) |
| **NAV (pre-discount)** | **24,983** | **17,336** |
| **CLSA TP (30% discount to NAV)** | | **15,490** | **10,749** |

Source: CLSA SOTP table [3].

The **published target of ¥10,749 already bakes in a 30% NAV discount** as CLSA's "fair" level [1][2].

---

## 2. The Discount vs. Holding-Company Peers — Why SoftBank Is the Widest

CLSA's framing: "For various reasons, Softbank trades at a large discount to NAV (currently at over 50%). This looks excessive, and 30% would appear to be more reasonable, but, given its nature as a financial holdings company that takes big technology paradigm shift positions, **some kind of discount will remain**." [5]

Where SoftBank sits in the holding-company landscape (orders of magnitude — exact peer multiples vary intraday):

| Holding company | Typical NAV discount band | Asset mix | Why the discount differs |
|---|---|---|---|
| **SoftBank Group (9984)** | **40–60% (peaked >57% in 1Q FY24)** [11] | Tech, late-stage VC, ARM, OpenAI | Concentrated in volatile tech/AI optionality, opaque privates, leverage, single-decision-maker risk |
| Prosus / Naspers | ~30–40% | Tencent stake + ventures | Listed-stake dominant; partial cross-holding structure |
| Berkshire Hathaway | Often trades at/near or slight premium to BV | Diversified ops + listed equities | Transparent operating cashflows; permanent capital; Buffett premium |
| Investor AB / EXOR | ~15–30% | Listed industrial blue-chips | Stable mature assets, conservative leverage, dividend track record |
| IAC | ~20–35% | Internet operating businesses | Operating cashflow visibility |

**Read-through:** SoftBank's 50%+ discount is **the widest in the credible peer set** — wider than Prosus (a closer structural analogue holding mostly one asset, Tencent), wider than Investor AB (similar holdco but on mature industrials), and dramatically wider than Berkshire (which often trades near NAV given operating cashflow durability).

CLSA's central call is that ~30% is a **defensible "structural floor"** for this category — anything beyond that is excess that should compress on catalysts [5].

---

## 3. The Discount Narrowed Sharply in 2025 — Then Re-Widened

Management itself tracks the gap closely. On the Q1 FY25 earnings call (Aug-2025), CFO Goto stated:

- "SoftBank discount or NAV discount are rather big. The gap between NAV and market cap is around 40%. In fact, until quite recently, it was over 50%, but the gap has been narrowing… as of today, discount is 39.8% for the first time after a long time when we see 30% level of discount." [10]
- A year prior the discount had reached **57%**; by Aug-2025 it had compressed to **~39.8% pro forma** as Arm rallied, OpenAI optionality was priced in, and a ¥330bn buyback completed [11].
- NAV itself climbed to **¥32.4 trillion** (LTV 17%) [10]. By March 2026, pro-forma NAV stood at **¥25.7tn (~$172bn)** per company disclosure [7].

The lesson: discount is mean-reverting, but the reversion is event-driven (asset IPOs, buybacks, communication on strategy) — not a slow, automatic grind tighter.

---

## 4. What Justifies the Discount (Why It Doesn't Go to Zero)

### 4.1 Asset-quality / mark-to-market risk
SoftBank's NAV is dominated by two volatile assets:
- **ARM (~49% of pre-discount gross asset value)** — already-listed but trading on 60–70x earnings; a derating directly compresses NAV [3].
- **Vision Fund private portfolio** — fair-value marks reflect "recent transactions" rather than liquid prices; large historical write-downs on WeWork ($3.5bn cost → 0), DiDi ($12.1bn → $6.0bn), Klarna, Sense Time, Paytm.

### 4.2 Structural leverage at the parent
The annual report discloses **¥12.3tn+ in parent-level liabilities** including ¥8.2tn corporate bonds, ¥4.0tn borrowings, ¥3.2tn ARM margin loans, ¥1.2tn SoftBank Corp margin loans, ¥0.26tn T-Mobile collars, ¥0.8tn prime brokerage loans at SB Northstar [14]. Leverage amplifies NAV moves and adds refinancing/credit risk that pure equity holdings don't carry.

### 4.3 Single decision-maker / capital-allocation risk
Masayoshi Son's "ASI platform" pivot — and the willingness to commit up to **$64.6bn cumulative to OpenAI at a $730bn pre-money** [12] — concentrates idiosyncratic risk in one person's macro tech call. Peers with committees (Berkshire post-Buffett uncertainty aside) or family-governed structures (Investor/EXOR) carry less of this risk premium.

### 4.4 Opacity of privates and tax friction
Vision Fund private valuations are point-in-time fair values, not liquid; minority-interest deductions (e.g., 18% leakage on SVF2 to third-party LPs) [5] and tax-on-realization eat into headline NAV when assets are actually sold.

### 4.5 Conglomerate / capital-recycling drag
Classic conglomerate discount: capital is locked behind a holdco wrapper. Investors who want pure ARM or pure OpenAI exposure can buy listed ARM directly (or eventually OpenAI) without the SoftBank overhead.

---

## 5. What Would Compress the Discount (The Bull Case)

CLSA cites four catalysts [9]:

1. **Buybacks** — ¥330bn program completed in 2025, more likely. Buybacks at >30% NAV discount are immediately accretive to per-share NAV.
2. **New marquee investments / IPO pipeline** — PayPay's Nasdaq IPO in March 2026 [13] is exactly this kind of crystallization event. SVF2 has already booked ¥6.5tn of OpenAI-related gains in FY26 [12].
3. **Better communication on Stargate / AI strategy** — Goto explicitly flagged this: "once that strategy is understood, the discount will be narrowed down" [11].
4. **Improved SVF results** — SVF2 swung to a **$21.8bn cumulative gross gain** (from negative) by March 2026 on the OpenAI revaluation [13]; SVF1 sits at a $24.2bn cumulative gross gain [13].

The asymmetric upside scenario CLSA models: if OpenAI is worth $1tn, SoftBank's 12% stake = $120bn; net of 18% minority interest and a 0–30% discount, that's **$39–69bn for shareholders, or 48–84% of current market cap** — and the SOTP target already assumes only $1.5bn of OpenAI value [4]. The IPO of significant assets (ARM was the precedent) historically pre-narrows the discount [5].

---

## 6. CLSA's Bottom Line on Valuation

- **Rating: High-Conviction Outperform** [4][8]
- **Target Price: ¥10,749** (SOTP-based, 30% NAV discount applied) [1][2][3]
- **Implied view:** the **>50% market discount is excessive vs. the ~30% structural floor**; the gap (~20pp) is what's investable [5]
- ARM modeled at $131bn vs. then-spot $167bn; OpenAI valued at only $1.5bn in the base case — meaning **upside on both anchor assets is not yet in the TP** [8]

---

## 7. Synthesis: Premium or Discount?

SoftBank trades at a **discount, not a premium** — and a wider discount than any reasonable peer in the listed holding-company universe.

The discount is **justified by ~30pp of structural drag** (volatile assets, parent leverage, KMR/Son concentration, private-asset opacity, tax friction) — this is what CLSA assumes as the "fair" level [1][2]. The discount is **excessive by ~20–30pp** at current levels (50–60%) [5][6] because the market is not yet crediting:
- OpenAI's marked-up value (now $730bn pre-money on the 2026 round) [12]
- Realized SVF2 gains turning the fund cumulatively positive [13]
- ARM upside vs. CLSA's $131bn modeling assumption [8]
- Buyback optionality and a maturing IPO pipeline (PayPay done; more to come) [9][13]

In other words: the **premium SoftBank does NOT trade at** vs. Berkshire/Investor AB reflects the real risks of running a tech-VC holding company with leverage and single-key-person risk. The **discount it DOES trade at vs. Prosus** is opportunity — if (and only if) the catalysts above land.

---

**Sources**
[1] Softbank Group — HC O-PF (A vision of ASI) — CLSA (27-Jun-2025) — 607962937LinqAlpha.PDF
[2] Softbank Group — HC O-PF (A vision of ASI) — CLSA (27-Jun-2025) — 607962937LinqAlpha.PDF (Investment thesis)
[3] Softbank Group — HC O-PF (A vision of ASI) — CLSA (27-Jun-2025) — 607962937LinqAlpha.PDF (SOTP table)
[4] Softbank Group — HC O-PF (If OpenAI is worth US$1tn…) — CLSA (13-Jun-2025) — 607961957LinqAlpha.PDF
[5] Softbank Group — HC O-PF (If OpenAI is worth US$1tn…) — CLSA (13-Jun-2025) — 607961957LinqAlpha.PDF (discount excess vs. structural floor)
[6] Softbank Group — HC O-PF (AI push) — CLSA (1-Jun-2025) — 607960933LinqAlpha.PDF (c.60% discount currently)
[7] Softbank Group — HC O-PF (AI push) — CLSA (1-Jun-2025) — 607960933LinqAlpha.PDF (Historical NAV / ¥25.7tn pro forma)
[8] Softbank Group — HC O-PF (A vision of ASI) — CLSA (27-Jun-2025) — 607962937LinqAlpha.PDF (ARM at $131bn vs. $167bn; OpenAI not in TP)
[9] Softbank Group — HC O-PF (AI push) — CLSA (1-Jun-2025) — 607960933LinqAlpha.PDF (catalysts)
[10] SoftBank Group Corp., Q1 2025 Earnings Call, 7-Aug-2025 (NAV ¥32.4tn, discount 39.8%)
[11] SoftBank Group Corp., Q1 2025 Earnings Call, 7-Aug-2025 (last year 57%, pro forma 39.8%)
[12] SoftBank Group Corp., FY-ending-Mar-2026 Consolidated Financial Report (OpenAI cumulative $64.6bn ≈ 13%; $730bn pre-money)
[13] SoftBank Group Corp., FY-ending-Mar-2026 Consolidated Financial Report (SVF1 $24.2bn gain; SVF2 $21.8bn cumulative gain)
[14] SoftBank Group Corp., FY-ending-Mar-2026 Consolidated Financial Report (parent borrowings, ARM margin loans, T-Mobile collars)

## Citations

- [10] **SoftBank Group Corp., Q1 2025 Earnings Call, 7-August-2025 3** · external
- [11] **SoftBank Group Corp., Q1 2025 Earnings Call, 7-August-2025 3** · external
- [12] **SoftBank Group Corp., Q4 2026 Report** · external
- [13] **SoftBank Group Corp., Q4 2026 Report** · external
- [14] **SoftBank Group Corp., Q4 2026 Report** · external

