*

Quarterly profit easily beats analyst estimates

*

Rising value of listed holdings Didi Global and Coupang ( CPNG )

major

contributors

*

Vision Funds fully or partially exited $1.85 billion of

holdings

*

CFO says more companies in portfolio nearly ready for IPOs

(Adds details from CFO's briefing and comments on China tariffs

in paragraph 7, IPOs in paragraph 10, and OpenAI investment in

paragraph 15.)

By Anton Bridge

TOKYO, Nov 12 (Reuters) - Japan's SoftBank Group

swung to a 1.18 trillion yen ($7.7 billion) net profit

in the three months to September, as the tech giant benefitted

from higher share prices of listed companies in its Vision Fund

investment vehicles.

The results handsomely beat expectations for a 287 billion

yen ($1.87 billion) profit based on the average of four analyst

estimates compiled by LSEG, and compares with a loss of 931

billion yen in the same period last year.

The results show SoftBank's more cautious approach to

investment is bearing some fruit. Masayoshi Son's investing

juggernaut was forced into a prolonged period of retrenchment

when interest rate hikes caused the value of its holdings in

high-growth tech start-ups to crater.

Now some of these valuations are beginning to recover,

pushing the Vision Fund unit to an investment gain of 608

billion yen. The unit has been in the black in four of the last

five quarters.

"After we were making large losses in the Vision Funds, we

were very conservative. So now we were able to generate good

profits as a result of learning from that," SoftBank Chief

Financial Officer Yoshimitsu Goto said after the earnings

release.

"Our investment gains were very strong this quarter,"

Goto said, adding he has high hopes for companies in its

investment portfolio that are in the late stages ready for

public listings.

Goto also said he was closely monitoring the impact on

its portfolio of any tariffs levied by the incoming Donald Trump

administration against China, having already reduced the group's

direct China exposure in recent years.

The two Vision funds fully or partially exited investments

to the tune of $1.85 billion. It made full exits from 10

portfolio companies including Chinese artificial intelligence

firm SenseTime and India's payment firm PayTm.

SoftBank and its Vision Fund investment vehicles have had

few opportunities to monetise holdings amid a muted IPO market,

excepting the blockbuster listing of chip designer Arm

in September 2023.

But in the quarter just passed, Brainbees Solutions

, which operates Indian retailer FirstCry, and electric

motorbike maker Ola Electric Mobility listed in

August, generating a gross gain of over $1 billion between them.

The principal contributors to the bottom line in the quarter

were Chinese ride hailing giant Didi and South Korean

e-commerce company Coupang ( CPNG ), which drove an investment

gain at Vision Fund 1 to $2.76 billion.

Vision Fund 2, which houses a broader roster of early stage

tech startups, made a more modest investment gain of $800

million yen for the period, and the group also booked a $2.5

billion investment gain from its stake in T-Mobile.

While Vision Fund 1 has had a gross gain of $22.6 billion

since inception this has been largely offset by Vision Fund 2's

$21 billion loss.

Nevertheless, the cumulative return on investments for the

two funds was positive for the first time since the first

quarter of 2022.

Vision Fund 2 also invested $500 million in OpenAI in a

funding round that valued the ChaGPT operator at $157 billion, a

number Goto described as appropriate given its business model.

A recovery of the yen against the dollar over the quarter

generated a gain of 289 billion yen as dollar-denominated

liabilities could be funded more readily in yen.

($1 = 153.6400 yen)