Investor Open Day: Fosun Implements Business Streamlining and Resilience Building Strategy, Focusing on Core Businesses to Bring New Vitality
HONG KONG, June 8, 2023
HONG KONG, June 8, 2023 /PRNewswire/ -- On 8 June 2023, the 2023 Fosun International Investor Open Day was held in Shanghai. It was the first time that Fosun International had held a large-scale offline open day after the pandemic. More than 100 domestic and foreign investor representatives from BlackRock, J.P. Morgan Securities, UBS SDIC, Taiping Asset Management, CICC, GF Securities and other institutions participated in the event. The investor relations team of Fosun International gave investors an in-depth tour of Fosun Pharma headquarters, the Grand Yuyuan, the Bund Finance Center (BFC), etc. to learn more about the development of Fosun International's pharmaceutical, culture and tourism, consumer, medical aesthetics and other industries.
After winning out over the "perfect storm" in 2022, Fosun has been maintaining its strategic focus and accelerating the implementation of the business streamlining and core business-focused strategy. It has been widely recognized by investors for its sustained and sound financial performance, continuous consolidation of industry operations driven by innovation, and robust development momentum of its core businesses in the household consumption sector to build resilience. At the investor open day, management of Fosun International and its listed subsidiaries including Fosun Pharma, Shanghai Henlius, Fosun Tourism Group (FTG), Yuyuan Inc., Shede Spirits, Lanvin Group, Sisram Med, and Hainan Mining conducted face-to-face and in-depth exchanges with investors.
Fosun successfully won out over the "perfect storm" and affirmed by the capital market
In 2022, in the face of the complex and ever-changing external environment, Fosun successfully won out over the "perfect storm" and demonstrated strong strategic determination and execution capability in implementing its business streamlining strategy. Entering 2023, the results of this strategy are gradually emerging.
Alex Gong, Executive Director, Executive President, and Chief Financial Officer of Fosun International, shared that Fosun has adopted multiple measures to continuously optimize funds and capital structure and deleverage, thus the Group's liquidity pressure has been greatly eased. For the full year of 2022, the amount by contract value based on consideration set out in the divestment agreements exceeded RMB40.0 billion, bringing a cash inflow of nearly RMB30.0 billion at holding company level. As of the end of March 2023, Fosun successfully brought down holding-company debt by about RMB24.0 billion to RMB93.0 billion.
At the same time, Fosun has been actively expanding its financing channels to further consolidate capital buffer. In January this year, Fosun obtained a syndicated loan of RMB12.0 billion which was formed by five major state-owned commercial banks including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications as joint lead banks; in early May this year, Fosun's offshore multi-currency syndicated loan was officially launched, and it has obtained a loan of more than US$450 million in equivalent so far.
Investors who participated in the open day noticed that on 30 May, international rating agency S&P Global Ratings issued a report, raising the rating outlook of Fosun International to stable. S&P Global Ratings pointed out that Fosun secured sufficient sources of liquidity amid turbulence in the bond market, and successfully repaid all concentrated maturing bonds in the past three quarters. Moreover, Fosun's proportion of debts due over the next 12 months dropped significantly, and the stability of the debts improved significantly.
Chu Min, Chief Analyst of Social Services at Kaiyuan Securities, said: "Driven by strong strategic determination, Fosun International's fundamentals continue to improve, and its mid-to-long-term development has sufficient resilience and flexibility. Through face-to-face communication and on-site visit on the open day, we believe that Fosun's core business-focused strategy particularly in the household consumption sector with high growth potential, together with the Group's capability to leverage its global assets to graft global resources for global customers, will enable Fosun to achieve more valuable growth."
Innovation-driven strategy to lead the way with "world's first" and "China's first"
Innovation has always been the "core engine" that drives the development of Fosun. In 2022, Fosun's R&D investment reached RMB10.4 billion, representing a year-on-year increase of 17%. Its long-term R&D investment has also continued to reap results.
At the event, persons in charge of Fosun Pharma and Shanghai Henlius introduced the latest progress of multiple "world's first" and "China's first" products in the Health segment under the empowerment of global operations.
Since its launch in March 2022, Shanghai Henlius' self-developed HANSIZHUANG (serplulimab injection) has been approved for three indications in China, and has become the world's first anti-PD-1 monoclonal antibody approved for the first-line treatment of small cell lung cancer. It had generated a revenue of more than RMB300 million within nine months of its launch. In the first quarter of this year, HANSIZHUANG achieved a revenue of RMB249.8 million in the domestic market, among which the monthly revenue exceeded RMB100 million for the first time in March, marking that this innovative drug has entered a new stage of sales growth, and the commercialization of this product has gained robust momentum.
In addition, the United States (U.S.) biologics license application (BLA) of HANQUYOU (trastuzumab injection), the first domestic monoclonal antibody biosimilar approved in both China and the European Union (EU), has been accepted by the U.S. Food and Drug Administration (FDA), which is expected to become the first domestic monoclonal antibody biosimilar approved in China, the EU and the U.S., further covering the mainstream biopharmaceutical markets in Europe and the U.S.
The development of new and sub-new products has also promoted the steady growth of Fosun Pharma's revenue and profit. In the first quarter of this year, Fosun Pharma achieved an operating revenue of RMB10.871 billion, representing a year-on-year increase of 4.68%; net profit attributable to shareholders of the listed company after deducting extraordinary gain and loss was RMB919 million, representing a year-on-year increase of 14.78%.
The general upward trend leads to a strong recovery in the household consumption businesses
The recovery of domestic consumption and the relaxation of travel restrictions worldwide have led to a strong recovery in Fosun's businesses in the consumer and tourism sectors. At the open day event, investors took a tour of the Grand Yuyuan from Yuyuan Tourist Mart to the BFC and visited Fosun's time-honored brands such as Tong Han Chun Tang, Laomiao, and Songhelou, international brands such as Lanvin, and Sergio Rossi, and learnt more about Sisram Med's medical aesthetics and personal care products in Joyful Way, truly experiencing market vitality boosted by consumption recovery.
The performance of the listed companies in Fosun's Happiness segment also exemplifies investors' research sentiment. In the first quarter of this year, Yuyuan achieved an operating revenue of RMB15.244 billion, representing a year-on-year increase of 22.61%; among them, the revenue of Yuyuan Jewelry and Fashion reached RMB11.494 billion, representing a year-on-year increase of 28.55%; both the customer traffic and business volume of Yuyuan Tourist Mart have achieved good results, with customer traffic rising 87% compared with the same period in 2022; the revenue and net profit of Shede Spirits have both increased, and the proportion of mid-to-high-end spirits sales has continued to rise.
Fosun's tourism business saw even stronger business rebound. In the first quarter of this year, FTG's net profit attributable to the parent doubled compared with the same period in 2022, of which, Club Med's business volume reached RMB5.004 billion, an increase of about 44.2% compared with the same period in 2022. During the May Day holiday this year, the total business volume of Atlantis Sanya exceeded five times that of the same period in 2022, and the total number of visitors reached 115,000.
As the first U.S.-listed company under Fosun, Lanvin Group recently released its first annual report since its listing at the end of 2022. According to the data, five major brands of Lanvin Group, including Lanvin and Sergio Rossi, all achieved year-on-year growth, with annual revenue rising 37% year-on-year to EUR422 million, maintaining industry-leading growth in the global luxury goods industry.
Alex Gong, Executive Director, Executive President, and Chief Financial Officer of Fosun International, said, "Looking ahead, Fosun will maintain its business streamlining and resilience building strategy, continue to focus on the development of its core businesses, enhance its industry operations capability and global competitiveness, and achieve high-value growth in return for investors' trust."
Fosun was founded in 1992. After more than 30 years of development, Fosun has become a global innovation-driven consumer group. Adhering to the mission of creating happier lives for families worldwide, Fosun is committed to creating a global happiness ecosystem fulfilling the needs of one billion families in health, happiness and wealth. In 2007, Fosun International Limited was listed on the main board of the Hong Kong Stock Exchange (stock code: 00656.HK). As of 31 December 2022, Fosun International's total assets amounted to RMB823.1 billion. Fosun International ranks No.589 on the 2022 Forbes Global 2000 List, with a MSCI ESG rating of AA.
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