On March 27, 2024, Fosun International announced its 2023 annual results. During the Reporting Period, Fosun's total revenue was RMB198.2 billion, up 8.6% year-on-year, and its net profit attributable to its parent company was RMB1.38 billion, up significantly year-on-year.
Regarding this figure, Guo Guangchang, chairman of Fosun International, said at the results conference on the morning of the 28th, "In the past year, in the face of fluctuations in the external economic environment, Fosun's achievements have not come easily. Fosun's industrial operation capabilities have withstood the test, made a qualitative leap, and achieved gratifying results by focusing on its main business. "Over the past three years, the pandemic, slow economic recovery and geopolitical headwinds have put pressure on Chinese companies, including Fosun. Fosun has resolutely "slimmed down and fit", focused on its main business, and successively exited a number of non-core assets, focusing on the main track of the household consumption industry, in order to achieve high-quality growth. After the contraction of the front, some non-core industries that had brought stable cash flow to Fosun were divested, and after the cash flow improved, the market also paid attention to how Fosun could maintain stable earnings growth as in the past. Fosun used to be 'prospecting and mining' in the world, looking for suitable projects around the world, and now there are enough 'good mines', Fosun will gradually transform into 'deep mining' and 'good mining', focus on building a potentially sustainable, predictable and stable profit enterprise, continue to deepen its cultivation in the core industries that have formed advantages, enhance certainty, take stable profit growth as the core goal of Fosun's future operations, and gradually increase dividends. ”
According to the performance announcement of "deep mining" and deep cultivation of advantageous industries, Fosun's continuous focus on the main business of household consumption has gradually shown results. In 2023, Fosun's four core subsidiaries, Yuyuan Co., Ltd., Fosun Pharma, Fosun Tourism and Fosun Portugal Insurance, achieved stable revenues, accounting for 72% of Fosun's revenue. Specifically, the revenue of Yuyuan's jewelry and fashion segment was 36.727 billion yuan, a year-on-year increase of 11.05%. Henlius, a subsidiary of Fosun Pharma, achieved its first full-year profit, with operating income of RMB5,394.9 million, representing a year-on-year increase of 67.8%. Club Med, a subsidiary of Fosun Tourism, achieved a record high in 2023, with a turnover of RMB15.12 billion, up 19% year-on-year, while Atlantis Sanya achieved a significant increase of 91% year-on-year with a turnover of RMB1.68 billion. Portugal Insurance maintains a 30% share of the overall Portuguese market through high-quality services, and is firmly in the leading position. For Fosun, this is the result of continuous strategic evolution. Over the past decade, Fosun has continued to make in-depth industrial layouts around the world, "prospecting" and "prospecting" in various industries, and has rapidly grown into a global enterprise with total assets of over RMB 800 billion.
In recent years, in the face of the complex and volatile economic situation of the epidemic, Fosun has decisively anchored its household consumption customers, promoted the industry-focused strategy in the three major business segments of health, happiness and wealth, "deep mining", deeply cultivated advantageous industries, and obtained more stable cash flow and profit growth. Today's Fosun is more focused, and its business structure is simpler and healthier. From the perspective of financial indicators, Fosun achieved "double growth" in revenue and profit in 2023, further optimized its capital and asset structure, and maintained good liquidity resilience. The Group's consolidated interest-bearing debt decreased by RMB15.0 billion year-on-year, Group-level interest-bearing liabilities decreased by RMB9.2 billion from the end of 2022, and the ratio of total debt to total capital decreased to 50.4%, a decrease of 2.9 percentage points from the end of 2022. Cash, bank balances and time deposits amounted to RMB92.46 billion. While becoming "thin", Fosun has also become "lighter". More flexible and efficient asset-light operation capabilities have become one of the directions of Fosun's strategic adjustment. In March this year, Fosun Pharma, together with Shenzhen Guidance Fund and other seven-party investors, planned to jointly invest in the establishment of a 5 billion biomedical industry fund, and all the raised funds will be invested in the fields of biomedicine, cells and genes. Rehabilitation Capital, a subsidiary of Fosun Pharma, won the bid through the public selection of Shenzhen and exclusively managed the fund.
Since the second half of last year, Guo Guangchang has publicly stated on many occasions that Fosun will continue to reduce debt, maintain asset-light operation, focus funds on R&D and innovation, and invest superior resources in its advantageous industries to achieve high-quality growth. At the results meeting, he also said that Fosun's asset-heavy ratio will continue to decrease in the future, and it will continue to build asset-light capabilities, which is Fosun's unswerving strategy. With its profound innovation and industrial operation capabilities and cooperation with local governments, Fosun has jointly promoted scientific and technological innovation and the transformation of achievements, which has become a new way for Fosun's asset-light operation. With the establishment of the RMB5 billion target fund, Fosun is expected to rely on Shenzhen, look at China and the world, and strengthen the R&D and layout of innovative products and technologies in the field of biomedicine and health industry. In 2023, 93% of Fosun Tourism's revenue comes from tourism operations, and its asset-light operation capabilities have also been further improved, for example, ClubMed's resorts with a leasing and management model account for 85% and self-owned resorts will be reduced to 15%. In October of that year, Club Med launched the world's first urban resort, Mediterranean Ark Nanjing Xianlin Resort, opening a new model of urban vacation, and in November, Taicang Alpine International Resort, featuring ice and snow vacations, also opened to create a pure Alpine ice and snow resort experience. Strengthening the advantages of innovation and globalizationFosun continues to deepen its efforts in advantageous industries and reap more stable profits, relying on two core focuses: innovation and globalization. Starting from the beginning of the business with hepatitis B PCR reagents, innovation has been integrated into Fosun's corporate DNA, and over the years, Fosun has continued to invest in innovation and increased year by year. In 2023, Fosun's annual investment in science and technology innovation reached RMB7.4 billion, a year-on-year increase of 14%.
In recent years, Fosun's innovation strategy has continued to enter the harvest period, with a number of new products and new indications approved for marketing. The world's first anti-PD-1 monoclonal antibody independently developed by Henlius for the first-line treatment of small cell lung cancer (SCC) has been approved for four indications, benefiting more patients and becoming a "star product" of biomedicine in China. The self-developed Han Qu You, which is used for the treatment of breast cancer, is expected to become the first domestic biosimilar approved for marketing in China, the European Union and the United States. Since its establishment in 2010, Henlius has adhered to the path of independent research and development. After 13 years of unremitting investment in capital, talent and technology research and development, as of the end of 2023, Henlius has launched 5 products in China and 2 products globally, driving a historic turning point in its operating performance - becoming the first Hong Kong-listed "18A" biopharmaceutical company to achieve profitability. In addition, Fosun Pharma's Guilin Pharma's second-generation artesunate for injection has become the first one-step artesunate injection prequalified by the World Health Organization, Fosun Kite's first CAR-T cell therapy product in China, Yikaida, has treated hundreds of patients with relapsed and refractory large B-cell lymphoma since its launch more than two years ago, and the new second-line indication has been conditionally approved by the National Medical Products Administration. The da Vinci surgical robot, an Internet celebrity product of previous CIIEs, has also been successfully localized. Intuitive Fosun's domestically produced da Vinci Xi surgical system was successfully approved by the State Food and Drug Administration and officially rolled off the production line, truly realizing "Made in China, Joint R&D, and Global Sales". At present, the total number of da Vinci surgical robots installed in China has exceeded 360, benefiting more than 420,000 patients. "Globalization" is another core competitiveness of Fosun, and it is also an important label for the outside world to recognize Fosun. Starting from Fosun's international listing in 2007, Fosun's globalization has gone through nearly 17 years, and today it has an in-depth industrial layout in more than 35 countries and regions, and the "global organization + local operation" model is becoming increasingly mature. In 2023, Fosun International's overseas revenue reached RMB89.2 billion, up 6% year-on-year, accounting for 45% of total revenue. A number of Fosun's products have entered overseas markets, such as Hanqu You, which has been approved for marketing in more than 40 countries and regions, becoming the most domestic biosimilar in more than 40 countries and regions, and Hansizhuang, the first innovative H drug, was approved for marketing in Indonesia, becoming the first domestic anti-PD-1 monoclonal antibody successfully approved for marketing in Southeast Asian countries. In the field of cultural tourism, which naturally has "global genes", Club Med, a subsidiary of Fosun Tourism, will see growth in its global business in 2023. Club Med's revenue in the Americas increased by 24% compared to the same period in 2022, Brazil became the world's second largest sales market by turnover, driven by the recovery of the Brazilian tourism market, and in EMEA and Europe, Africa and the Middle East, revenue increased by 7% and 11% in 2023 compared to 2022 and 2019, respectively. In 2023, Fosun's overseas revenue increased by 86.94% year-on-year, with breakthroughs in both overseas outlets and duty-free channels, entering 31 countries and regions and completing the layout of 45 duty-free shops. Fosun's globalization is not only a "two-way journey" between the world and China, but also actively promotes the expansion of Fosun's overseas enterprises locally and overseas. For example, Portuguese insurance continued to expand into foreign markets such as South America and Africa, with a total premium of 1.70 billion euros in international business in 2023, a year-on-year increase of 10.6%. Hainan Mining completed the delivery of investment projects with KOD and KMUK, and obtained a controlling stake in Bougouni Lithium Mine in Mali, taking a key step in the layout of the new energy industry and its internationalization strategy. In addition to the "hard power" in the industry, the "soft power" accumulated by Fosun in the process of globalization is also precious. From the end of 2023 to the beginning of 2024, the National Intangible Cultural Heritage Yu Garden Lantern Festival will be held in Paris, France for the first time, becoming the opening event to celebrate the 60th anniversary of the establishment of diplomatic relations between China and France and the Sino-French Year of Culture and Tourism, lasting for 72 days and attracting nearly 200,000 local tourists.
By continuing to promote its innovation and globalization strategy, Fosun is building a moat of competitiveness in a number of advantageous industries such as healthcare, tourism and culture, and ensuring stable profit growth in the future.
In the letter to shareholders, Guo Guangchang said: "In the future, Fosun will continue to focus on core industries, strengthen capacity building, improve internal skills, actively invest and expand in advantageous industries, make forward-looking layouts, and deeply explore the capabilities and values of Fosun's ecosystem." We hope that through our efforts, we will create more good products and services for one billion family customers around the world. ”