Profit Reaches RMB 7.61 Billion with Best Ever Interim Results

1H2019 FINANCIAL HIGHLIGHTS:

• Revenue increases 57% to new record of RMB 65.48 billion
• Profit attributable to owners of the parent returns to double digit growth and reaches RMB 7.61 billion, achieving seventh consecutive year of growth
• RMB 6.12 billion of profit comes from industrial operations, with 52% growth year-on-year
• Board of Directors recommends first ever interim dividend of HKD 0.13 per share

<<27 August 2019, Hong Kong, Shanghai>> Fosun International Limited (SEHK stock code: 00656) and its subsidiaries (“Fosun” or the “Group”) today announced its financial results for the first six months ending 30 June 2019.

Guo Guangchang, Chairman of Fosun International said, ‘We are pleased to announce that in the first half of 2019, Fosun reported its best ever interim financial results. Our revenue grew 57% to RMB 68.48 billion (approximately US$10.11 billion) and profit attributable to owners of the parent grew 11% to RMB 7.61 billion (approximately US$1.12 billion). More importantly, with over RMB 6.12 billion of profit now generated from industrial operations, a year-on-year growth of 52%, we have been successful in our initiative to focus on global industrial operations and '1+N' product line strategy. With this strong performance, I am also pleased to announce that the Board of Directors has recommended its first ever interim dividend payment of HKD 0.13 per share.’

‘Over the past few years, Fosun has focused heavily on enhancing operations across our global operating companies. In particular, we have focused on creating world class products, improving global sales and marketing with greater connectivity to customers and driving operational efficiency. The aim is to create multiple market leaders across multiple product lines under Fosun, a concept we call ‘1+N’, such as ‘Hanlikan’ (China’s first domestically developed biosimilar receiving approval for sale in China), Fosun United Health Insurance, Starcastle (China’s leading one-stop senior living health services community), Club Med (The largest resort chain worldwide), Sanya Atlantis (Landmark project of Sanya Tourism 3.0), etc. We have plans to create many more market leaders, including product lines for maternal care, sports, and pet care.

‘As a global company with close to 43% revenue overseas, Fosun enjoys 57% of its revenues from China, 27% from EMEA and 11% from the Americas. The rest of our revenue is generated in emerging markets where we have a growing focus. Our global operations and diverse revenue streams allow us to capture global growth opportunities while reducing risks in any one market.

‘Looking forward, we are confident in our market-leading companies and products to deliver resilient and stable growth and deliver continued value to our shareholders. Over the medium term, we will focus on driving ROE across our businesses, focusing on superior products, branding, operational efficiency and synergies within and around our business lines. In the long term, we envisage Fosun running its ‘1+N’ product lines, where Fosun supports market leaders creating world-class products for one billion families around the world.’

Key Financials

During the first half of 2019, the Group reported its revenue of RMB 68.48 billion, representing a year-on-year increase of 57% and a compounded annual growth rate of 16% for the past 5 years from 2013 to 2018. The Group’s Health, Happiness and Wealth Businesses represented 24%, 45% and 31% respectively of total revenue. 57% of revenues were generated from China, 27% from EMEA region and 11% from the Americas.

During the reporting period, the top five contributors of revenue by subsidiaries were Fosun Pharma, Yuyuan, Fosun Tourism Group, Fosun Insurance Portugal and Peak Reinsurance and together representing 83% of total revenue (in terms of the Group’s consolidated financial statement). Year-on-year growth for the reporting period was 20% for Fosun Pharma, 35% for Yuyuan, 36% for Fosun Tourism Group, 50% for Fosun Insurance Portugal and 16% for Peak Reinsurance.

Profit attributable to the owners of the Company was RMB 7.61 billion, representing an 11% year-on-year growth for the reporting period and sees profit growth return to double-digits.

The Health Business increased its profit attributable to the owners of the company by 4% year-on-year with Fosun Pharma and health-related investment as the major contributors. During the reporting period, Fosun United Health Insurance achieved a year-on-year premium growth of 607% due to synergies with Fosun’s Health Business. ‘Hanlikang’, the first-ever domestically developed bio-similar in the treatment of non-Hodgkin lymphoma, researched and developed by Fosun’s Shanghai Henlius, received the approval from the National Medical Products Administration for marketing and is now included in China’s National Reimbursement Drug List.

The Happiness Business increased its profit attributable to the owners of the Company to RMB 1.82 billion, an increase of 86% over the same period last year. This was mainly attributable to the successful turnaround for both Fosun Tourism Group and Fosun’s Premier League football team, Wolverhampton Wanderers. Following strong performance of the resort operation business and tourism destination business, Fosun Tourism Group reported a profit attributable to the owners of the parent of RMB 490 million for the six months ended 30 June 2019, compared to a loss of approximately RMB 250 million for the six months ended 30 June 2018. Wolverhampton Wanderers also placed seventh place in the Premier League 2018/2019 season as well as winning the championship in Premier League Asia Trophy in 2019.  Yuyuan, after its major reorganization in 2018, reported profits attributable to the owners of the Company of over RMB 1 billion in the first half of 2019.

The Wealth Business saw a decrease in its profits attributable to the owners of the Company by 3% compared to the same period last year.  This was mainly attributable to a decline in capital market investments, a decline in net income at Fosun Insurance Portugal and a 6% drop in net income for the Investments segment. The finance segment did however see strong performance at BCP in Portugal, with 13% growth in profit attributable to the owners of the Company to Euro 170 million.  The company expects contributions from investments as a proportion of profit attributable to the owners of the Company to decrease with more contributions coming from operations in the Health, Happiness and Wealth Businesses. 

During the first half of 2019, the Company continued to conservatively and actively manage its balance sheet liabilities and optimize the debt structure. At 30 June 2019, the Company reported total debt of RMB 193.19 billion and net debt of RMB 89.44 billion with 56% of Debt in RMB and 44% in other currencies.  This represents a Total Debt to Total Capital ratio of 53.2%, which is lowered by 0.5 percentage point. The proportion of medium-to-long term debt is at 65.4%, up by 1.8 percentage point.  As the Company continues to diversify its assets and improve its asset liquidity, Standard & Poor upgraded the Company’s debt outlook from Stable to Positive and confirmed BB rating in May 2019.

In the first half 2019, the Company’s Earnings Per Share (“EPS”) was RMB 0.89 per share (approximately HKD 1.03 per share), representing a year-on-year growth of 11%. The Company’s EPS has grown on an annually compounded rate of 13% for the past 5 years from 2013-2018.  The Company’s Book Value Per Share (“BVPS”) at the end of the reporting period was HKD 15.27 per share, representing an increase of 5%, compared with the BVPS as at 31 December 2018. The Company’s BVPS has grown at an annually compounded rate of 15% for the past 5 years from 2013-2018. In the first half of 2019, the Company’s annualized Return on Equity (“ROE”) was 13.6%.

Following the strong financial results in the first half of 2019, the Board of Directors have recommended a first ever interim dividend to its shareholders of HKD 0.13 per share. 

Financial Results Summary

Notes:

1. Industrial operation profit includes profit from operational subsidiaries, joint ventures and associates which are under equity method
2. Adjusted NAV per share = [market value of listed investments held at the group level + the fair value of unlisted investments estimated by the management utilizing precedent transactions analysis or comparable company analysis - the net debt at the Group level]/ total shares issued by the Company

2019 Interim Financial Results Meeting and Presentation

Full details of the interim results announcement of Fosun International can be found on the Company’s website www.fosun.com and on the website of the Hong Kong Stock Exchange.

The management will present the Group’s key financial results and strategic outlook on 28 August 2019 at 9:30 am (Beijing/Hong Kong/Singapore). A live-video feed of the presentation is available via http://live.vhall.com/843059179 (ENGLISH) / (CHINESE).

A copy of the latest Investor Relations presentation can also be downloaded from the Company’s website.

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