In the first half of 2024, the global macroeconomic environment remained challenging. However, Fosun International (00656), which recently announced its interim results, steadfastly pushed forward its strategic focus. As a result, its four core subsidiaries, namely Yuyuan, Fosun Pharma, Fosun Insurance Portugal and Fosun Tourism Group (“FTG”), all achieved leading market positions in their respective industries. Fosun International’s industrial revenue has continued to grow, and the improving profit outlook indicates an imminent potential for share price appreciation.

Despite a complex macroeconomic environment, Fosun International’s overall revenue continued to grow steadily, with solid results improvement in the first half of 2024. The Group’s total revenue amounted to RMB97.84 billion, and its industrial operation profit maintained growth, reaching RMB3.47 billion. The four core subsidiaries achieved a total revenue of RMB72.17 billion, maintaining year-on-year growth and accounting for 74% of the Group's total revenue. Xu Xiaoliang, Executive Director and Co-CEO of Fosun International, stated, “Fosun's industry operations are filled with highlights. Taking our Happiness segment as an example, Fosun Tourism Group’s revenue grew 10.5% compared to the same period last year, with Club Med and Atlantis Sanya achieving record-high performance. Yuyuan's revenue amounted to RMB27.57 billion, with net profit attributable to shareholders reaching RMB1.14 billion." Fosun always regards innovation as the core strategy of development, and Xu Xiaoliang takes pride in this, "Fosun is committed to R&D and innovation, having invested RMB3.5 billion in technology innovation. Looking ahead, we will continue to increase our investment in cutting-edge technologies such as biopharmaceuticals and advanced medical devices.”

Integrating with a global perspective, where mature global operations serve as growth drivers

Amid the current domestic economic “involution,” Fosun enjoys a first-mover advantage in globalization. Xu Xiaoliang emphasized that Fosun’s globalization capabilities were not developed in a day, "In the course of globalization, Fosun has achieved a 55% compound annual growth rate in its overseas business over the past decade. This growth is attributed to Fosun's commitment to a long-term overseas strategy, establishing an industrial presence in 35 countries and regions around the world. Currently, we have 48,500 employees overseas. In the first half of this year, overseas revenue accounted for 47% of Fosun's total revenue, totaling RMB45.87 billion.” Previously, Fosun’s globalization strategy was mostly about investment. Today, Xu Xiaoliang stated that, Fosun’s globalization strategy emphasizes building global R&D, business development and sales capabilities. "Fosun has transitioned from establishing a global presence to entering the phase of global operations. For example, Fosun Insurance Portugal has continued to maintain absolute leadership in its domestic market by integrating the best medical institutions and the largest non-state-owned listed banks. Effective innovation integration has continuously reinforced its leading position in the industry. More importantly, it has actively expanded beyond the Portuguese market in recent years to further develop in Spanish and Portuguese-speaking countries, achieving remarkable business growth and maintaining leadership in markets such as Peru and Bolivia. Looking ahead, Fosun will adhere to this approach to globalization and will ensure its core industries achieve high-quality development through in-depth global operations.”

Adopting an asset-light strategy and collaborating with key partners to create greater value

This year, in response to changing domestic and international market conditions, Fosun has continued to push forward its “business streamlining and core business-focused" strategy. Xu Xiaoliang pointed out that the key logic revolves around the issue of matching and mismatching between capital and assets. "If Fosun holds many heavy assets, it creates a mismatch because private enterprises do not have an advantage in capital costs. Therefore, Fosun emphasizes an asset-light strategy and collaboration with key partners. State-owned enterprises often lack complementary assets, while Fosun has the ability to enhance asset operation efficiency. By integrating the strengths of both sides, we create a win-win situation. For example, the phase II of Taicang Alps Resort project was officially signed in June 2024. The phase II project, with a total investment of over RMB5 billion, is funded by the Taicang Municipal Government and operated and managed by FTG. As the operator, we ensure asset operation efficiency while driving regional economic development, resulting in significant mutual benefits.”

Recently, FTG has also been intensifying efforts to promote the "ice and snow strategy." Xu Xiaoliang noted that this is a general trend, "Since the Winter Olympics, China's ice and snow consumption has surged, with the number of leisure ice and snow tourism visits in China reaching 312 million. Currently, the skiing population in China accounts for only 1% of the total population, compared to 10%-15% in mature markets such as Europe and North America, indicating significant growth potential. Club Med currently operates 67 resorts globally, including 24 winter resorts, with 3 winter resorts located in China. With a mature and leading model and management experience in the ice and snow tourism sector, and considering the rising trend of ice and snow tourism in China, we see this as a key strategic focus. On the one hand, we are actively developing both indoor and outdoor winter resorts in China, managing them with an asset-light strategy to ensure both skiing and entertainment run in parallel. On the other hand, we aim to strengthen connections between China and the global market, aspiring for China to be not only a destination for ice and snow tourism but also a significant source of global tourists."