Chen Qiyu, Co-CEO of Fosun International: During the Two Years of the Epidemic, Fosun Deepens Industry Operations + Investment to Build “Internal Capabilities”

Release time:2022-04-07 Content sourced from: Page View:
The total revenue for the year was RMB161.29 billion, a year-on-year increase of 18%; the net profit attributable to owners of the parent was RMB10.09 billion, a year-on-year increase of 26%; the profit of industrial operations was RMB10.59 billion, a year-on-year increase of 30%; the Group continued to establish in-depth industry operations in over 30 countries and regions around the world, revenue from overseas countries and regions amounted to RMB67.7 billion, accounting for nearly  42% of the total revenue for the year; investment in technology and innovation for the year was RMB8.9 billion. The Group has more than 1,500 patents for inventions and more than 500 new products under development…

In the 30th year of entrepreneurship, Fosun International (00656.HK) delivered such performance. On the afternoon of 24 March, after the 2021 results briefing, Chen Qiyu, Co-CEO of Fosun International, concluded in an exclusive interview with Tencent News “Periscope” that benefited from Fosun's in-depth industrial development and building of “internal capabilities” in recent years, the information in the financial report represents “the achievements of our long-term adherence to the ‘profound industry operations + investment’ strategy, and our long-term investment in innovation to build ‘stamina’ for future growth."


Fosun International has been driving rapid global expansion through investment. After years of expansion, it has developed four major business segments: Health, Happiness, Wealth, and Intelligent Manufacturing across the globe. It has built a broad footprint spanning different industries and regions. At the World Economic Forum in early 2020, Guo Guangchang, Chairman of Fosun International, said to Tencent News “Periscope” that Fosun has shifted its focus from building global investment capabilities to building connections between different industries, cultivating internal capabilities, and deepening its industrial development.

To usher in the transformation, Fosun International made staffing adjustments in February 2020: Wang Qunbin, the veteran who founded Fosun along with the Company's founder Guo Guangchang, was promoted to Co-Chairman and no longer serves as CEO; Chen Qiyu and Xu Xiaoliang, who have long-term industry operations experience, were promoted to Co-CEOs, taking over the daily operations and management of the global enterprise.

The two years after the strategic shift, staffing adjustments, Chen Qiyu’s promotion to co-CEO are precisely the two years that the global pandemic has profoundly changed the world. During the interview, Chen Qiyu recalled that at the beginning of the reform, everyone was thinking, "How can we refine and build stronger operational capabilities based on the industrial resources that Fosun has accumulated in the past?"

On this basis, Fosun has fully entered the development stage driven by “Profound Industry Operations + Industrial Investment” in recent years to strengthened its “internal capabilities” centered around talent and the organization, enhance its core competencies, promote innovation-driven development, strengthen risk management and control, and open up the ecosystem, thereby developing a management system, FES (Fosun Entrepreneurship/Ecosystem System), which can be promoted and implemented across industries, regions, and countries. 

The organizational structure has also changed accordingly. In 2021, Fosun established four major committees of overseas operations, technology and innovation, ecosystem, and FES at the group level as the top priority. “The organizational structure is completely different from that of two years ago. On this basis, we have completed the building of the entire organization horizontally and vertically,” Chen Qiyu said. “From various perspectives, we must link Fosun's relatively loose industry operations to form an organization with closer linked industry operations, and enhanced operational direction, operational rhythm, and operational capabilities.”

The series of changes, Chen Qiyu thinks that, as Fosun is about to enter its 30th year, “Fosun must be good at M&A, good at investing in companies, good at operating companies, good at improving performance, good at implementing innovative technologies, and good at cultivating a systematic and internally mobile talent system. After the full reopening and recovery in the post-epidemic era, Fosun’s accumulations will reach a turning point, and a brand new organization will emerge.”

Seeking opportunities in the uncertainty of globalization

For the full year of 2021, Fosun’s revenue from overseas countries and regions accounted for 42% of the total revenue. In 2020, the proportion of Fosun's overseas revenue decreased due to the overseas epidemic. 

In addition to the epidemic, geopolitical conflicts, and the wave of deglobalization have brought many uncertainties to this company spanning different industries around the world.

However, Chen Qiyu thinks that more opportunities have emerged amid various uncertainties.

“After the global economy and life return to normal, the volatility in tourism, fashion, retail consumption and other industries will be reduced, which will present plenty of opportunities for our tourism industry.” In addition, many companies were on the edge of cash flow interruption during the epidemic, which “also provided opportunities for mergers and acquisitions, integration, and low-cost entry."

Regarding the geopolitical conflicts and deglobalization, Chen Qiyu said that Fosun thinks that even if there are recurring risks, it firmly believes that globalization is a major trend. Against this background, Fosun needs to build a closed loop of capabilities in various business segments around the world.

“Firstly, every single business must build a business capability closed loop in the global system.” Chen Qiyu said that for instance, the pharmaceutical industry must have global systemic capabilities in all aspects, such as R&D, manufacturing, and sales, and “the same thing goes for the tourism and fashion industries.” Secondly, regional operation capability. For some important regions, it is crucial to be able to operate independently in the region.

Approximately 22 million doses of Comirnaty® (mRNA COVID-19 vaccine) were sold

Fosun regards Comirnaty® (mRNA COVID-19 vaccine), which was developed in cooperation with BioNTech, as an example of its achievement of globalization and profound industrial development.

According to the information disclosed by Fosun, Comirnaty® (mRNA COVID-19 vaccine BNT162b2) has been authorized for use in more than 160 countries and regions. Comirnaty® was included in the vaccination program by the Government of the Hong Kong SAR and the Government of the Macao SAR in March 2021, and was rolled out in the Taiwan region of China in September 2021. As of the end of February 2022, over 20 million doses of the vaccine were administered in Hong Kong SAR, Macao SAR and Taiwan region. In 2021, approximately 22 million doses of the vaccine were sold.

The mRNA technology behind Comirnaty® began to rise in the fight against the global pandemic. It will play an important role in future infectious diseases and epidemic prevention, and will also be widely used in fields other than infectious disease prevention such as cancer treatment. Chen Qiyu told Tencent News “Periscope” that, “The technical capability of mRNA now seems to be the field that core pharmaceutical companies and large global pharmaceutical companies will pay attention to and enter in the future.” And through the cooperation with BioNTech, Fosun has also begun to accumulate and to create its own technology.

In addition to Comirnaty®, Fosun Pharma has recently signed a sub-licensing agreement with Medicines Patent Pool (MPP) to obtain authorizations to manufacture the oral COVID-19 treatments developed by two pharmaceutical companies, Merck and Pfizer, respectively. Chen Qiyu said that these two authorizations show that Fosun's system capabilities have been recognized by multinational companies and global organizations. Moreover, Fosun has also accumulated market capabilities in some low-income countries and markets such as Africa and India. It has initially formed a global operation system of R&D, production, and commercialization, and is continuously deep diving into overseas markets, comprehensively accelerating Fosun’s globalization.

Bullish on new energy and new materials in the field of technology and innovation 

Chen Qiyu emphasized that Fosun always focuses on the four business segments of Health, Happiness, Wealth, and Intelligent Manufacturing when looking for global business opportunities, but it also insists on exploring more technology-driven and innovation-driven opportunities.

“In the post-epidemic era, many lifestyles and work modes are changing, and these changes are driven by technology, so there will be many opportunities brought about by long-term investment in technology.” Chen Qiyu stated as early as 2018 that Fosun will invest a great amount in the field of technology and innovation in the next ten years.

According to the 2021 financial report, the Group's investment in technology and innovation for the year amounted to RMB8.9 billion. As of 31 December 2021, the Group owned over 1,500 patents for inventions in total with more than 500 new products under development.

Chen Qiyu said that in Fosun’s focus on the field of technology and innovation, in addition to continuing to explore R&D of new technology in its existing industries, such as biopharmaceuticals, gene therapy, cell therapy, etc., in the Health segment, Fosun is also bullish on many other fields.

The first is the field of artificial intelligence and intelligent ride-hailing. Chen Qiyu revealed that although Fosun has not yet set foot in autonomous driving, Fosun has formed some industrial layouts around this industry, "For example, the FFT that we acquired, provides intelligent production systems for the automotive industry, including the supply of some software systems. We have recently established several new companies, such as “Fosun Intelligent Travel”, which is a vehicle-road collaborative intelligent driving system, and intelligent management and control system. We have also begun to plan to develop in the direction of cockpit chips.” Chen Qiyu also revealed that Fosun is currently looking for resources, such as automotive chips, and technical partners and technical teams globally. 

The second is the field of new energy. As early as July 2018, Fosun announced that through its subsidiary Fosun High Technology and the funds it manages, it has invested in JEVE, a leading domestic new energy power battery company. Hainan Mining, another listed company under Fosun, also disclosed in August last year that it had invested in a 20,000-ton battery-grade lithium hydroxide project. Recently, through Nanjing Iron & Steel, Fosun will soon become the controlling shareholder of Wansheng, a leading producer of flame retardants for new energy vehicles.

The third is the field of new materials. Chen Qiyu explained that, Nanjing Iron & Steel's technological innovation, special weathering steel, was widely used in the “Snow Dragon” (National Sliding Centre) in the Beijing Winter Olympics 2022. As the approach to future transformation of Nanjing Iron & Steel's, new materials are also one of the fields that Fosun is currently exploring opportunities in.
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