On June 6th, the 2018 Fosun Forum on Industrial Depth for an Innovative Future was held at Wanda Reign on the Bund in Shanghai. Mr. Guo Guangchang, Chairman of Fosun International, Mr. Wang Qunbin, CEO of Fosun International, Mr. Chen Qiyu, Co-President of Fosun International and Chairman of Fosun Pharma, Mr. Xu Xiaoliang, Co-President of Fosun International and Chairman of Yuyuan Inc., Mr. Wang Can, Senior Vice President and CFO of Fosun International together with other Fosun executives attended the meeting. Around the theme of Industrial Depth for an Innovative Future, this forum aims to introduce the development of Fosun International and the results of industrial operations as well as to review how Fosun has promoted the industrial operation and created value from the perspective of technological innovation. The forum invited Fosun International's management, as well as senior executives from its subsidiaries and invested companies to share their breakthroughs and progresses in strategic planning, industrial operation and technological innovation. 

Three panels were organized during the forum for further discussions on three topics, including industrial operation, biotechnology-enabled Fosun health eco-system, and Fosun C2M eco-system empowered by smart technologies. Mr. Guo Guangchang, Chairman of Fosun International, summed up the logic of Fosun's development and proposed the outlook for the future. 

Keynote presentations

Fosun Industrial Operation + Technological Innovation to Drive Value Improvement 

Over the past two years, Fosun's business has been continuously advancing, and we have a clear picture about what kind of company Fosun intends to become in the future. Our mission is to make every family in the world live a happier life. Our vision is to take deep roots in China and serve one billion global family customers, as well as innovate a global ecosystem with health, happiness and wealth. In order to achieve this great vision, we emphasize the following five areas: focus on family customers, C2M strategy, technology leadership, industrial operation + investment, and globalization. We wish to provide new WOW products and services empowered by biotechnology and smart technology. 

Why is today's Fosun worth investing in? We've said that Fosun firstly records a solid and step-by-step asset base and profit support, coupled with the compound annual growth rate of net profit in the past five years at 29%. While growing rapidly, Fosun has maintained a balanced cash flow and a stable net debt ratio. We hope that the company's credit rating can gradually be improved to the investment grade as soon as possible. Besides, Fosun has a unique industrial ecosystem, and owns multiple innovative tech unicorns, industrial unicorns, as well as excellent talents from all over the world, so that everyone can contribute to Fosun's growth and create value for our customers and shareholders on a global, diversified, enabling, and collaborative platform. 

Fosun's happiness sector is highly expected

Health is the foundation, and wealth is the guarantee, and then more happy experiences will be needed. 

Fosun's entire happiness sector has such a vision as to serve families worldwide and innovate a happy and fashionable lifestyle. There are five dimensions for the happiness sector, which develop more offline scenarios to provide family customers with happy experiences, build online platforms to encourage easier and more convenient interaction, and introduce more products that make people wow and enjoy, generate high-caliber contents internationally, and engage more business models which can be spread disruptively. 

In these five dimensions, the happiness sector has set up three core platforms: Yuyuan Inc, Tourism & Culture Group, and Fashion Group. 

Yuyuan Inc’s vision is to lead the revival of Chinese culture, innovating a world-class happy and fashion group rooted in China, and creating a “1+1+1” Fosun's happiness and fashion flagship integrating happiness and fashion industry + offline happiness and fashion landmark + online fashion family portal, to be connected with the youlè platform. 

Tourism & Culture Group puts forward an upgraded slogan "Everyday is Foliday" to express a more fashionable and happy experience. The vision of Tourism & Culture Group is to become the global leading platform for family leisure and vacation. Indeed, in the past few years, Fosun has made a full-scale industrial chain and a global presence, and it is also providing more comfortable travel products for global families. Club Med offers high-end leisure hotels and resorts, while Fanxiu provides services related to entertainment and tourism culture, and Albion provides leisure destinations. Moreover, Atlantis unfolds Sanya 3.0. Club Med has 71 resorts altogether worldwide, including 6 resorts already popular in China. Club Med has been making enormous efforts in China and witnessed tremendous improvement and progress in business results in 2017. In addition, after five years of development, Atlantis, the ocean-themed one-stop entertainment and leisure travel destination with 1314 rooms, has been officially inaugurated at the end of April this year in Hainan, China. 

Our Fashion Group previously invested in St. John. Last year we had the honor of investing in a very important French brand Lanvin. At the same time, we also invested in the best Austrian stockings brand Wolford. In the sports field, we are excited to see that the Wolves entered the Premier League from Champions League, making it closer to families; in the field of movie, Studio 8 will release two films shortly this year. 

In the happiness sector, everyone is doing the best every day. Physical reaction is taking place in our own ecosystem. More importantly, the happiness sector should make chemical reaction with the external health and wealth sectors. 

Once again, we must be happy throughout the journey! 

Technology reshapes the value chain and service model of various industries and builds a closed-loop ecosystem for C2M

"No technology, no ecosystem."  At the beginning of this year, Fosun proposed its goal to transform itself into a company driven by technological innovation. The core is to build ONE Fosun's smart ecosystem around the needs of global family customers. Both “intelligence” and "action" should be paid equal attention to. Smart or intelligent is about science and technology, therefore the global landscape of science and innovation should be developed, coupled with future manufacturing enabled by science and technology. Action is about industry that should be profoundly integrated with health, happiness and wealth scenarios and industrial capabilities and builds a C2M closed loop. Technology drives the industrial closed loop to enhance commercial value, and the industrial closed loop will in turn drive the layout and development of science and technology. 

Specifically, Fosun's core approach is to build a C2M closed loop based on the needs of family customers and in accordance with the scenarios of health, happiness and wealth. In the healthcare science and technology ecosystem, first of all, efforts should be made from the M-end to improve medicare service models via science and technology, promote the circulation of medical resources, and facilitate the digitization of equipment, management and so on. At the same time, the C-end will make O2O arrangements for scenarios across the board at all levels, covering all dimensions from rural doctors, grass-root organizations, hospitals, clinics and pharmacies to various medical associations and smart cities, etc. 

The vision of science and technology in the health field is "precise medical care, health services at home, happiness and longevity." The happiness and wealth sectors are enabled by science and technology, such as the development of scenarios to be interconnected from love and marriage, wedding, mother and baby products, travel, and to the entire wealth management. Finally, the 2-Link platform will pool these industrial capabilities, break through the value chain, and upgrade these industries and reshape values through science and technology. 

The industrial context has changed, and the way in which science and technology will increase value in the future will reshape the value chain and service model of each industry, and to re-build the customer-centric rather than platform-centric C2M closed-loop ecosystem. It can be foreseen that this model has a huge space. 

 “Youlè” is a thread that strings together each and every pearl of Fosun industry.

There are many high-quality industries owned by Fosun, which are the strong support and solid foundation for Fosun to develop a happiness ecosystem. To realize our vision, we need not only to invest in the industries, but also to engage in deep industrial operations. The C2M strategy is an important component of Fosun's deep industrial operation. With the C2M strategy, we will integrate the high-quality industries in the Fosun System into an ecosystem based on "health, happiness and wealth". "Youlè" is a thread which strings together all these pearls of Fosun industries, enabling these companies to collaborate in depth in all aspects of product, sales, and marketing, and to provide a never-ending driver for building a happiness ecosystem. 

We have three important initiatives to promote the activity of our members. The first is the "Youlè Lifestyle Hall", which is a well-selected platform for household consumption and also a "green channel" linking customers with M-end products. There are three main characteristics of Youlè Lifestyle Hall. First, there're well-selected products or services of the Fosun portfolio companies; then is the price advantage without any middleman to gain the price difference; and finally, the Youlè Lifestyle Hall is a smart retail platform based on big data and precision marketing. The second initiative is “Wealthy Cat”, which is a pet-raising game specifically developed for our family customers. This game is developed for customer management, since users can interact with the pet and see it grow up during fragmented leisure time. Meanwhile, Wealthy Cat can earn you star diamond, or you can also make friends with other users' cats. The third initiative is "515 Youlè Family Day," which is a celebration shared by Fosun Group's global family customers. At the same time, the Youlè Family Day is also a family shopping festival. Today the Youlè Happy Shopping Festival officially kicks off. We've organized more than 20 brands of the Group and work together with KOLs to promote them across the network, recommending new trends in household consumption and leading the consumption upgrade. In the meantime, we will also launch offline the Youlè Family Day to offer happy shopping experience for customers, creating a festival that will bring joy to each family member. 

Industrial operation is the core competence of Fosun, and investment is a means of enhancement and development. 

Fosun aspires to be a company with deep industrial operation plus industrial investment. In the past, people were impressed by Fosun's investment, but we always believe that investment is just a means of Fosun's industrial development, while industrial operation is our core competence. We want to serve more families through in-depth industrial operations. 

In pursuit of solid industrial operation based on this strategy, we put much emphasis on household consumption to meet their demand for "health, happiness and wealth." One of the most important experiences is to focus on product! A good product will "speak" for itself, especially in an era when information is highly developed. No good products will be unmarketable. If it is a good product, everyone will advertise for you because information exchange is too convenient today. We have proposed the C2M model, which is still fundamentally based on the M end and on a good product. 

What are the highlights of Fosun's investment? How can we create investment value through management? 

First and foremost, it is about the risk and safety of investment. Second, we highly value product power and customer's perception of the product. Third, it is also important whether the team is in good condition. I hope the core team of the company will be not only capable, but also hearty and aspirational, so that a product can be well done. In addition, I often ask, after Fosun has invested in a company, can we help this company grow; can the company interact and collaborate with Fosun? Finally, we wish to bring Chinese companies to the world and bring global companies to China. Globalization does not simply mean selling products to the world; instead, it’s about building an organization around the world, expanding a global presence, and having a global vision, etc. 

Investment is only the beginning, while management can create more values. In-depth industrial operation capabilities and investment capabilities are interconnected. Robust industrial operation will greatly drive investment performance. If you dare to do what others dare not do, or you can turn a hopeless company around, and help it create more values through industrial operations, then this is the core competence of a company that is good at investment, and it is also where Fosun’s unique value lies.

Q&A between investors and management

Investor: Regarding Fosun's future target, when will Fosun be ranked global top 100 companies?

Guo Guangchang: Honestly, we don’t talk too much about how strong and how big we want to be. But sometimes we are no different from the majority and feel it necessary to join some lists. Therefore, we are still keen on "Forbes 500" because firstly it's about the ranking of listed companies and financial transparency, and secondly, it ranks companies by comprehensive strength rather than sales alone. Fosun is currently among the “Forbes 500,” followed by Sony. Fosun is working on a mega ecosystem. We want to serve one billion families in the world, a mission I will spend my whole life fulfilling. 

Investor: How to convert the 45 million customer traffic in Yuyuan Garden to youlè or the online platform? 

Xu Xiaoliang: Yuyuan Garden currently has the traffic of 45 million customers. With the overall upgrade of Yuyuan Garden, a broader landscape will be shaped stretching from the Bund and BFC to the entire Yuyuan Garden. How can we truly channel the traffic offline to online? One is youlè, which has enabled a very good transfer. Yuyuan is also trying some new methods. For example, Yuyuan is about to launch a 3D small map in electronic copy and hard copy. This map will make it easy for visitors to tour the big Yuyue Garden. Visitors will also be willing to have their IP address recorded. After logging, we will push the products of the happiness sector, such as Atlantis, Club Med, and Cirque de Soleil to users. There is also interaction between the happiness segments on youlè platform. Through these measures, we can quickly bring these customers together. From now on, this snowball has just begun to roll and let’s look forward to the brilliant results. 

Guo Guangchang: Let me add a few comments. What is a good product? After my own business trip for a week, I will miss my home. This is the home of my family, and the other home is my office. I feel that I'm happy in the BFC office. What a great view! Every detail is beautiful. This is what it takes to make a good product! I believe that one of the most beautiful cities in the world in the future is definitely Shanghai. What is the most beautiful and iconic place in Shanghai? That's from the Bund, BFC to Yuyuan, where an eclectic mix of history, modernity, classics and fashion can be found. This place is so beautiful! Why do we put the meeting here this time? It is because we welcome our shareholders "home”, and welcome everyone to Shanghai and to the BFC regularly.