HONG KONG SAR – Media OutReach – September 11, 2023 – Fosun International Limited (HKEX stock code: 00656, “Fosun International” or the “Company”), together with its subsidiaries (“Fosun” or the “Group”), announced their results at the end of August, a number of domestic and foreign securities companies and investment banks, including Citibank, UBS Securities, Nomura Orient International Securities, Industrial Securities, Huaxi Securities and Kaiyuan Securities, successively issued research reports, expressing their optimistic opinions. on the strong profitability of Fosun International in its core activities and its sufficient liquidity. Many domestic and foreign securities firms and investment banks have assigned the company a “Buy”/”Overweight” rating. Notably, Citibank, Nomura Orient International Securities and Industrial Securities have assigned the company target prices of HK$7.1, HK$7.5 and HK$9.06 respectively, with an upside potential of around 45%. at 85%.
Securities companies and investment banks have recognized Fosun International’s strategy of focusing on its core businesses and focusing on developing core businesses in which it has clear competitive advantages. During the reporting period, the Group achieved total revenue of RMB 97.06 billion, a year-on-year increase of 10.9%; the key indicator reflecting the company’s operational capabilities – industrial operation profit reached RMB 3.37 billion, an increase of 5.5% year-on-year, excluding the profit of divested businesses (including transactions not yet finalized), profit from industrial operations jumped 66% year-on-year, demonstrating a significant improvement in the profitability of core businesses. Domestic and foreign securities companies and investment banks pointed out that benefiting from the recovery of consumption and the easing of travel restrictions globally, Fosun’s Happiness segment, especially tourism businesses and consumption, experienced a strong recovery after the epidemic. Additionally, the profitability of the Healthcare segment, particularly Fosun Pharma, improved significantly, reflecting consistent growth in Fosun’s core businesses.
Some securities houses and investment banks pointed out that Fosun’s main foreign subsidiaries, strengthened by the Group, have achieved remarkable results in global expansion and become an important driving force for development. Huaxi Securities pointed out that Fosun International’s flagship model of “global organization + local operations” has become more mature, with a business presence in more than 35 countries and regions and nearly 40 overseas brand enterprises. In the first half of 2023, the Group’s overseas revenue reached RMB 44.09 billion, accounting for 45.4% of total revenue. Citibank highlighted that the total gross written premiums (“GWP”) of Fosun Insurance Portugal’s international operations amounted to €832 million, an increase of 19.4% year-on-year, highlighting the benefits of the strategy diversification of Fosun Insurance Portugal. The MyFidelidade application launched by Fosun Insurance Portugal has managed to acquire more than 1.4 million registered users (more than 13% of the total population of Portugal). Industrial Securities highlighted that the total NBI of Fosun Insurance Portugal for the first half of 2023 was 2.65 billion euros, thus maintaining its leading position in the Portuguese market with a 30% market share in Portugal; German private bank HAL’s gross revenue increased 24% year-on-year to €224 million, with total assets reaching €13.3 billion, reflecting strong growth momentum in overseas business of Fosun thanks to the autonomy of the Group.
Fosun’s strong technological innovation capabilities are also a key driver of the company’s growth. In the first half of 2023, the Group’s research and development (“R&D”) investments reached approximately RMB 4.2 billion. Nomura Orient International Securities believes that with global expansion and innovation, Fosun is expected to experience a recovery in business. The company highlighted that Fosun has established strong globalization capabilities and a unique operating model. With its global business presence, Fosun has closely integrated global resources with its global customers. In addition, Fosun has always maintained high investment in R&D to build a global innovation system led by product innovation, digital intelligence innovation and management innovation, leveraging the innovation to create happier lives for families around the world.
It is worth noting that domestic and foreign securities companies and investment banks unanimously pointed out that Fosun continues to optimize its capital and asset structure, exert more efforts in divesting non-strategic and non-core assets and actively explore financing channels, thereby maintaining abundant liquidity. During the reporting period, cash inflows from divestment amounted to more than RMB 20.0 billion at the consolidated level. In January 2023, Fosun High Technology successfully concluded a syndicated loan agreement amounting to RMB 12 billion with eight domestic banks, demonstrating the strong support of domestic banking institutions for the development of private enterprises. Regarding public market financing channels, Fosun High Technology issued two very short-term commercial papers of RMB 1 billion each in January and July 2023. In the first half of 2023, the Group broke through the barrier of maturities and repurchased onshore bonds of RMB 6.73 billion as well as offshore debt of more than $2.7 billion. As of June 30, 2023, the Group has no significant one-year offshore obligations. The improvement in the credit profile was also confirmed by the international market. International rating agency S&P Global Ratings recognized Fosun’s effective efforts in debt reduction through asset divestment and debt structure optimization and raised the Group’s rating outlook to ” stable “.
Looking ahead to Fosun International’s future performance, domestic and foreign securities companies and investment banks are optimistic about the company’s accelerated divestment from non-strategic and non-core assets and optimization of capital structure for focus more on its core activities. A securities house pointed out that the company’s results are expected to grow rapidly compared to the full year 2022. Since the main factors affecting the stock price have already been taken into account, the The company’s current valuation is attractive, so a number of domestic and foreign securities companies and investment banks have recommended investors to buy the Company’s shares.
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