00656.HK --

Fosun International Announces 2021 Interim Results Both Revenue and Profit Realized Growth, Industrial Operating Profit Increased 40% Year-on-Year

Release Time:2021-08-24 Author: Source: Pageviews:


2021 Interim Results Summary and Highlights:

 

ØRiding the wave of momentum, various financial indicators rebounded rapidly


Revenue and net profit both realized growth: Total revenue amounted to RMB70.41 billion, representing a year-on-year increase of 11%; net profit attributable to owners of the parent reached RMB4.06 billion, representing a year-on-year increase of 102%. Industrial operating profit reached RMB5.69 billion, a year-on-year increase of 40%. If excluding the impact from Fosun Tourism, it recorded a year-on-year increase of 53%.

Sound financial position with abundant liquidity. The interest bearing debt to total capital ratio was 55.7%, cash and bank balances and term deposits amounted to RMB106.08 billion. Moody’s updated the outlook on Fosun International’s ratings to ‘Stable’, the Group raised RMB36.1 billion through the open market financing.


ØIndustry Operations + Industrial Investment twin-driver strategy


Further deepened the Industry Operations: The COVID-19 mRNA vaccine (COMIRNATY®, also known as BNT162b2) has come into use under the government vaccination programs in Hong Kong SAR and Macao SAR, China; Fosun Pharma plans to supply 15 million doses of the COVID-19 mRNA vaccine to Taiwan region; The COVID-19 mRNA vaccine (BNT162b2) to be used in Chinese Mainland (excluding Hong Kong SAR, Macao SAR and Taiwan region) was under Phase II clinical trials and all relevant works were in good progress. “Laomiao” and “Yayi” brands under Yuyuan further expanded their store network by adding 285 stores, reaching 3,664 stores currently. Songhelou Noodle Restaurant kept on expanding its business. In the first half of 2021, the sales revenue from Songhelou Noodle Restaurant achieved nearly RMB200 million, in which about 50% of sales revenue from its chain store noodle shop business. Atlantis Sanya’s operating revenue increased by 152.1% year-on-year while its adjusted EBITDA increased by 309.1% year-on-year.

Strengthened investments in complementary businesses, successively realized a number of industrial investments with synergy and high growth potential: Nanjing Iron & Steel invested in Zhejiang Wansheng, a global leading new phosphorus-based materials manufacturer; Fosun Fashion entered an agreement to acquire 100% equity shares of Sergio Rossi, an Italian footwear company.

 

ØImplemented the FC2M strategy, and promoted the strategy of “Client-end as Top Priority, Maker-end as Top Leader”


C-end: Fosun FC2M ecosystem has a cumulative total of 376 million registered members, an increase of approximately 5% as compared to that of 31 December 2020.

M-end: In March, Gland Pharma announced that it would produce and supply up to 252 million doses of “Sputnik V”COVID-19 vaccine developed in Russia. In June, Yescarta® (Ejilunsai injection) of Fosun Kite, under Fosun Pharma, became the first CAR-T cell therapy product approved for launch in China. In July, Sisram Med was granted the right to sublicense Revance Therapeutics’ aesthetic indications of RT002 in Greater China.


ØEndeavouring to achieve multiplier growth and remained true to our original aspiration of contributing to society:


Fosun actively contributed to society through combating the pandemic, rural doctors, education and culture, and entrepreneurship support, and promoted the sustainable development of ESG (environmental, social and governance) in its entire industries.

Remarkable ESG performance: Fosun International’s MSCI ESG rating was A; Hang Seng Sustainability rating was A+; FTSE Russell ESG rating upgraded significantly.

 

(Hong Kong, Shanghai, 24 August 2021) Fosun International Limited (HKEX stock code: 00656), together with its subsidiaries (“Fosun International”, “Fosun” or the “Group”), today announced its financial results for the six months ended 30 June 2021 (the “Reporting Period”).

 

During the Reporting Period, the Group’s various financial indicators rapidly rebounded, and saw growth in both revenue and profit: total revenue reached RMB70.41 billion, an increase of 11% compared to the same period in 2020. Excluding the impact of the decline in Fosun Tourism’s revenue, the Group’s total revenue increased by RMB8.88 billion over the same period in 2020, representing a year-on-year increase of 15%. In addition, the profit attributable to owners of the parent amounted to RMB4.06 billion in the first half of the year, a significant year-on-year increase of 102%. Excluding the impact of Fosun Tourism, the profit attributable to owners of the parent was RMB5.68 billion, a year-on-year increase of 107%.

 

“As an innovation-driven consumer group, the only path we would like to achieve multiplier growth is to constantly create more value for customers.” Guo Guangchang, Chairman of Fosun International, said that after experiencing the unprecedented COVID-19 pandemic in 2020, 2021 is a new starting point for Fosun's further transformation. “Fosun, which is about to enter the year of ‘30 years’ establishment’, will keep on upholding its original aspiration of developing its business for good, inspired by its corporate culture of ‘Self-improvement, Teamwork, Performance, and Contribution to Society’, riding the wave of momentum, endeavouring to achieve multiplier growth, unremittingly providing high-quality products and services for families around the world, and creating greater value for the society.”

 

Riding the Wave of Momentum, the Group Realized High Growth in Many Segments

 

With the continuous strengthening measures of global pandemic prevention and control, major global economic markets have stabilized and improved amidst the volatile market. Fosun rode the wave of momentum and continued to iterate and upgrade its strategy, business, and organization, resulting in the persistent improvement in many segments of the Group.

 

In the first half of 2021, the overall revenue of the Group’s Health segment was RMB19.28 billion, a year-on-year increase of 18.7%. Benefiting from the strong growth of Fosun Pharma’s profit attributable to owners of the parent year-on-year and increase in the fair value of equity investments in the secondary market of the Health segment, the profit attributable to owners of the parent of the Health segment during the Reporting Period reached RMB1.21 billion, achieving a year-on-year increase of 233.6%.

 

The Group’s Happiness segment takes happiness ecosystem, product strengths, digitization, globalization, etc. as its core strategies to intelligently create a happy life for families worldwide. During the Reporting Period, the segment achieved an overall revenue of RMB28.46 billion, a year-on-year increase of 5.3%. Of which, Yuyuan’s jewellery and fashion segment recovered robustly, which led to the strong growth of Yuyuan’s revenue. At the same time, Jinhui Liquor and Shede Spirits under Yuyuan benefited from the sustained and stable recovery of the domestic economy and the notable recovery of the mid-to-high-end liquor consumption market. During the Reporting Period, the operation of Jinhui Liquor continued to improve steadily, and the operating performance of Shede Spirits achieved a significant year-on-year growth.

 

During the Reporting Period, the overall revenue of the Group’s Wealth segment was RMB19.65 billion, a year-on-year increase of 1.7%. Of which, the revenue of Insurance segment was RMB15.48 billion, achieving a year-on-year increase of 9.3%, which was mainly attributed to the business growth of Fosun Insurance Portugal and Peak Reinsurance. In addition, thanks to the stable and healthy development of core enterprises and the optimization of investment portfolio, profit attributable to owners of the parent of the Group’s Insurance segment turned from loss to profit significantly.

 

 

During the Reporting Period, the revenue of the Group’s Intelligent Manufacturing segment was RMB3.57 billion, a year-on-year increase of 202.2%. With the industry upward cycle, the operation of core companies such as Nanjing Iron & Steel and Hainan Mining has improved, and the profit attributable to owners of the parent was RMB1.63 billion, recording a year-on-year increase of 80.7%.


Exerted Every Effort in “Industry Operations + Industrial Investment”, Industrial Operating Profit Increased 40% Year-on-Year

 

In the first half of 2021, the Group’s Industry Operations withstood the test of a severe challenge brought by the pandemic. Industrial operating profit reached RMB5.69 billion, a year-on-year increase of 40%. Excluding the impact of Fosun Tourism, the year-on-year growth was 53%. Leveraging on the solid and profound industry operations, impact of the pandemic have diminished and many segments and businesses of the Group gradually recovered and resumed growth.

 

The COVID-19 mRNA vaccine (COMIRNATY®, also known as BNT162b2) has come into use under the government vaccination programs in Hong Kong SAR and Macao SAR, China. During the Reporting Period, COMIRNATY® realized revenue of over RMB500 million. In addition, Fosun Pharma plans to supply 15 million doses of the COVID-19 mRNA vaccine to Taiwan region, the COVID-19 mRNA vaccine will be donated to relevant agency of disease control of Taiwan region for local vaccination. Meanwhile, the COVID-19 mRNA vaccine (BNT162b2) to be used in Chinese Mainland (excluding Hong Kong SAR, Macao SAR and Taiwan region) was under Phase II clinical trials and all relevant works were in good progress.

 

During the Reporting Period, the jewellery and fashion segment of Yuyuan kept on its momentum of store network expansion. Brands such as “Laomiao” and “Yayi” further expanded their store network by adding 285 stores, reaching 3,664 stores currently. “Laomiao” improved its quality of channels by setting up 22 “Laomiao” Good Luck Trendy stores. “Laomiao” Ancient Gold launched the “Zhu Yun Nian Nian” new series products which achieved a new height and recorded a sales revenue of RMB1.6 billion in the first half of 2021. “Duo Rou Dou Fu” series, the first original IP created by “Laomiao”, was launched in May 2021 and recorded a sales revenue of RMB34 million. The Omni channel sales of “Yayi” grew 65% year-on-year.

 

Songhelou Noodle Restaurant, the catering brand under Yuyuan, constantly expanded its business and set up restaurants covering eight core CBDs in Beijing, Shanghai, Suzhou, Nanjing, Ningbo, Hangzhou, Wuxi and Shenzhen, successfully exploring the southern China market. During the Reporting Period, Songhelou Noodle Restaurant increased the number of stores to 32. There are 37 stores contracted but yet to open and it is expected to reach 100 stores by the end of 2021. In the first half of 2021, the sales revenue from Songhelou Noodle Restaurant achieved nearly RMB200 million, in which about 50% of sales revenue from its chain store noodle shop business.

 

Take Atlantis Sanya, a subsidiary of Fosun Tourism, as an example, in the first half of 2021, Atlantis Sanya maintained an active growth momentum, its operating revenue increased by 152.1% from the same period last year to RMB835 million, adjusted EBITDA amounted to RMB411 million, an increase of 309.1% compared with the same period last year, fully demonstrating its operational capabilities to rapidly expand market share under the normalization of pandemic prevention and control.

 

There were many highlights in the Group's Industrial Investment, as part of its “Industry Operations + Industrial Investment” twin-driver strategy in the first half of 2021. The Group successively realized a number of Industrial Investments with high synergy and high growth potential: Nanjing Iron & Steel invested in Zhejiang Wansheng, a global leading new phosphorus-based materials manufacturer①, Fosun Fashion entered an agreement to acquire 100% equity shares of Sergio Rossi, an Italian footwear company.

 

Looking forward to the second half of the year, as the global economy enters the era of normalization of pandemic prevention and control, production, living and tourism consumption are gradually adapting to the new social environment. It is expected that the Group’s various financial and operational indicators will continue to pick up steadily.

 

When explaining how to better implement the twin-driver strategy of “Industry Operations + Industrial Investment” in the future, Guo Guangchang said that, “Fosun is currently building a “Fosun Entrepreneurship/Ecosystem System” (FES) in full swing, as part of its key plan to better implement the twin-driver strategy. By applying FES operational + investment management system, we strive to support our core business segments’ growth by our complementary industrial investments. At the same time, we empower our companies worldwide by formulating and refining the best operational management practices learnt from our past experience. We wish to constantly enhance customers’ satisfaction with the FES operating management system and strive to develop ‘co-entrepreneurial spirit’ and create synergies within Fosun’s ecosystem, so as to endeavor to achieve the Company’s operational goal of multiplier growth”.

 

Multiplier Effect of FC2M Began to Appear, the Cumulative Number of Registered Members of Fosun's FC2M Ecosystem Reached 376 Million


In 2018, Fosun proposed its mission to serve one billion families around the world, and build a FC2M (Fosun Client to Maker) ecosystem centered around family customers. Since 2019, the Group has comprehensively promoted the twin-driver strategy of “Industry Operations + Industrial Investment”, endeavored to achieve the multiplier effect within its ecosystem, and provide its customers with more good products in the FC2M ecosystem through profound Industry Operations.

 

At the M-end (makers), the Group has continuously polished its product strengths, and a number of good products have become hits, fully demonstrating the strong product strengths of the Group's continuous innovation. In March, Gland Pharma, an India-listed injectables company, announced that it would produce and supply up to 252 million doses of “Sputnik V”COVID-19 vaccine developed in Russia. In June, Yescarta® (Ejilunsai injection) of Fosun Kite, under Fosun Pharma, became the first CAR-T cell therapy product approved for launch in China. In July, Sisram Med, the world’s leading provider of energy-based medical aesthetic treatment systems, was granted the right to sublicense Revance Therapeutics’ aesthetic indications of RT002 in Greater China.

 

At the C-end (clients), Fosun put forward and continued to implement the “C-end Top Priority” strategy, and is committed to leveraging Internet platforms and digital methods, integrating online and offline scenarios, to continuously acquire and manage users, and create value for its users. At the same time, Fosun will continue to create value in its ecosystem. As of the end of June 2021, the cumulative number of registered members of Fosun’s FC2M ecosystem reached 376 million, an increase of approximately 5% as compared to that of 31 December 2020.

 

Continuous Optimization of Capital Structure to Empower Long-term Stable Business Development

 

While building the FC2M ecosystem centered on Industry Operations, the Group continued to promote financial optimization of funds and capital, forming a benign financial ecosystem, thereby consolidating the financial foundation to foster long-term and sound business development.

 

In terms of investment, the Group centered around the four segments to focus on industries that form deep synergies with its existing industries, empowering existing industries with Health and Happiness as its core, consolidating its position in the industry. At the same time, the Group is gradually expanding into industries with high added value, and strengthening investment management, actively promoting the balance of investment and disposal, optimizing the industrial structure while improving capital allocation.

 

In terms of cash and debt management, the Group actively reserved funds, managed mature debts and optimized debt structure. In the first half of the year, the Group keenly seized opportunities during the debt capital market window and achieved remarkable results in domestic and overseas financing. During the Reporting Period, the Group raised RMB36.1 billion through the open market financing. As of July 2021, it has issued a total of approximately US$1.6 billion offshore bonds. While obtaining sufficient funds and optimizing financing costs, it actively managed mature debts and improved the maturity structure of debts through early redemption offers, etc.

 

At the same time, Fosun has also continued to explore financial breakthroughs and innovative financing. During the Reporting Period, the Group became the first Chinese private enterprise to successfully establish the Euro yield curve; Shanghai Fosun High Technology issued the first US dollar bonds by a Chinese enterprise in the Shanghai Free Trade Zone in July 2021, exploring new financing channels for the Company.

 

In terms of ratings, Moody’s upgraded the outlook on Fosun International’s ratings to “stable” in February 2021. As of the end of the Reporting Period, the Group’s interest bearing debt to total capital ratio was 55.7%, a decrease of 1.2 percentage points from the end of June 2020, while cash and bank balances and term deposits reached RMB106.08 billion, with abundant liquidity and sound financials. The Group will constantly promote steady optimization of funds and capital to foster rapid business development.

 

Remained True to Its Original Aspiration of Contributing to Society, Promoted ESG Sustainable Development of Its Industries

 

Regarding social responsibility, Fosun achieved outstanding performance in the aspects of environmental, social and corporate governance. While Fosun is developing rapidly, it also leveraged its own industrial advantages to actively contribute to society through public welfare activities such as supporting the combat against the pandemic, rural doctors, education and culture, and entrepreneurship support.

 

In April 2021, the pandemic prevention and control situation in India and other countries and regions deteriorated. Fosun Foundation joined hands with its friendly enterprises to swiftly donate medical supplies that were urgently needed in India such as oxygen concentrators, ventilators, and surgical masks, etc. to India, Up to now, Fosun Foundation donated over 10 million pieces of medical supplies to various provinces and cities in China, as well as overseas countries such as India, Cambodia, Indonesia, and Nepal, etc. in 2021. Besides, since the outbreak of COVID-19 in 2020, Fosun has donated a cumulative total of over 147 million pieces of medical supplies globally②.

 

In July 2021, Fosun Foundation announced its donation of RMB50.00 million of funds and resources to Henan province on the day after the torrential downpour. It rapidly gathered the supplies needed by the frontline as urgent disaster relief, including daily necessities such as water and food, professional supplies such as pumps and disinfectants, and high-technology products such as amphibious, all-terrain rescue vehicles and mobile Photographic X-ray equipment. In addition, Fosun Foundation collaborated with Fosun’s member companies and partners to initiate the “New Mihe Project” to provide assistance in the reconstruction of Mihe Health Center and the primary healthcare system in Gongyi City in the long term.

 

During the Reporting Period, the Group continued to promote the sustainable development of ESG (environmental, social, and governance) in its entire industries. As of the end of the Reporting Period, Fosun International’s MSCI ESG rating was A and the Hang Seng Sustainability rating was A+; and it has been included as a constituent stock of the Hang Seng Corporate Sustainability Benchmark Index. In addition, it will be included as a Hang Seng ESG 50 Index as well (with effect from 6 September 2021). In the first half of 2021, Fosun International’s FTSE Russell ESG rating was upgraded significantly, which is higher than the industry average.

 

In order to implement the “Industry Operations + Industrial Investment” twin-driver strategy, during the Reporting Period, the Group continued to evolve and upgrade the organization and mechanism, focusing on its key strategies of globalization and FC2M ecosystem, and conformed to the law and other regulations and operated efficiently. It systematically sorted out the positioning, management models and authorization mechanisms of organizations at all levels, strengthened the line’s capability led by CXO, and developed a quality operating system with Fosun’s characteristics to consolidate the foundation of Industry Operations while promoting normalization and systemization of the revolution of management. At the same time, the Group has gathered key talents with the concept of “co-entrepreneurship”, evolved the global partner evaluation, incentive and exit mechanisms, implemented a systematic talent inventory and succession plan, and built a leading talent echelon with high standards and strict requirements.

 

Guo Guangchang said, “In the future, Fosun will uphold the principles of ‘multiplier growth, co-entrepreneurship and commitment’ to lead the governance and development of the Company. We strive to shoulder more social responsibilities, constantly create value and give back to the society, helping to promote high-quality development and share prosperity. Meanwhile, we will further deepen our global partnership system and incentive mechanism, building a FC2M ecosystem of healthy and happy lifestyle for global families. ”  





 

n2021 Interim Results Announcement

Full details of the interim results announcement of the Fosun International can be found on the Company’s website (www.fosun.com) and on the website of the Hong Kong Stock Exchange. Fosun International’s 2021 interim results presentation will be held on 25 August 2021, from 9:30 a.m. to 11:00 a.m. and from 1:30 p.m. to 3:30 p.m. The presentation will be divided into a morning session (results announcement) and an afternoon session (sharing of Fosun’s business outlook and strategies on its four major segments). The live webcast is available in the links below. The latest PPT presentation of the Company is also available for download on Fosun’s website.

 

Chinese live webcast:

https://v.zmengzhu.com/play/10227315?i=58161&ticket_id=10227315&mod=play

English live webcast:

https://v.zmengzhu.com/play/10227312?i=58161&ticket_id=10227312&mod=play

 

nAbout Fosun

Fosun was founded in 1992. Fosun’s mission is to provide high-quality products and services for families around the world in health, happiness, wealth and intelligent manufacturing segments. Fosun International Limited is an innovation-driven consumer group that has been listed on the main board of the Hong Kong Stock Exchange (stock code: 00656.HK) since 2007, with total assets of RMB778.9 billion (c. US$120.6 billion) as of 30 June 2021. Fosun International ranks No.459 on the 2021 Forbes Global 2000 List.

 

nCautionary Statement Regarding Forward-Looking StatementsThis press release includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that Fosun International Limited (the “Company”) expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward-looking statements. The Company’s actual results or developments may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties, and other risks and factors beyond our control. In addition, the Company makes the forward-looking statements referred to herein as of today and undertakes no obligation to update these statements. The financial figures of 2021 in this press release are calculated using the average exchange rate for the Reporting Period January 2021 to June 2021 (USD/CNY=6.47144, HKD/CNY=0.83384, EUR/CNY=7.80165), and period-end exchange rate as of 30 June 2021 (USD/CNY=6.46010, HKD/CNY=0.83210, EUR/CNY=7.68620), unless otherwise stated.

 

*Note: Industrial operating profit includes the profit contribution of the Group’s industrial operating subsidiaries and joint ventures calculated by the equity method.

①As of the end of the Reporting Period, Nanjing Iron & Steel has not yet completed the acquisition of the 29.98% equity interest in total.

②Only refers to overseas countries and regions; including donation and sales.