Xu Xiaoliang, Co-CEO of Fosun International: Fosun, a Synonym for Happiness
Release time:2022-04-19
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After Fosun International announced its 2021 annual results, Bloomberg Businessweek/Chinese Edition conducted an interview with Xu Xiaoliang, Co-CEO of Fosun International. The article was published in the magazine on 13 April with the title of “Fosun, a Synonym for Happiness, Creating Happier Lives for Families Worldwide for 30 Years” The following is the translation of the article:
Fosun, a synonym for happiness
Creating happier lives for families worldwide for 30 years
Founded in 1992, Fosun is a global innovation-driven consumer group. In 2007, Fosun International Limited (stock code: 656.HK) was listed on the main board of the Hong Kong Stock Exchange. After 30 years of development in the four major segments of Health, Happiness, Wealth, and Intelligent Manufacturing, Fosun has ranked among the top 50 of China's Top 500 Private Enterprises for three consecutive years, and ranks No.459 on the 2021 Forbes Global 2000 List. While expanding its businesses, Fosun actively fulfills its corporate social responsibility and takes “creating happier lives for families worldwide” as its mission. In 2021, its MSCI ESG rating was enhanced to AA, and it was the only holding group in Greater China with an MSCI ESG rating of AA.
In 2021, the pandemic situation remained volatile globally. Fosun International leveraged its long-term accumulation of innovation and industrial capabilities to drive steady growth in the Group’s four major segments: Health, Happiness, Wealth, and Intelligent Manufacturing, demonstrating its resilience and risk resistance capacity. In 2021, the Group's core financial indicators performed brilliantly, the total revenue for the year reached RMB161.29 billion, representing a year-on-year increase of 18%; the profit attributable to owners of the parent amounted to RMB10.09 billion, representing a year-on-year increase of 26%; the profit of industrial operations amounted to RMB10.59 billion, representing a year-on-year increase of 30%. The 10-year compound growth rate of the Group's total revenue, profit attributable to owners of the parent, and profit of industrial operations reached 11%, showing a sustainable gradual upward trend.
Xu Xiaoliang, Executive Director and Co-CEO of Fosun International
When looking back on the Group’s development in the past 30 years, Xu Xiaoliang, Executive Director and Co-CEO of Fosun International said that Fosun has undergone many great changes since its establishment, but the ultimate goal of the changes is to better practice its original aspiration and mission. Fosun has always adhered to the core values of “Self-improvement, Teamwork, Performance, and Contribution to Society” and strives to achieve the mission of creating happier lives for families worldwide through investment deployment and strategic upgrades. The nine words of “Sustain Resilience and Accumulate Capabilities to Empower the Future” very well reflect the efforts of Fosun over the past 30 years, and also very well demonstrate Fosun’s hope for the future. After 30 years of development, Fosun has developed into one of the few domestic companies that is not only equipped with global operations and investment capabilities, but also has accumulated profound technology and innovation capabilities. Fosun's globalization capabilities will create greater value in the future, and continuous investment in innovation will also translate into future benefits to the Group.
Enhanced four core competencies to holistically drive corporate development
Fosun, which was founded in 1992, is about to celebrate its 30th anniversary of the founding of the Company this year. Fosun's management proposed four core competencies, namely FC2M (Fosun Client-to-Maker) ecosystem, globalization, technology and innovation, and FES management system (Fosun Entrepreneurship/Ecosystem System) to drive the company's development. Xu Xiaoliang believes that these core competencies developed by Fosun over the past 30 years are “not only the support for Fosun's achievements today, but also the driving force for rapid ‘multiplier growth’ in the future."
The FC2M ecosystem has completely opened all industries, scenarios and platforms. With the objectives of solving customer needs and achieving customer satisfaction, the FC2M ecosystem continuously provides products and services that satisfy customers; while being rooted in China, the globalization strategy enhanced the operational efficiency and impetus for business development of the Group’s global organization and local operations. In 2021, 42% of the Group’s sales revenue came from overseas countries and regions, and the Group has established business presence in nearly 30 countries and regions; the Group realized multiplier growth driven by its robust technology innovation capabilities. In 2021, Fosun invested RMB8.9 billion (including expensed and capitalized R&D investment) to deploy in the cutting-edge technology and innovation industry. To date, it has obtained more than 1,500 patents for inventions and has more than 500 projects under development; the FES management system integrates the Group's practical experience in industry operations and investment to help Fosun achieve the goal of sustainable high growth.
Xu Xiaoliang said, “Since Fosun’s establishment, we have yet to summarize and refine our past successful experience. Therefore, we have established the FES management system. The essence of FES is a management system tailored by Fosun for its own development. It refines the best practices in industry operations and investment accumulated over the past 30 years into replicable and scalable tools and processes. Centered around FES, we have built the five modules of ecosystem growth, entrepreneurial organizations, value growth, refined operations, and risk control. Based on these five modules, we summarize and refine more than 100 tools, and put FES into practice, thereby forming a flywheel to drive multiplier growth, continuously building growth momentum, and accumulating experience during the process to form a continuously evolving FES system.”
Four major segments form a diversified portfolio to create a blueprint for happiness
Taking “happiness” as the core foundation of a family, Fosun creates a family happiness ecosystem through four major segments: Health, Happiness, Wealth, and Intelligent Manufacturing. Xu Xiaoliang pointed out that the foundation of happiness is living a quality life and maintaining good physical and mental health. In 2021, the Group's pharmaceutical, devices and diagnosis, and healthcare services and products developed synergistically and steadily. The revenue of the Health segment amounted to RMB43.98 billion, representing a year-on-year increase of 27.1%. Among them, the first domestically approved biosimilar drug, HLX01 rituximab (Han Li Kang), has benefited more than 100,000 patients and families within three years of its launch; while Fosun Kite’s Ejilunsai injection (Yi Kai Da) became the first CAR-T cell therapy approved for launch in China, opening a new era in cancer immunotherapy in China.
As the average human life expectancy increases, there is a higher demand for superior financial management. The Group continued to improve capital efficiency and returns in its Wealth segment. Last year, the total revenue of the Wealth segment reached RMB43.7 billion, representing a year-on-year increase of 2.8%, while the net profit reached RMB5.16 billion, representing a year-on-year increase of 13.5%.
Atlantis Sanya under Fosun's Happiness segment is the top destination for family vacations
Yuyuan, the cultural landmark of Shanghai under the Fosun’s Happiness segment, is a photogenic spot for families and young people
The Happiness segment was the most affected by the epidemic in the past year, but it was also the segment which recovered and rebounded the quickest. In 2021, the revenue of the Group's Happiness segment reached RMB66.9 billion, representing a year-on-year increase of 19.4%. The jewelry and fashion business of Yuyuan, a subsidiary of the Group, maintained robust growth, with a net opening of 602 stores throughout the year, bringing the total number to 3,981 stores at the end of the year. It also successfully launched a new brand of lab-grown diamonds, LUSANT. Fosun Tourism’s operating indicators improved significantly, and the total revenue for the year amounted to RMB9.26 billion, representing a substantial year-on-year increase of 31.2%. Its benchmark hotel, Atlantis Sanya recorded sales of RMB1.46 billion in 2021, outperforming its peers; the Winter Olympics has brought development opportunities for the ice and snow industry. Fosun Tourism currently operates 15 ski resorts in the Alps, and is planning to open new ski resorts in Hokkaido and the Chinese Mainland, and continue to speed up expansion in the future.
The total revenue of the Intelligent Manufacturing segment in 2021 was RMB7.74 billion, representing a year-on-year increase of 56.3%. While deepening industry operations, this segment also continuously improves the industrial ecosystem through quality investment. Among them, the weathering resistance of the special steel provided by Nanjing Iron & Steel for the Winter Olympics was eight times more resistant than that of ordinary steel. The special weathering steel was widely use in the “Snow Dragon” (雪游龍) (National Sliding Centre), the most difficult venue to design in the Winter Olympics construction project.
“Health is the foundation, wealth is the support, and the rest is more of a happy experience. These three are the three core pillars of families’ pursuit of happiness throughout the ages and in the future.” Xu Xiaoliang explained that with the development of science and technology, extended human life expectancy and more diverse family structures, there will be more pursuits for health, happiness and wealth, “Fosun will insist on connecting various industries in the Happiness segment, and is confident that there will be a lot of room for development in the future.”
Remarkable ESG achievements to create happier lives
Fosun International receives two ESG awards “ESG Leading Enterprise Award” and “ESG Leading Social Initiative Award” from Bloomberg Businessweek/Chinese Edition, in recognition of Fosun's strong commitment to social responsibility for actively promoting ESG sustainable development and contributing to the global fight against the epidemic
While delivering outstanding performance, Fosun continues to give back to the society in the fields of environmental protection, anti-epidemic and disaster relief, rural doctors, education, and culture, etc.
Regarding the environment, Fosun established the Carbon Neutrality Committee based on the national “carbon neutrality” strategy, and set goals to achieve carbon peaking in 2028 and “carbon neutrality” in 2050. The Group's Atlantis Sanya became the first tourism company to obtain the carbon neutrality certificate in Hainan Province; the Bund Financial Center (BFC), a landmark in Shanghai, has also obtained LEED Platinum certification with a score of 97 points, setting a new world record.
At the social level, Fosun supports rural revitalization through the public welfare program “Rural Doctors”. By the end of 2021, the project has covered 73 counties across the country, supported 24,000 rural doctors, and benefited 3 million grassroots families. Fosun has also supplied 200 million vials of anti-malarial injections of artesunate in Africa, and saved more than 40 million lives of severe patients with malaria, most of whom are children under five years old.
Since the COVID-19 outbreak in early 2020, Fosun has immediately initiated the global medical supplies deployment plan to make continuous contributions to China’s and overseas’ fight against the epidemic. In the face of the severe fifth wave of the epidemic in Hong Kong this year, Fosun immediately announced the donation of HK$10 million anti-epidemic materials to Hong Kong. Since late February, Fosun Foundation has donated a total of 1.15 million pieces of anti-epidemic materials to Hong Kong in three batches. The epidemic relief action in Hong Kong has prioritized the distribution of anti-epidemic materials to chronically ill patients, the elderly, children and other high-risk groups for COVID-19 with low immunity, as well as grassroots families, frontline anti-epidemic workers, volunteers and frontline service personnel, etc.
Recently, the epidemic prevention and control in the Chinese Mainland has also been strengthened. Taking Shanghai, where Fosun is based, it is also at a critical moment for epidemic prevention and control. While supporting Hong Kong to fight the epidemic, Fosun set up a Fosun volunteer anti-epidemic team in Shanghai to help deliver anti-epidemic materials to frontline anti-epidemic personnel and volunteers. Fosun Foundation continues to respond to the donation requests from various parties. As of 7 April 2022, it has made 108 donations and distributed more than 920,000 pieces of materials, such as surgical masks, protective suits, disinfectants and other anti-epidemic materials, as well as food, drinking water and other daily supplies.
In addition to humanitarian donations, Fosun is also committed to the research and development of vaccines and drugs. Fosun joined hands with Germany's BioNTech to develop the mRNA COVID-19 vaccine (COMIRNATY®), playing a positive role in the prevention and control of the epidemic in Hong Kong SAR, Macao SAR and Taiwan region.
During the critical period of Shanghai's epidemic prevention and control in March, Fosun quickly established the "Warming Spring Anti-epidemic Volunteer Action" caring convoy, in which ONE Fosun employees volunteer to help deliver materials to frontline anti-epidemic personnel and volunteers
Fosun's investment in ESG has been recognized by many parties. Fosun's MSCI ESG rating was upgraded to AA. It also ranks among the top in the Hang Seng Sustainability Index, FTSE Russell ESG and S&P CSA ESG scores.
Established a talent development mechanism to upgrade the Group’s elite team
In order to stride towards the next influential 30 years, Fosun is committed to developing a talent pool mechanism and establishing a global partnership system. The global partnership system injects new vitality into Fosun's development through coopetitive (cooperative + competitive) ranking, job rotation, position change, and multi-level and multi-dimensional incentive mechanism in the ecosystem. Xu Xiaoliang pointed out that, “Fosun needs partners with entrepreneurial spirit, which is why we have to build a team of partners at different levels, dimensions and functional lines.” In the past year, the Fosun's partners scale has been upgraded again. The Group now has more than 140 global partners, more than 450 industry partners, more than 350 functional line partners and 37 innovative partners. In the future, the Group hopes to bring the total number of global partners to 300 with a team scale of 3,000 partners to continuously promote the development of its core businesses.
Looking into the future, Xu Xiaoliang said, “Regardless of the economic cycle, Fosun will always maintain its resilience, stay true to its goals, adhere to the twin-driver strategy and global operations, and continuously upgrade the Group's organization, and accumulate capabilities with sound deployment.”
Establish for 30 years, continue to uphold its original aspiration and create happier lives for families worldwide
As Fosun enters into the 30 years of establishment in 2022, Xu Xiaoliang said, “One of our greatest successes along the way is that we remain true to our original aspiration of ‘Contribution to Society’ we set at the beginning of our business. We are more certain that ‘society’ means families, and we have further consolidated our mission - creating happier lives for families worldwide. We aim at creating a healthy, happy, and wealthy ecosystem.” In fact, Fosun has undergone many changes in the past 30 years of development. In addition to the scaling of assets, the number of employees, and business coverage, the development strategy also has different priorities at different stages, such as from combining China’s growth momentum with global resources, to the mutual connection between China and the world. However, Fosun has always been adhering to the mission of “creating happier lives for families worldwide” as people's pursuit of happier and brighter life remains unchanged regardless of the external situation, and the significance of Fosun’s existence is to bring more warmth and love to the society.
Xu Xiaoliang said, “Happiness is a very vague concept. Even with specific meanings such as health, happiness and wealth, happiness still seems very abstract. However, thanks to Fosun and Fosun's industrial ecosystem, happiness is, in fact, very tangible. It can be a vacation at Club Med, enjoying moments of joy with family; it can be a bowl of soup noodle from Songhelou, savoring the classics; it can be a treatment of Yi Kai Da, rekindling the hope of life; it can also be a Hangzhou-Taizhou high-speed rail ticket, leading to new direction. All in all, happiness is Fosun, and it is also the direction that all Fosuners will strive for in the next 30 years.”
Supporting Hong Kong and Shanghai to combat against the epidemic
Bloomberg Businessweek/Chinese Edition has also published a special page right after the interview article, demonstrating Fosun’s anti-epidemic efforts in Hong Kong and Shanghai. Here below is the translated version of the special page.
Fosun has been ceaselessly supporting the fight against the epidemic
Supporting Hong Kong’s anti-epidemic efforts
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After the Lunar New Year in February |
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2.19 |
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2.25 |
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3.10 |
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3.19 |
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…
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Protecting Shanghai against the epidemic
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March |
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3.12 |
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3.14 |
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3.16 |
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3.19 |
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3.28
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… |
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(The above data is as of 30 March)
(The article is sourced from Bloomberg Businessweek/Chinese Edition and the above text is a translation version of the article with additional background information provided.)
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