SoftBank Group Corp. (9984) Earnings Call Transcript & Summary

[Interpreted] Thank you very much for waiting. Good morning, everyone. Now we would like to start SoftBank Group Corp. investors briefing on earnings results for the 6 months period ended September 30, 2020. I would like to introduce the representatives from SoftBank. First, Mr. Goto, Board Director, Corporate Officer, Senior Vice President and CFO; Ms. Kimiwada, Corporate Officer, Senior Vice President and Head of Accounting; Mr. Navneet Govil, Managing Partner and CFO of SoftBank Investment Advisers from the United States. This session starts with overview about consolidated results by Ms. Kimiwada and financial update by Mr. Goto, followed by SoftBank Vision Fund update by Mr. Navneet Govil. You can choose either English or Japanese for this meeting, and we can take both English and Japanese questions within Zoom after the presentation. Materials for today is available at our corporate website.

[Interpreted] My name is Kimiwada. Let me start this presentation from accounting perspective, please take a look at Page 2. This shows consolidated results, which we announced the day before yesterday. As you know, net sales, mostly from sales of SoftBank KK was SBKK's earnings. Last year, we had some things from Sprint, but sales from earning from Sprint and Brightstar were gone. And income before income and tax JPY 1.4 trillion; net income, JPY 1.8 trillion that was reported earlier. And for your reference, total gain on investments at the bottom. For the second quarter, we recorded over JPY 2 trillion of total gain on investments. Moving on to Slide 3, please. Change in reportable segments. And from first quarter, we had a new segment investment business of holding companies, as you know. And in second quarter, Brightstar segment was removed, and name was changed from SoftBank Vision Fund and Other SBIA-Managed Funds to SVF1 and Other SBIA-Managed Funds. And SVF2 is now included in this segment. Moving on to Page 4, please. In the second quarter, we had a significant event, which is sales of all shares in Arm. And what kind of impact this could have on consolidated sales is shown here. About the transaction overview, you are, I'm sure, aware of that. But just to remind you, in September, we agreed to sell all of Arm shares to NVIDIA. And after the deal is closed, we would have approximately 6.7% to 8.1% of NVIDIA shares. We don't know how long it takes, whether 18 months or 24 months. This is how it will look. And further upside can be enjoyed at the largest shareholder when the share price goes higher because NVIDIA shares are listed. From transaction value perspective, if you see the breakdown with regards to JPY 12 billion is cash. Cash we already received cash and/or we will receive at the time of closing. And as you know, for Arm, SoftBank Vision Fund owns 25% and SoftBank Group owns about 75% of Arm. And on consolidated basis, 100%. That's why we treat Arm as subsidiary. But depending on the ratio, the consideration will be received by each party. 21.5% plus alpha is the shares of NVIDIA that we are going to receive, $484 per share was agreed when we signed the deal. At the time of closing, of course, share price might be different from this set price. So that's why we put plus/minus alpha of $21.5 billion as a transaction value, earn-out up to $5 billion plus/minus alpha. Although we set a target value, when target is received, we can expect this, either physical stocks or cash we would receive when certain performance target is met. So total $38.5 billion plus/minus alpha will be consideration for the company. Moving on to next page, please. So again, in September, agreement was signed. And from accounting perspective, of course, Arm remains a subsidiary still, and we treat Arm as continuing operations until closing. We expect about 18 months and we need all regulatory approvals. That's why it's too early to classify it as discontinued operations. So Arm remains continuing operations in this quarter. And when it's highly likely that closing will take place, then Arm will be reclassified as discontinued operations. Now from accounting perspective. In Q2, again, Arm is continuing operations. So we take 100% of Arm's performance. And while Arm remains subsidiary, we continue carrying out impairment test on goodwill. From SoftBank Vision Fund segment perspective, change in valuation of Arm shares held by SVF1 is recorded. So in the segment, it shows a positive, but from consolidated accounts perspective, that uplift will be eliminated. And once Arm is classified as discontinued operations, it will be measured at fair value or carrying amount, whichever is lower when assets and liabilities are classified as disposable group held for sale. On closing, the difference between the consideration and carrying amount will be recorded as gain relating to loss of control under net income from discontinued operation. But again, like I said earlier, we should expect 18 months or 24 months before the deal is closed. After deconsolidation NVIDIA shares to be received will be recorded as financial assets at FVTPL, where these changes in fair value will be recognized as net income or loss. That's for Arm. And moving on to Page 6, please. This is talking about accounting treatment for partial sales of SBKK shares and after-tax cash proceeds. We did sell SBKK shares before. So what we have done this time is, in principle, the same. SBKK remains consolidated subsidiary, and we still owns control of SBKK. So from accounting perspective, after the sales of SBKK shares, a gain from a sale is not reflected on the consolidated basis because SoftBank KK continues to be a subsidiary of the company, which is under our control. In May and September, we sold a total 1.27 billion shares of SBKK and received a total of JPY 1.5 trillion. SoftBank Japan Group owned KK shares. And loss carried forward, that can be applied to a gain from sales of SBKK is presented in a red portion 256 and gain on sale is recognized directly as capital surplus. That's it for partial sale of SBKK shares. Moving on to Page 7, please. Conclusion of prepaid forward contracts using Alibaba shares. Like we kept explaining for some time, this is how we view forward contract using Alibaba shares. But if you move on to Page 8, please, in October, after the second quarter was closed, cap and floor for the price of shares for the contract entered into April 2020 were revised. And some impacts we have to recognize from PL perspective. We recognized tax effect of JPY 186 billion on increase of derivatives, which is currently expected. But this deferred tax expenses can be recouped as Alibaba share price goes up going forward. And moving forward, Page 9, segment income, investment business of holding companies. In the first quarter, asset management subsidiaries were not included in investment business of holding companies. Asset management company was established in the second quarter. And that asset management subsidiary are investing in listed stocks. And again, on Page 9, if you take a look at dotted blue box, it shows performance of asset management subsidiaries. And you can take a look at financial report to be released pretty soon. So the performance of asset management subsidiaries will be presented like this going forward. And moving on to Page 10, please. Investment business of holding company segment. Just to remind you, so companies are involved in that is SBG, SBGC, SBGJ and SB Northstar. SBGC stands for SB Group Capital Limited. That's a subsidiary in Japan -- excuse me, Europe. And SoftBank Group Japan is in Japan, and it's like a holding company. And SB Northstar is, effectively, the asset management company. And also, this diagram shows what they are doing. Approximately 120 companies are under the umbrella of subsidiaries, and SB Northstar is doing transactions of listed stocks. And as you know, Masa Son owns 33% of this [indiscernible]. And Page 11, please. The reason why we show this is because, again, SBG did invest in stock -- listed stocks. And in the second quarter, this asset management company or Northstar was established. But still in second quarter, some investments were done by SBG in listed stocks. So again, both SBG and SB Northstar invest in listed stocks. But in terms of SB Northstar, its business is different from SBG. So how this SB Northstar's performance is reflected in financial reports are different. They've got separate BS, and they've got a separate PL, so that you can see clearly the difference between SBG and SB Northstar. For cash flow, when SBG did investment in listed stocks, when they bought stocks, the growth was reflected in investment activities. And from SB Northstar's perspective, it's operating activities, not investing activities. So that's why net amount is reflected in cash flow from operating activity. And Page 12 shows main impact on BS and PL for SBG and SB Northstar. The relevant information is shown in the financial reports as well. Moving on to Page 13, please. Price sensitivity of derivatives at SB Northstar. For sensitivity analysis and risk management, please take a look at the quarterly report that will be released day after tomorrow. And please take a look at Page 14 now, consolidated PL summary. By the segment and by the topics, we put some notes on the right-hand side. For discontinued operations, at the bottom of this table, about JPY 710 billion recorded in net income from this discontinued operations. This is talking about Sprint. So it accounts for a large part of net income, which is JPY 1.8 trillion. Moving on to Page 15, that's the balance sheet. Number one is the balance that asset management companies have. And Page 16 shows liabilities. Please take a look at that later. And Page 17 is from capital perspective. And number two is treasury stock, which reflects our share buyback. And Page 18 is cash flow. And like I said earlier, Northstar's -- SB Northstar's cash flow is shown in net and cash flow from operating activities line. And next slide, Page 19, segment income SVF1 and other SBIA Management fund. And the gain from Arm sales is included in this segment income. JPY 74.9 billion is included in segment income. But from a consolidated account perspective, that's eliminated, like I said in the beginning. That's all for my part. Thank you very much.

[Interpreted] Next, Mr. Goto will give you the financial update. Mr. Goto, please.

[Interpreted] Yes. Thank you very much. This is Goto speaking from SoftBank Group. Good morning, everyone, and thank you very much for joining today's meeting. So the day before yesterday, we had an earnings results announcement, and Masayoshi, Chairman and CEO, explained about our strategy as long as possible. In there, he picked up the keywords several times, which was AI revolution and the investment into AI revolution companies. Our corporate philosophy is information revolution, happiness for everyone. And based on that philosophy, we've been keep using this word information revolution. So whenever, we explained our strategy for the past 40 years that we've been using this information revolution. But starting from this year, actually, information revolution is now replaced by AI revolution, and we will be using this word for our strategy going forward, I believe. But 40 years ago, when we say information revolution, people didn't really understand what the information revolution is. They can have some image, but they cannot exactly understand what does impact to your daily life, what does impact to your financials. Right now, when you hear AI, I believe that's something similar to what has happened 40 years ago. When you hear the word AI, people may have some kind of rough image or some various ideas. However, when it comes to more specific, what will be the company that's driving this AI, which is not clear, and we don't know because it's not decided yet. People actually exploring which company will be driving this AI revolution. 40 years ago, when we talk about the information revolution, probably, that was also the same. And also about 20, 25 years ago, back in '90s, when we start seeing the Internet revolution and the people didn't have a clear understanding of Internet and also how can we utilize this Internet for the business or daily life. So that took about 5 to 10 years to start really understanding what was Internet. So when we hear, and I think that when -- your biggest question is what is SoftBank? What are we doing? And I believe that's something that you'll be able to understand to some extent from the presentation the day before yesterday by Masa. We will continuously communicate and explain as much as possible what the SoftBank is so that you'll be able to deepen your understanding of our company and business. Now coming back to financials. Now page -- first page, JPY 4.5 trillion program. This is a summary for JPY 4.5 trillion -- second quarter 2020, which is almost equals to the progress of JPY 4.5 trillion program. And with this program, which was started about the March this year, which was just about expanding the COVID-19 influence, and the business has been damaged everywhere in the global market and we have also suffered as well. Since then, we aimed for a steadiness of our financials, and at the same time, try to achieve this JPY 4.5 trillion in which we were able to achieve in 6 months. So during the execution of this program, especially for this second quarter 3 months, SoftBank Corp. shares public offering, which was the largest offering, and JPY 1.2 trillion was monetized, which was quite a big financial event for this quarter. In asset status, it's about JPY 30 trillion level, and you see -- you'll be able to see that. In short-term period, we see some ups and downs, but I don't want you to focus too much on the short-term period, and we would like to keep the big direction for the strategy. And also this securities investment, this is for the diversification of our assets and also the management of our excess cash. And we have done some management of that. And also, private equity investment -- Vision Fund, which is our core business, from Vision Fund 1 and Vision Fund 2 in total, we have some IPO events as well from investees. So JPY 1.1 trillion gain is aimed. And the group balance sheet wise, with this JPY 4.5 trillion program, of course, we will be positively contributing to our balance sheet. And as we promised for this proceed, we will be returning to the shareholders and also returning to the debt investors. Those are the purpose of the proceed. So about JPY 0.6 trillion for shareholder return and also JPY 1.5 trillion for debt reduction, that has been realized. And as our key indicator, those 2 financial policies we would like to maintain, which is loan to value managing, and we are currently 11.8%, which is very safety level and JPY 2.4 trillion cash position so that we have secured -- we are secured or even more secured of the cash position for the 2 years debt redemption equivalence. Going to Page 4 and on, I would like to explain a little bit more detail. Our share price and also credit spread, which is CDS, both are with this JPY 4.5 trillion successful progress, I believe that being reflected to these share price and credit spreads. So the equity market and the debt market has been receiving quite well. Page 5, JPY 4.5 trillion program, and the purpose of the proceeds, we have not changed at all that we would like to follow our commitment. And for the shareholders return, JPY 2 trillion out of JPY 4.5 trillion goes to return to shareholders and also JPY 500 billion, which has already been announced at the share buyback, so that in total, JPY 2.5 trillion share buyback is planned. And also remaining goes to financial improvements, which includes debt repayments, bond buyback and cash reserves. Page 6. This is the final phase for JPY 4.5 trillion program. So in total, we have already raised our monetized JPY 5.6 trillion financing utilizing Alibaba share, which has already explained to you at the first quarter, T-Mobile is also explained to you. SoftBank Corp., SoftBank KK, about JPY 14.4 billion. We had a broad trade transaction happened in May and also public offering in September. In total, it's about JPY 1.2 trillion level. And Page 7, public offering of SoftBank Corp. shares. Since the launch of the mobile operation business was started from the Vodafone KK's acquisition back then, we have put quite a heavy leverage on. So back then, the equity we provided was JPY 200 billion. And this became and grow -- grew to JPY 6.1 trillion. I believe this is the -- how we see the IRR and also the track record of our transaction. We have already monetized some of this JPY 6.1 trillion, including the -- at the time of initial public offering, JPY 3.8 trillion has been monetized so far from this business. For your reference, dividend is quite a large amount as well from this SoftBank Corp., about JPY 3.4 trillion. So as a cumulative dividend received, this is quite a large number, as a matter of fact. And Page 8, debt reduction. Total JPY 1.5 trillion debt reduction has already been made. And domestic bond buyback was about JPY 170 billion. And also offer wise, JPY 200 billion offer was provided for buyback of domestic bond and retail investors feedback was about JPY 170 billion. So how should we look at this? For us, I believe, this was very great feedback. And because we've been issuing quite a large number of retail bonds and many retail investors are buying our bonds. And somehow, I don't know why, but we sometimes receive the criticism that we are not putting too much focus on retail investors, and we are not caring too much about retail investors, which is not true at all. But we do receive such opinions. So for the confirmation with market, I believe this was a good event, good opportunities for securities fund. The feedback we've been receiving from retail investors was that the majority of those investors are very much satisfied with our yield and so on. Therefore, going forward, we would like to steadily access to retail investors market and providing the instrument for them. Right now, we have outstanding of over JPY 3 trillion, and that's something that we would like to provide the middle range return to retail investors, and that's the market that we have created so far. And as for Alibaba margin loan, margin loan has been repaid, JPY 1 trillion. And also, bank loans -- senior loans from banks, about JPY 300 billion has been paid before maturity. So JPY 1.5 trillion debt reduction in total. Actually, it's not all necessarily that we will keep reducing our debt, but we have a target at the end of March. So at the time of March end, we would like to see the lower market and the credit market. In total, about JPY 1 trillion level of repay is something that we would like to show to the market. So for the subsequent event wise, margin loan for SoftBank Group, we have fully repaid JPY 1 trillion. But our partial of Alibaba share, which I will be touching on later, that has been lent to SB Northstar. And the JPY 600 billion margin loan has been raised at Northstar level. And that we will be fully explained at our year-end report. But net-net, over JPY 1 trillion debt reduction has been already achieved, which I wanted to update you today. Page 9, return to shareholders. As a result, shareholder value per share has been improving quite steadily, and I believe we have confirmed that as well. Share buyback numbers wise, we do have a threshold of JPY 2.5 trillion, of which JPY 4.5 trillion will be coming from JPY 2 trillion. So in total, JPY 2.5 trillion authorized amount. And at the end of September, we have JPY 1.2 trillion which repurchased so far. We are looking at around -- the period we're looking at around the end of July or so next year. Of course, it depends on the market. We may accelerate. We may delay a little bit as well. So -- but either way, we would like to most effectively manage this share buyback so that we would like to be very careful about the operation of this share buyback. And on your right-hand side, you see the share price performance, and this is quite a good trend and outperforming to other competitors or peers. Page 10, another return to shareholders, which is dividend. In the beginning of this fiscal year, because of the very tough and challenging situation due to COVID-19 and also last year's close, which we recorded the biggest loss so that the dividend was to be decided, that was the announcement we made at the beginning of this fiscal year, but 6 months later and seeing the performance of our financials, it has been very steady. And at the same time, although that we've been very concerned about the financial market due to COVID-19, actually, it was even more bullish than we expected. Therefore, at the Board of Directors meeting level, we had quite an intense discussion on dividends so that we would like to maintain the same level dividend, which is JPY 22 per share as an interim dividend. Page 11. JPY 4.5 trillion program. Once again, I would like to recap. Monetization completed. And any excess monetized amount, how are we going to do? That I would like to take a good balance of financial balance. And at the same time, we have 3 ways purpose of use: a new investment, shareholders' return or debt reduction. So those are the 3 main purpose of proceeds that we would like to discuss at the Board of Directors meeting, take a well balance and decide how we're going to use those excess of this JPY 4.5 trillion. Page 12. This is a result from the JPY 4.5 trillion program. As you see LTV, the loan to value is the most important KPI that we are looking at. Right now, it's 11.8%. Our threshold financial policy is to manage loan to value less than 25%. And usually, we've been -- traditionally, we've been using 20% or so, but we have improved largely this time so that the safetiness has or even improved, which I believe is more comfort to the investors. Status of asset on Page 14. Currently, about JPY 30 trillion or so. The proportion of Alibaba is still quite heavy. Especially, in the past 3 months, Alibaba share, only for 3 months, trend-wise, it's been growing quite dramatically in terms of share price. Then also, if you look at the super long period wise and finance IPO has been postponed or several feedback from Chinese government and so on, there are uneasiness has been also seen in the market. But we've been holding this Alibaba share for past 20 years. And the growth of this 20 years history of Alibaba share that we'll be working together with them. And we would like to monitor and also convinced that mid- to long-term growth of Alibaba as well. We are the strongest believer of Alibaba so that we are looking forward to see the good return of shareholders from this business. But at the same time, understanding that the high share price of Alibaba, that as an investment company, we need to explore the best way or best mix of asset financing. Hopefully, that we would like to diversify our assets, which is also the feedback that we are receiving from investors and rating agencies as well. So that's why that we are increasing our investments in these securities for the diversification point of view. On Page 15, this is the trend of the share price of those that we hold. Alibaba shares, T-Mobile shares, SB Corp., they are all doing quite smoothly and well, although the COVID situation going on. The domestic telecom SoftBank Corp. is a little bit difficult because of the big discussion going on in the market, but still that they are doing quite steady as well. Page 16. Alibaba share, which is one of the representative shares of tech share looking at the market cap listing, it's taking -- maintaining good momentum as well. Now that I would like to talk about Vision Fund a little bit on Page 17. One time in the past, an investee of Vision Fund has also received a challenge from COVID-19. I also mentioned this at that time that out of the 100 companies that we've been investing from Vision Fund, so that thesis wise, IT, AI, those are the investment agenda, but those companies that utilizing the IT and AI to provide the service 360 degree, which means that this is kind of the one small world that represents the real situation as well, so that we cannot avoid the challenge from the COVID-19. So looking at the 6 months since April, recovery speed wise was quite soon, and we are so happy to see quite a good recovery since -- although the COVID situation. So Vision Fund 1, JPY 82.7 billion has grown to JPY 90.1 billion. Vision Fund 2, although we just launched this Vision Fund 2, but the investment cost, JPY 2.6 billion, and the gross return, JPY 7.6 billion. So this is also the happy news as well. As a result, on Page 18, total gain and loss on investment by quarter basis, 2019 that we suffered a lot in a quarterly basis, but the latest second quarter, JPY 1.1 trillion. So this is the biggest level of the gain and loss. So that -- but still, we have a funds period remaining so that we would like to monitor and also support those investees during this time. Page 19. This is the sale of shares in Arm to NVIDIA. As Ms. Kimiwada mentioned earlier, so that I don't go too much detail, but the total transaction value is up to $40 billion, which is quite a large transaction that we are able to complete. This is the sales in acquiring, so it looks like selling, but it's also buying to some extent. Actually, this is buying, as a matter of fact, we are buying NVIDIA share. So about 60% of $40 billion is something that the rights we have for -- to exchange the NVIDIA share. So NVIDIA is aiming for AI revolution. And this, I believe, NVIDIA is now that running -- taking a leading position of this AI revolution right now. And also, most important company to support this AI revolution is Arm. So these 2 companies getting together to develop the business. And we will be the leading -- we can take a leading position of the shareholders for this company combined. So that the other day at the SoftBank World, Masa and Jensen, CEO of NVIDIA has a fireside chat, and I believe that some of you have seen that, which was very exciting dialogue, a very exciting chat, a fireside chat. So this also gives us great possibilities of having this NVIDIA shares in the future. So JPY 4 trillion, JPY 5 trillion acquisition occurred, usually, the company's share price goes down. But actually, this is increasing, although the acquisition announcement was made. Page 20. These are the strengths of SBG's portfolio. So if you see the pie chart, Alibaba, 60%. Of course, again, we are depending -- dependency on Alibaba is still heavy. But as you can see, Alibaba is not the only business they are running. They are actually running several business underneath of Alibaba. So when you make any decision in investment, diversification of investment is one of the agenda as well. I believe that the rating agencies metrics wise, diversification is one important KPI. But when you see Alibaba, because we invest in Alibaba, if there is any share price decline in Alibaba, then that Alibaba share will go down as well. So if a proportion of Alibaba goes down, it looks like we diversify, but that's not always a good thing for us either. And also, Alibaba is originally a private company. So from private company to a public company, this orange portion became larger. So when you go public, if you have a larger proportion,and you criticize your proportion is biased, but that's not really the right discussion, and I would like to communicate that with the investors and rating agencies continuously on this Alibaba issue. Page 21 and on, this is the investment in securities and other instruments and overview of asset management subsidiaries. This asset management subsidiary, we have 2 entities. Actually, we have more, but mainly these 2, one is fund and also the other is a manager company. So fund is the SB Northstar LP and located at Cayman. In the -- this invested by SBG and Masa Son. In total, JPY 555 million capital, ownership is 67%, and Masa owns 33%. Fund life is long same as Vision Fund, 12 years plus 2 years extension. In the -- and we also have SB Management Limited as a manager company, this is located at Abu Dhabi. And the CEO is served by Akshay Naheta, and capital structure is SBG 100%. So that investment decisions are made by Investment Committee consisting 3 members. And also, we have an operating team to comprehensively check the risk management. Page 22. This is securities investments or the asset management company's purpose. We have 2. One is diversification of assets; and the second is the management of excess cash or surplus funds. And also management policy wise, we have 3 agenda. Investment thesis, as you saw, the Masa's presentation the day before yesterday, we would like to proceed the AI revolution as a SoftBank Group, in the class of #1 strategy. We would like to invest in those companies that can work together with us towards such vision. So I'm using investing in vision here so that those companies that can lead and drive AI revolution, those are the company that we would like to invest and also developing or the business models for such revolution. And also the primarily in high-quality, highly liquid listed securities in global tech sectors, which means that we can monetize relatively easily. So managing our surplus funds means we are managing or investing in such listed security is close to liquidity. And also, we would like to enhance effectiveness of our management so that in necessary basis that we would like to utilize derivatives as well. Page 23. This is the cumulative quarterly basis, starting with SoftBank Group's money first, so that JPY 263 billion valuation gain and utilized gain was recorded. At that time, market was pretty good. And after then that we launched SB Northstar in total valuation gain and loss and the realized gain and loss was JPY 103 billion negative. But SB -- SoftBank Group's ownership is 2/3, so that it was almost back to 0 from our point of view. And this investment business, first 6 months, we had some trials and errors for the long period of investing over 10 years. Page 24. This is as of the end of September numbers. And we are disclosing these numbers at 13F in United States, and we give you a chart to see some. Of course, some ups and downs, but largely that it's almost quite similar to what you saw in the previous case. Page 25 is the option status. So $4.7 billion for the long call option and also $1.3 billion in short call options. So net-net, USD 3.4 billion is the investment cost fair value. Risk is within this area. And the notionals, for long call $72 billion, short call, $47 billion. So this is a notional principle. Of course, notional is always big. But we don't have any obligation to execute so that I do believe that you have some concern for the huge obligation for such a huge number of notionals. If that's the case, of course, I understand your concern. However, our case is very limited for our risk. So that's something that I hope you can have some comfortable understanding here, and that's our management strategy. Page 26. Risk management status of this fund. All the investments has to be approved at IC of Northstar and also follow the risk management policy and having CRO, Chief Risk Officer, checking liquidity's, counterparty exposure, daily P&L, and market risk, that to be explain in KPI and based on their rules that they are making decisions. And that's the daily base screening to execute the actual management of investments. And that's the asset management company. Now go to financial condition of SoftBank Group on Page 28. Two agenda: one is loan to value, JPY 4.5 trillion program progressed compared to March end. We've been improving the loan to value largely. So from 17% to 11%, considering our size of business, that's a dramatical improvement for loan to value. On Page 29, cash position. JPY 2.4 trillion in conservative view. Over 2 years, debt redemption is JPY 1.4 trillion. So we have over 3 years equivalent of debt redemption amount. Page 30 is interest-bearing debt. Again, making a smooth reduction. And you can see the breakdown on your right-hand side. In Page 31, cash position. JPY 2.4 trillion cash position, the dark blue, to JPY 6.6 trillion, that's your cash position in conservative view. On top of that, you see the light blue portion, this is in Northstar. Because this is security invested by Northstar is high liquidity, we can liquidate or monetize whenever we wish to do so. So we could say -- we could call it that we have JPY 4.6 trillion equivalent of cash position. On Page 32, net interest-bearing debt, cash, debt -- excuse me, cash position and the debt. Net interest-bearing debt is here shown. So based on this, we're calculating loan-to-value calculation. And from the sense, our safetiness is very high. Bond redemption schedule, as you see on Page 33. Next year on fiscal '21, subordinated loan in domestic or high domestic bond is expected to redeemed. So that either we are basically considering the refinancing using a similar type of products or instrument. That is all for the financial conditions. And the financial strategy wise, we haven't changed at all on Page 35. We would like to be flexible or because of this current situation, I believe flexibility is also very important. And at the same time, we would like to make a swift decision-making dynamically. That will give us the swift management as well. On Page 36, these 3 points of financial policy, no change, loan to value, cash position balance. Those 2 -- there are those 3, but the top 2 is the most important KPI for us. On Page 37, portfolio company finance to be self financed, no risky package. Once again here that I would like to confirm with you. On Page 38, agile financial management that we've been doing. Usually, we always focus on financial discussions. But today, that I would like to have a little bit more time to talk about ESG initiatives of SoftBank. Please take a look at Page 40, please. SBG's approach to ESG. So how market views us, how the general public views us from SBG's approach to ESG perspective. And Masa and our company have been working on ESG with passions, but how we present, how we communicate what we are doing might be different from other companies. What we want to do is to deliver what's needed now as soon as possible to people. That's what we want to do. So depending on times, we may have different focuses. But point is what's needed most by the society is usually something that nobody has done. And there needs an engine, if you will, to drive the effort forward. And that's what we want to do. And we want to establish teams and organization to encourage those efforts. And in fact, I am appointed as Chief Sustainability Officer, so as such by welcoming a lot of feedback. I work with Masa to deliver our efforts to ESG and communicate. And let me show you some examples. Page 41, please. As an SBG Group, earlier than other companies, we started working on renewable energy, as you may all know. Right after March 11 took place, we started working on renewable energy. And again, much quicker than others, we developed sites for renewable energy and renegotiated the government. And we believe that we created a trend. And after the Paris Agreement, a lot of parties have started -- joined those efforts. And we have been really delivering the results. And then on Page 42, we're talking about social initiatives. And as you know, with COVID-19, a lot of people have suffered. And we -- what we have to do, we thought was to protect frontline workers. And specifically, what we did was to provide PPE, for example, facial mask and rubber gloves and face shields. And also since may or sometime around that, we were unsure what real situation was in terms of infection. So we started donated antibody testing kits. And since June, we realized that there is an increased need for PCR testing. So we start a PCR testing center. And usually, it costs you JPY 20,000, JPY 30,000 per test, but the test needs to be continued more frequently. So what the do is to help testing from expenses perspective, and what we have done this year, it's easy for you to criticize what we do or we don't do. But usually, people who criticize others don't do anything at all. So without being afraid of any negative feedback or criticism. We believe what we needed to do -- we did what we believe we needed to do. That's what we have done this year from COVID-19 responses perspective. And as you know, you may measure us by applying certain ratings. But what we want to do, again, is to do what and address what is really needed by the society. Page 43, we established SB Opportunity Fund. This is the largest venture fund dedicated solely to underrepresented racial minorities in the U.S. And Page 44 is talking about Emerge Program. This is targeting underrepresented founders of diverse races. And we already invested in 12 companies. And we take advantage of our ecosystem to support those founders. Page 45, Arm. Simprints is what we do as a contribution by using Arm technology, and this is for reducing disparity. There are a lot of people out there who can't verify ID, and this Simprints is a mechanism that allows people to use fingerprint as ID. In Page 44. Also reducing digital divide is important topic. And by using our technology and products, we want to develop IT professionals. From the governance perspective, Page 47, please? Maybe you are more interested in this than other areas. We have been working hard to enhance transparency in the governance area. I know that we have more to do. But for example, we established Nomination and Remuneration Committee. We also diversified board membership. We introduced governance guideline for investment. We appointed a CRO, and we enhanced disclosure. And there are correct information, right information, wrong information in the government -- sorry, in media, and we need to make sure that our communication is not misleading to investors and shareholders. And last but not the least, on Page 48, we announced new Board directors and new corporate officers. Now we reduced the number of Board members to 9 from 13. And now the ratio of external directors is top-ranked among the companies listed on the first section of Tokyo Stock Exchange. And the corporate officers will continue working on their respective areas. As a Board, we make sure that they take responsibility for oversight of the execution of the business. Thank you very much.

[Interpreted] Last but not least, we would like to invite Mr. Navneet Govil, our Managing Partner, CFO of SoftBank Investment Advisers, to give you an update on SoftBank Vision Fund. As CFO of SoftBank Vision Fund, he will explain about the accounting and structure of Vision Fund. Navneet, please unmute and start your presentation.

Hello, everyone. Before we begin, please read SBIA legal disclaimers on Slides 2 and 3. Please refer to the online presentation for more detail. Today, as you'll see on Slide 4, I'll summarize our second fiscal quarter performance and discuss our key highlights for the 3 months ended September 30. I'll then discuss the financial impact of Fund 1 and Fund 2 on SoftBank. Finally, in my In Focus section, I'll describe our monetization strategy and provide some examples. Let's start with an update on Vision Fund 2. As you can see on Slide 6, SoftBank recently announced commitment of $10 billion to Vision Fund 2, making it one of the largest tech funds in the world. We believe $10 billion of current commitment is more than enough capital to take advantage of the opportunities in this environment. The constraint on our investing is not capital but rather compelling investment opportunities in late-stage growth category. Since its inception of the fund in October 2019, we've made 13 investments with a total acquisition cost of $2.6 billion. Already, the fair value of these investments is up 3x to $7.6 billion, driven by our investment in Beike, which went public in August. So far, the fund has been focused on the consumer, education and health tech sectors as well as China, where GDP growth has sharply rebounded as the country leads the global recovery from COVID. There have also been several important milestones in Vision Fund 1. On Slide 7, we show that during the last 3 months, several portfolio companies experienced a liquidity event, whether this was a new listing, a full public market exit or a strategic acquisition. Across this spectrum of activity, we're creating significant realized value for our LPs. We are excited to see our company be so well received by the public market. For the new listings, we are confident in our founders' ability to continue executing on their growth strategies as public company. We are particularly excited by the announced acquisitions of Arm and OSIsoft, with transaction values of $40 billion and $5 billion, respectively. We believe both companies will create significant value for shareholders upon close of each transaction. We also have another $14.7 billion of uncalled capital in Vision Fund 1. A significant portion of which is reserved for follow-on investments in our most successful companies. Before the pandemic, the information revolution is disrupting inefficient industries and creating entirely new categories. Then in March, as you can see on Slide 8, we took a large write-down as many of our companies were reeling from around-the-world lockdown. In the months that followed, demand in several sectors such as e-commerce, entertainment, health care, education and food delivery ramped up and surpassed pre-pandemic levels. Our portfolio is well positioned to disproportionately benefit with these accelerated digital shifts happening because of the pandemic. This positive commercial activity allows our companies to attract new capital and raise funds at higher valuation. As a result, the fair value of our portfolio increased by $2.9 billion in the June quarter. In the September period, the fair value of our portfolio further increased by $6.1 billion, bringing our cumulative gains since inception to $9.6 billion, exceeding the cumulative gain with which we started the year. On Slide 9, you will see that total capital commitments for Vision Fund 1 are $98.6 billion. In the 3 years following our initial close of the Vision Fund, we have invested $83 billion and recorded gross investment gains of $9.6 billion. We've also distributed $13.4 billion back to our LPs from realized exits, portfolio financing and payment of the preferred equity coupon. Of the fund's total commitment of $98.6 billion, SoftBank's portion is $28.1 billion. SoftBank has contributed $24.1 billion to date, which has grown to $26.1 billion in total value, including distribution of $1.6 billion. Moving on to Slide 10. Since the inception of the Vision Fund, we've made 92 investments, including joint ventures. Our current total number of investments after 9 full exits is now 83. On Slide 11, we present the 7 sectors we invest in by cost and fair value. Quarter-over-quarter valuations increased in each of our sectors. Our health tech sector is an example of a standout success. As a result of strong performance, valuations for this sector are up both quarter-over-quarter and year-over-year. Vision Fund 1 is creating significant value for our investors. Here on Slide 12, you can see our realized and unrealized gains. Looking at our public listings this year, we noticed these events resulted in significant valuation uplift for those companies. We believe our portfolio is well positioned for valuation increases as more private companies go public. The key takeaway is this, as of September 30, the gross investment gain for realized investments is $6.2 billion and the fair market value of our unrealized public holdings is now at $12 billion, which is above our cost by $3.2 billion. Since the inception of the Vision Fund 1 through to September 30, 10 portfolio companies have listed publicly, which is shown on Slide 13. Many are trading at valuations that are several times higher than our blended entry valuation. Separately, we fully exited 2 public companies during the period, 10x Genomics and Slack, with impressive MOICs of 10.9x and 3x, respectively. As shown on Slide 14, our first Vision Fund 2 portfolio company, Beike, went public in August. Beike is a leading online and off-line real estate platform in China with nearly 0.5 million agents operating in over 100 cities. Its IPO was the largest in terms of amount raised from a Chinese company since Alibaba. Our acquisition costs in November 2019 was $12.91 per ADS. Beike's IPO 9 months later was priced at $20 per ADS. Since then, the stock continues to appreciate and closed at $61.30 on September 30. Similar valuation uplifts can be seen on Slide 15. These 4 examples illustrate our most recent funding rounds and show our company successfully raising capital at healthy valuations where we're not meeting the round. Let's start with Fanatics. In August 2020, the company raised $350 million at a pre-money valuation of $5.8 billion in their Series E round that was led by Fidelity and Thrive Capital. In the same month, Rappi raised $350 million in a Series E funding round co-led by T. Rowe Price at a pre-money valuation of $4 billion. Also in September, GoPuff raised $308 million in their Series F round led by Accel and D1 Capital. This funding happened at a valuation of $3.5 billion, which is 2x the valuation of their prior round. Lastly, Getaround also raised an important Series E round led by People Fund that attracted $140 million from new and existing investors. Getaround was severely affected by the widespread lockdown at the onset of the pandemic. After months of work to reorient the business, the company has recovered. Their successful fundraise reflects Getaround's growth trajectory. In most of these examples, the Vision Fund participated to maintain our pro rata ownership. Let's discuss the impact of the Fund's financial performance on SoftBank now. As you can see on Slide 17, for the 6 months ended September 30, SoftBank's share of the fund's net profit was $3.85 billion. Combined with management fees, the total contribution to SoftBank is $3.98 billion. This compares to $3.31 billion in net loss and fees to SoftBank for the same period last year. Moving on to Slide 18. Cumulatively, from Vision Fund 1 inception through September 30, SoftBank's share of the fund's net profit was $1.95 billion as an investor. Factoring in an additional $481 million in management fee income, the total contributions since inception to date for SoftBank is $2.43 billion from the fund. On Slide 19, from a balance sheet perspective, as of September 30, SoftBank contributed $24.1 billion in capital to the fund. This amount is up in total value to $26.1 billion, which includes $1.6 billion in distribution. Looking at similar metrics for Vision Fund 2 on Slide 20. We show that SoftBank contributed $2.8 billion in capital to the fund. This amount has increased significantly in total value to $7.7 billion, inclusive of accrued performance fees. I'd now like to turn your attention to this quarter's In Focus section. To begin, I'd like to remind this group that Vision Fund 1 is focused on late-stage growth equity. On Slide 22, we show that most of the checks we wrote went to companies with existing product, positive unit economics, passionate customers and proven business model. They also have meaningful revenues. As we show here, 62% of our committed capital has been deployed to companies with more than $1 billion in annual revenue. Our team believes we have an unmatched ability to provide value to late-stage growth companies by supporting the founders of these firms as they seek capital to scale their businesses, disrupt inefficient industries and become global market leaders. We are long-term patient investors. Looking at Slide 23. You may recall, the Vision Fund is a 12-year investment vehicle and has 2 optional 1-year extension, meaning that the fund could operate for up to 14 years. During the first 3 years of the fund, we focused on making investments that align with our investment thesis. This investment period concluded last fall. Now our investment teams and operating group are focused on value creation in the portfolio. Alongside this value creation work, we have started to monetize fund assets with the goal of maximizing IRR and distributions to our LP. Given the size of the Vision Fund, we must consistently sell down our positions during the life of the fund. We recognize that capital markets might not be sufficiently deep enough to allow us to exit substantial holdings in a compressed time period at the end of the fund. To maximize value, we have deployed a balanced and disciplined approach to monetizing assets. In the following slides, I'll explain our approach and share some examples. As you can see on Slide 24, our public holdings and realized exits have steadily grown over time and now represents $12 billion and $13.9 billion, respectively. As we exit investments, distributions are made to the LP. This reduces the amount of preferred equity coupon repaid. As of September 30, our outstanding preferred equity capital was $27.9 billion. While our investment thesis is based on investment period of up to 5 years, the long life of the fund allows us to be patient and focused on the long term. The capital we provide is instrumental in helping our founders scale their businesses and our operating group helps with execution and creating new areas for growth. Ultimately, we will exit our position to return capital to LP. On Slide 25, we show the key considerations behind these exit decisions, which may be either sooner or longer than expected. These considerations fall into 3 categories: the first looks at strategic factors. Examples include a changing competitive landscape or shifting geopolitical risk. Next are financial factors. Sometimes, there are situations when a public stock price has increased beyond our [ bull case ] expectations and where it makes financial sense to exit in order to maximize our IRR and MOIC metrics and return capital to our LP. Last are opportunistic factors. These include situations such as an inbound offers from strategic buyers to acquire one of our companies. I'll share specific examples on the following slide. Let's move on to look at our specific exit strategy. On Slide 26, we summarize these options, which include public market listing, strategic acquisitions and restructuring and recovery opportunity. I mentioned earlier in my presentation that 10 companies in Vision Fund 1 and one company in Vision Fund 2 have gone public. An important additional point I'd like to make on Slide 28 is that these listings are happening via multiple channels, including traditional IPOs, direct listings and SPACs. Allow me to share a few examples. First, IPO. In December 2018, Vision Fund 1 invested $31 million in a biotech company, 10x Genomics. In September 2019, the company had a very successful IPO on the NASDAQ and continued to perform well as a public company. Finally, in August this year, we fully exited the company with $338 million in proceeds, representing an MOIC of 10.9x. Second, direct listings. In October 2017, we first invested in Slack, an enterprise software company. Including follow-on investments, our total investment was $334 million. In June 2019, Slack began publicly trading by way of a direct listing on the New York Stock Exchange. This path enabled the company to list efficiently. In September 2020, we closed out our $1 billion position with an MOIC of 3x. Third, SPACs. In August 2018, we made the first of multiple investments in online real estate company, Opendoor. Including follow-on, our total investment was $450 million. In September 2020, the company announced they'll merge with a SPAC called Social Capital II at a pre-money valuation of $4.8 billion. This translates into our share now being valued at $1.4 billion. Concurrent with this announcement, Opendoor is also raising another $600 million to help fuel growth. Since the announcement, the stock price of Social Capital II is up significantly, signaling enthusiasm for this transaction. Our understanding of these various paths to the public market allows us to be flexible and supportive of our founders and their management team as they seek the type of listing that works best for them. In addition to our public listings, strategic acquirers announced transactions to buy 4 of our companies. These are shown on Slide 29. Starting with the most recent, they are: NVIDIA's announced $40 billion acquisition of Arm, American Express' acquisition of Kabbage, Walmart's $20 billion acquisition of a controlling stake in Flipkart, and AVEVA's announced $5 billion acquisition of OSIsoft. Once completed, we're confident the gross proceeds from these 4 transactions will unlock significant realized value. Let's look at the details on Slide 30. Flipkart was an early investment in Vision Fund 1. The company is very well positioned in the Indian e-commerce market, and we were pleased with how the company was executing against our original investment thesis. So when Flipkart was approached by strategic buyer, Walmart, we were supportive of management's decision to sell the company for $20 billion. The transaction resulted in an early $1.5 billion realized gain for the fund, representing an MOIC of 1.6x. OSIsoft, a data management software company, was another early investment. We invested $1 billion in 2017 for a 45% stake in the company. In August of this year, strategic buyer, AVEVA, announced their $5 billion acquisition of OSIsoft. At close, the Vision Fund will exit its full position and stands to realize $1.4 billion of gains with an MOIC of 2.4x. Third, Arm was a cornerstone investment made by SoftBank. In September, NVIDIA announced their $40 billion acquisition of Arm, which is expected to close late next year, as Goto-san mentioned. When that happens, NVIDIA will be #1 in GPUs, CPUs and DPUs. Finally, on Slide 31, we take various actions to optimize investment returns when public listings and strategic acquisitions are unlikely to be near-term opportunities. This includes restructurings and other investment recovery option. These actions allow us to refocus our time and attention towards more valuable opportunity. They also allow us to reallocate our financial capital to investments with better risk-adjusted returns. Let me walk you through 2 examples. First is Brandless, an-e commerce company. Their Board decided to dissolve the business after it became apparent that pivoting the company to higher-priced products was not going to work. The Brandless situation highlights the benefits of our tranched approach to investing. While our headline investment figure was $240 million, we had only funded the company with $100 million at the time of dissolution. Second example is Getaround, the peer-to-peer car sharing platform. The company's recent $140 million fundraise, with most of the capital coming from new investors, is the culmination of a year-long effort by Getaround management and our team and represents a major turning point for the company. In December 2019, our operating group stepped in to take leadership roles to transform the business and its operations. Despite the significant headwinds faced by the entire transportation sector from COVID-19, Getaround's marketplace is now generating significantly higher net revenue per month compared to pre-COVID levels, growing at 55% year-over-year. Gross margins have improved, cash flow has been reduced significantly with the marketplace business burning 65% less over the past 3 months than before our team got involved. Now Getaround plans to reach breakeven by mid-2021. This outcome was achieved by pivoting underperforming markets and business lines and guiding the company through a reorganization that included pivoting the growth strategy towards higher-margin professional users, moving away from capital-intensive fleet management operation and recently hiring a new CFO and COO of North America. Looking at our exited investments on Slide 32. We show the results of our monetization activities. Combined, these exits have resulted in a multiple of 1.8x over cost, which was achieved over a relatively short period, leading to an IRR of 95%. We are pleased with this performance to date. Upon raising a fund of the size and ambition of Vision Fund 1, we knew we would also need a sophisticated, balanced and disciplined monetization strategy. Moving on to Slide 33. Vision Fund 1 now is in its fourth year, but despite our long-term focus, we began monetizing assets in 2018, which was our first year as a fund. Currently, the fund has nearly $14 billion in realized proceeds from exit, with another $12 billion representing liquid public market stock. Combined, this represents about 1/3 of our portfolio. So far, in Vision Fund 1, we have monetized a significant portion of our portfolio. Including announced but not yet closed exits, the combined amount of exited and public investments represent over 40% of our portfolio. This figure will continue to grow over time. Thank you for listening. Today, I discussed our performance and our contribution to SoftBank. I also discussed our monetization strategy and approach. Before we finish, I'd like to reflect on how far we've come during what has been a turbulent and challenging year. In Vision Fund 1, we've continued to make progress with many portfolio companies seeing accelerated growth and increases in fair value. In Vision Fund 2, we have now invested in 13 companies and have seen the total value tripled since January. 2020 has presented challenges for many. We believe we have overcome many of those challenges and feel positive about what the future holds. I look forward to your questions. Thank you.

[Interpreted] [Operator Instructions] We would also like to remind you that we will not be able to answer any questions regarding SVF strategy, performance, IPO status of portfolio companies or exit. We would like to take first a question from Japanese webinar [Operator Instructions] Masuno-san from Nomura Securities first, please.

[Interpreted] I have 2 questions. Masuno from Nomura Securities. First, Navneet with regards to SVF 2. In October, you raised a commitment size and now $10 billion. Excluding execution at the end of September, and now remaining commitment value is 78 -- $7.8 billion. Maybe for the whole year, the run rate is $2.5 billion and maybe 3 years left. So capital wise, you are okay, but less opportunities compared to SoftBank Vision Fund 1. But looking at investment opportunities, I wonder if you continue investing at run rate. So if you could agree on that, that would be great.

Thank you for your question. We don't have a run rate per se of investing. It all depends on how many compelling investment opportunities we come across. So far between Vision Fund 1 and Vision Fund 2, we've invested in 105 companies, and we have invested in some of the most promising unicorns in the technology industry. So it all depends on the number of opportunities that we come across. We don't have a specified investing pace.

[Interpreted] Specifically, what kind of opportunities you are currently looking at, if you will? Navneet?

We're looking at -- thank you. We are looking at opportunities in a number of sectors. Online education has been very promising. If you look at the China online education market, today, it represents 20% market share of all education. In 2019, it was only 5%. E-commerce continues to be very interesting and exciting. Health care technology, we're seeing a number of opportunities there, and we continue to invest there. But overall, our investment thesis is aligned with [ Samsung's ] thesis of the AI revolution. We'll continue to invest in companies that we believe are disruptive in the AI revolution space.

[Interpreted] Second question. With regards to Northstar, I don't know to whom I ask this question. I understand that 3 months is not a long span enough. But looking at the Northstar, negative $395 billion minus. And the [ MASA ] has 30%. So in all, $253 billion loss you have recorded. So I wonder the investment size currently is the most appropriate. And if looking at Page 25, with regards to 3 decision-makers of the management company, so I want to know who are those 3. And capital, $155 million, looking at the loss that you are recording at the moment, I wonder if you may want to raise more capital to support your investment.

[Interpreted] About fluctuation of gain and loss, I understand you're concerned. Just looking at the numbers, it's obviously a huge number, but also, if you look at just 1 week last week, NASDAQ went up and down in hundred billions of dollars pace every day, every week. So we don't want to be influenced by day-to-day trading situation. We want to look at market investment from long-term perspective. In regards to the total capital size, our asset is about JPY 30 trillion of listed stocks. So the fluctuation is not significant from our capital perspective. But in order to make sure that this won't affect our core businesses, our cash position and LTV are 2 things that we are looking at to make sure that SBG won't be affected negatively by this Northstar activities. About investment committee, 3 people you mentioned. That's Masa Son, Ron Fisher and Akshay. So those are the 3 members of the investment committee. But obviously, there are experts and professionals that support decision-making from analysis point of view and a research point of view. In regards to $555 million of capital, you're concerned about the size, which is maybe too small. And if this vehicle is independent investment company, of course, you are right. But this is a part of SBG Group, and this is a part of our management of credit. So I don't think that you have to be concerned about this capital size.

[Interpreted] [Operator Instructions] Next question, Mr. Oliver Matthew from CLSA.

[Interpreted] So a question to Goto-san, we would like to ask you about cash source. I would like to ask for your big picture. For example, SoftBank Corp. dividend proceeds from Vision Fund, where are the big source of the cash coming from? And how are the ratios in between those?

[Interpreted] I believe that your question is about our financial plan for coming years. As long as SoftBank Group, being an investment company, the investment money in Vision Fund or any money for investments that needs -- that are impressive, but we will consider recycling of money. But at the same time, we do have some rooms there so that we don't have to sell -- well, we are not forced to sell those assets due to the investments so that we would like to utilize those holdings for assets by finance as much as possible. And also mainly targeting for nonrecourse financing for the raising money, so that, that can be used for the new investment-based study. Because currently, the asset is very high liquid, so that also gives us a good room for the investments. But at the same time, from the bond market, we'll be raising quite a large amount of money as well, so that at the time of the redemption, either redeeming cash or providing the similar type of the instrument for refinancing is something that we can consider so that market can choose.

[Interpreted] I would like to take a question from next person, Koshi-san from Nomura Securities.

[Interpreted] My name is Koshi from Nomura Securities. Can you hear me?

[Interpreted] Yes, we can.

[Interpreted] I have 2 questions to Goto-san. First, on Page 11 of Finance section, you have reduced debt by JPY 1.5 trillion. And by end of March next year, you are planning to repay loan or corporate bonds. So aside from JPY 1.5 trillion you have already reduced, are you going to further reduce loan and corporate bonds by end of March next year? That's the first question. Thank you.

[Interpreted] So including the reduction we already achieved, we want you to see how much in net that we will have reduced. For example, financing margin loans, there are a lot of ways to utilize margin loan. For example, we can repay debts or in the group, we can separately take advantaged margin loan. And buying back corporate bond is something that we can say clearly, we reduce debt in net. We have still 6 months to go before March end. So I'd like you to see how much in total, we will have reduced by them.

[Interpreted] And the second question, about buying domestic bonds. Going forward, you also mentioned that you want to provide mid-range products to retail investors. Does that mean that you plan to issue subordinated debt, subordinated loans to subordinate debt bonds to investors, for example?

[Interpreted] So not only subordinated bonds, we want to consider our retail investors from that prospective as well.

[Interpreted] Next question, Ando-san from Daiwa Securities.

[Interpreted] I have my first question. It's about digital securities investment. On Page 22, purpose is to diversify assets and also managing the surplus funds. My question is that how much size are you going to increase for the investments? So I understand managing the surplus funds. But at the same time, in the other pages, they're looking at the pie chart for the assets and so on. How further are you going to expand the size of this investment? Do you have any basic idea that you can share with us?

[Interpreted] Yes, this is Goto speaking. Thank you for your question. For the size, at this moment, we don't have any set, a rule or goal. We just started it, so that we are trying to experiment based on the financial status in the markets, so that we are -- we believe that the idea for the size may changes going forward. If we make a huge investment, of course, that will be making a large impact to our financials. And that kind of thing is not something that we are expecting to. So within that kind of size of that, that we would like to see in the market, and then that we'll be able to see the most optimal size of the investments.

[Interpreted] Do you have any threshold or do you have any discipline for this investment?

[Interpreted] We are not -- we don't think that setting the discipline -- sets or the goals or threshold is something good things for the company. This is my personal thinking for the budget. If we set the budget, then that we will try to use it -- use up all those budgets, even that we don't see the good opportunities out there. So that I believe not setting the budget is better, and that will be even safer for the company. That's how we think about this.

[Interpreted] I understood. And my second question, traditionally, some of the past discount has been discussed quite frequently. This time, LTV has been shown on the slides, but not very much discussed, the discount. Some of the past, as far as I understand, you are not showing any -- some of the past discount. And what is your valuation criteria for the target? And also, how much are you seeing at some of the parts discount? What is your calculation result for the internal or some of the parts discount?

[Interpreted] Yes, Goto-san speaking. Enterprise value or the shareholders' value, of course, some of the parts is a base for the calculation. So when you see the enterprise value, some of the parts and also NAV, the net asset value is the kind of base for the calculation. In the share price discount, for -- against those is the [ CD ] agenda for us. I don't have the latest number with me. Probably around 60% discount recently. We still have quite a wide discount these days. Therefore, because we have done so much buyback, which is a technical solution for the discount narrowing, so that I believe this is for sure, the one good tool to narrow down the discount, but that is not enough. Of course, I believe that we do need to deepen the understanding on our strategy by you, which I believe needs to make even more effort, a continuous communicating to you so that the market and investors and analysts like you will understand us even more so that we'll be able to narrow down such discount.