Securities Firms Maintain "Buy" Rating on Fosun International, Highlighting Significant Success in Business Streamlining Strategy and "Strategic Advancements and Exits"
HONG KONG, April 8, 2025 /PRNewswire/ -- Industrial Securities and Kaiyuan Securities recently published research reports highlighting Fosun International (00656.HK)'s accelerated exit from non-core assets and continued focus on core businesses. The reports stated that Fosun has increased its proportion of overseas revenue while maintaining overall stable revenue. Additionally, Fosun has continued to optimize its debt structure, with interest-bearing liabilities showing a downward trend. Both firms reaffirmed their respective "overweight" and "buy" ratings on Fosun International.
According to Fosun International's 2024 annual results, the company has reported a total revenue of RMB192.14 billion. Its four core subsidiaries – Yuyuan, Fosun Pharma, Fosun Insurance Portugal, and Fosun Tourism Group – generated a total revenue of RMB134.65 billion, accounting for 70.1% of the Group's total revenue. Its industrial operation profit reached RMB4.9 billion. Excluding the significant one-off effect, the profit attributable to owners of the parent amounted to RMB750 million. Meanwhile, Fosun's operating cash flow remained healthy and stable. The signed asset divestment amounted to approximately RMB17.5 billion equivalent at the group level, and approximately RMB30.0 billion equivalent at the consolidated level. As at the end of the Reporting Period, the Group's total debt to total capital ratio was 52.0%, cash and bank balance and term deposits amounted to RMB106.34 billion.
Industrial Securities believes that by deeply cultivating the four major business segments of Health, Happiness, Wealth, and Intelligent Manufacturing, Fosun has accelerated its exit from non-core assets in recent years and optimized its capital structure to better focus on its core businesses. In 2024, it achieved orderly advancements and exits to enhance its asset portfolio, while continuously optimizing its debt structure, resulting in a downward trend in interest-bearing liabilities. At the same time, Fosun's globalization capabilities were strengthened, and the development of overseas business became a highlight. In 2024, Fosun's overseas revenue accounted for 49.3% of total revenue, with the overseas operations of core subsidiaries showing even stronger growth. For example, in 2024, Fosun Pharma's revenue from regions and countries outside of the Chinese mainland reached RMB11.3 billion, representing a year-on-year increase of 8.9%; Fosun Insurance Portugal's total gross written premiums from markets outside Portugal reached EUR1.84 billion, representing a year-on-year increase of 7.8%. As a result, Industrial Securities maintained an "overweight" rating on Fosun International.
Kaiyuan Securities also believes that Fosun's overall revenue remains stable while the company continues to steadily exit non-core assets. At the same time, Fosun has placed a strong emphasis on ecosystem synergy to amplify the flywheel effect. It successfully implemented the "health care + insurance" ecosystem policy model, and Fosun Care achieved profitability for the first time. It also made significant progress in asset-light operations. For example, in 2024, Fosun Pharma together with the Shenzhen Guidance Fund and other investors established a RMB5.0 billion biopharmaceutical industry fund to jointly promote the high-quality development of the pharmaceutical and healthcare industry in the Greater Bay Area. Kaiyuan Securities is optimistic about Fosun's focus on resource allocation in high-potential segments and its ongoing efforts to deepen global operations, thus maintaining a "buy" rating.
Fosun's management stated at the results presentation that in the next few years, the Group aims to gradually increase the proportion of overseas revenue in its global operations; continue to divest from some asset-heavy projects to reduce financial leverage and maintain "strategic advancements and exits, and balanced investment and divestment"; progressively reduce the Group's interest-bearing debts from the current level of more than RMB80 billion to RMB60 billion; strive to achieve RMB10 billion in industrial operation profit as well as in profit attributable to owners of the parent; and consistently enhance its operational capabilities, endeavoring to attain "investment grade" ratings.
Securities firms pointed out that Fosun's success in its business streamlining strategy and "strategic advancements and exits" have been clearly reflected in its financial results. Moving forward, as the potential for growth in its core businesses is further unlocked and operational capabilities continue to improve, Fosun's valuation and performance in the secondary market are expected to gradually return to a reasonable level. Data shows that as of 31 December 2024, Fosun International's adjusted NAV was HK$17.6 per share, indicating a significant undervaluation compared to its current share price.
SOURCE Fosun
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