Fosun International announces 2018 Interim Results: Steady growth, continuously deepening its global operations

Published : Wednesday, August 29, 2018, 9:35 am
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HONG KONG, Aug. 29, 2018 /PRNewswire/ -- Fosun International Limited (stock code: 00656.HK) announced its 2018 interim results in Hong Kong. During the reporting period, the Company delivered steady growth, with revenue increased 20% year-on-year to RMB 43.51 billion; the profitability of the Company has continuously improved. Profit attributable to owners of the parent increased by 17% year-on-year to RMB 6.86 billion, reporting rapid growth for the sixth consecutive year; Earnings per share repeatedly hit record high and increased 18% year-on-year to HKD 0.98 (RMB 0.80).

Fosun International's balance sheet remained solid and healthy while its business grew sustainably. As of 30 June 2018, the net gearing ratio stood at 53.6%, overall financing cost was controlled at 5.18%. In January 2018, Moody's acknowledged Fosun's improvements by raising its credit rating to Ba2 Stable from Ba3 Positive.

It's noteworthy that the global market was volatile in the first half of the year, Fosun still managed to sustain growth and maintain a healthy balance sheet under such complicated economic landscape, thanks to its scientific and stringent decision-making mechanism, and constantly optimized globalized asset allocation.

Fosun International has built a bottom-up internal decision making mechanism, which includes the stages of project screening, project initiation, due diligence and decision making and post-investment management. Early-stage project screening is led by over 40 investment teams and 600 industry and investment professionals of the company. Due diligence and decision making are conducted by more than 30 global partners and the corresponding industry committees, whereas post-investment management after the completion of project adopts risk alert system and 100-day plan that focuses on industrial operations, with a view of ensuring the value realization of the final project. Under this bottom-up decision-making mechanism that emphasizes on discipline and constructive competition, only 1% of the projects could successfully pass the test.

With this mature decision-making mechanism, the Company constantly optimizes asset allocation, which formed by a three-layer pyramid composed of fundamental assets at the base, C2M core assets in the middle layer, and unicorn assets at the top layer, contributing to the great resilience shown by Fosun in different business cycles. The Company, apart from achieving growth in profit attributable to owners of the parent for sixth consecutive years, in view of its performance over the past 10 years, its book value per share has increased from HKD 3.60 to HKD 13.79, with an annual CAGR of 14.4%, while its stock prices also delivered a 10-year CAGR of 10%. These two data have both significantly surpassed the performance of Hang Seng Index in the corresponding period.

In terms of globalization, the Company continued with its global investment strategy in the first half of 2018, capitalized on the global growth momentum and strengthened its industrial capability. In the first half of 2018, the Company has announced or completed projects including the French renowned leading healthy food company St Hubert, French luxury couture house Lanvin, well-known Austrian textiles manufacturer focusing on high-end stocking, lingerie and pyjama Wolford, Brazilian brokerage and wealth management company Guide Investimentos and China's leading beer company Tsingtao Brewery, China's leading matchmaking-to-wedding industry chain leader and domestic new energy power battery company Jiewei Power etc.

In addition to continuously making investment worldwide, Fosun's globalized industry operations continued to achieve solid results during the period. In the first half of the year, Wolverhampton Wanderers F.C. returned to Premier League in two seasons, and collaborated with Tsingtao Brewery, Club Med, Thomas Cook on global promotion. Hollywood production house Studio 8 has made a global release for "Alpha", a blockbuster movie directed by Albert Hughes on 17 August, and the movie will be officially released in China on 7 September; at the same time, Studio 8 sets the release date of "White Boy Rick", starring Oscar winner Matthew McConaughey, in September. In March 2018, Fosun and HSBC signed a global strategic collaboration agreement. According to the agreement, HSBC will provide strong support to Fosun for its global growth strategy, including corporate financing services, cash management and settlement services, global capital market operations, and various market risk hedging services.

Guo Guangchang, Chairman of Fosun International said, "In the first half of 2018, despite the market volatility, Fosun's business model that with its deep roots in China and focuses on health, happiness and wealth ecosystems for global families, remained resilient. In the future, I am confident that Fosun will continue to generate rapid and sustainable growth in our recurring operating profit and cash flow."

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