Fosun International 2024 Annual Results Presentation: Aiming for RMB10 Billion in Future Industrial Operation Profit

Rhea-AI Summary

Fosun International (FOSUY) reported its 2024 annual results with total revenue of RMB192.14 billion and industrial operation profit of RMB4.9 billion. The company recorded a loss of RMB4.35 billion attributable to owners, primarily due to a non-cash impairment loss from Cainiao investment. Excluding this adjustment, profit was RMB750 million.

Key highlights include:

• Overseas revenue increased from 45% to 49.3%
• Technology innovation investment reached RMB6.9 billion
• Interest-bearing debt stands at over RMB80 billion

The company aims to:

• Double industrial operation profit to RMB10 billion
• Reduce debt to RMB60 billion
• Increase dividend payout ratio
• Achieve investment grade credit ratings

Positive

• Industrial operation profit reached RMB4.9 billion
• Overseas revenue proportion increased to 49.3%
• Strong return on Cainiao investment with 34% IRR
• Significant investment in technology innovation (RMB6.9 billion)
• Global expansion success with Fosun Insurance Portugal generating 29.8% income from outside Portugal

Negative

• Net loss of RMB4.35 billion due to Cainiao impairment
• High debt levels exceeding RMB80 billion
• Need for continued asset divestment to reduce leverage

HONG KONG and SHANGHAI, April 2, 2025 /PRNewswire/ -- On 1 April 2025, Fosun International Limited (HKEX stock code: 00656, "Fosun International"), together with its subsidiaries ("Fosun" or the "Group") held its 2024 annual results presentation in Shanghai. The results presentation was attended by Guo Guangchang, Chairman of Fosun International, Wang Qunbin, Co-Chairman of Fosun International, Chen Qiyu and Xu Xiaoliang, Co-CEOs of Fosun International, Gong Ping, CFO of Fosun International, and a number of institutional investors and analysts.

In 2024, Fosun International achieved total revenue of RMB192.14 billion, with industrial operation profit, a key indicator for corporate operational performance, reaching RMB4.9 billion; overseas revenue proportion increased from 45% to 49.3%. During the reporting period, loss attributable to owners of the parent amounted to approximately RMB4.35 billion, mainly due to a non-cash impairment loss related to the Cainiao investment. Fosun's investment in Cainiao was approximately RMB1.5 billion and the proceeds from divestments reached approximately RMB4.4 billion, yielding an internal rate of return of approximately 34%. Excluding the effect of the carrying value adjustment, the profit attributable to owners of the parent in 2024 amounted to RMB750 million.

Addressing investors' concerns about profitability, Guo Guangchang, Chairman of Fosun International, responded at the results presentation that the financial adjustment in 2024 is not due to Fosun's poor operations or decline in market competitiveness, but rather a one-off carrying value adjustment. Nonetheless, Fosun's operations remain stable and its core businesses are under healthy development, and Fosun's industrial operation profit and operating cash flows stay healthy and stable. Management must remain committed and work diligently to maintain the Company's steady development in the future.

In 2024, Fosun had been advancing the business streamlining strategy and pursuing "strategic advancements and exits, and balanced investment and divestment". Wang Qunbin, Co-Chairman of Fosun International, stated, in 2024, Fosun divested from some asset-heavy projects and non-core operations, and leveraged industries where it holds competitive advantages, such as biopharmaceuticals, and tourism and culture. Fosun steadily intensified efforts in implementing the asset-light strategy and collaborating with key partners. This includes the establishment of a biopharmaceutical industry fund in Shenzhen, the Taicang Alps Resort Phase II project, Fosun Tourism Group's launch of Club Med in Jinsha Bay in Shenzhen, the ULTRAMED Hainan project in Sanya, further enhancing Fosun's asset-light operational capabilities to unlock greater project value.

Regarding Fosun's innovation strategy, Chen Qiyu, Co-CEO of Fosun International, stated that Fosun has consistently increased its investment in innovation for more than 30 years since its establishment, with investment in technology innovation reaching approximately RMB6.9 billion in 2024. Fosun places significant emphasis on multi-dimensional innovation across various fields, including the development of blockbuster products, product iteration, and customer service. For example, in the consumer business, Fosun has deeply integrated new products with new scenarios through technology innovation; in the insurance business, it has actively promoted the application of technologies such as big data and AI. Biopharmaceuticals are among the most valuable fields for the application of AI technology, where AI has become a key focus in drug R&D, clinical applications, medical imaging and other more. Fosun Pharma has been dedicated to AI-based drug R&D for three years and has achieved notable results, with AI-designed drugs now entering the clinical trial stage. In addition, Fosun Pharma is developing the PharmAID decision intelligence platform, which aims to optimize the innovative R&D process, improve R&D efficiency, and support a more scientific decision-making system.

Henlius is the core company for Fosun's innovative drug R&D. Guo Guangchang said, "Henlius is one of Fosun's most promising companies with the greatest potential, and we are optimistic about its potential to achieve product sales of USD10 billion in the future. It represents the future 'Mount Everest' of Fosun, symbolizing its most strategic advantages, and we will provide full support for its development. Fosun has always placed a strong emphasis on innovation, as well as on companies and products with significant growth potential. In our approach to 'strategic advancements and exits', we aim to divest from asset-heavy projects and non-core operations, while pursuing advancements in innovative industries that offer immense potential and vast opportunities."

Globalization is a core strategy of Fosun. Guo Guangchang noted that geopolitics affects all companies, and there is no escaping it. The key lies in how a company responds. The best approach is to develop globalization capabilities. For more than ten years, Fosun has consistently focused on building globalization capabilities, and today Fosun is increasingly reaping the rewards. On the one hand, Fosun's globalization strategy promotes Chinese companies and advantageous industries to go global. On the other hand, it helps Fosun's overseas companies expand globally. For example, Fosun Insurance Portugal currently has 29.8% of its income from markets outside Portugal, with international business profits contributing over 50%.

Xu Xiaoliang, Co-CEO of Fosun International, stated that since 2008, Fosun has established a business presence in 35 countries and regions around the world. Today, it has evolved from building a global presence to deepening its global operations. With the global presence established, operations have become the core focus for Fosun, and it aims to build global operational capabilities. First, it aims to strengthen its capabilities for global resource integration. For example, Fosun Pharma has been closely collaborating with some of the world's leading institutions in R&D, while integrating the production supply chains from countries and regions such as India and Africa. In 2024, Fosun Pharma's overseas revenue reached RMB11.3 billion, accounting for 27% of its total revenue, positioning it among the leaders in global integration capabilities within Chinese pharmaceutical companies. Second, it aims to enhance its capabilities for global expansion and presence. For example, Fosun Insurance Portugal has been expanding its business overseas and has achieved rapid growth in Portuguese-speaking countries such as Bolivia, Peru, and Angola and Mozambique in Africa. Third, it aims to strengthen its capabilities for localization integration. For example, Club Med under Fosun Tourism Group, has innovated products such as Urban Oasis and Joyview in China, focusing on urban vacations and ice and snow vacations, thereby effectively combining and integrating the global model into the Chinese local market.

In discussing Fosun's future goals, Guo Guangchang said that Fosun will continue to divest from some asset-heavy projects to reduce financial leverage and maintain "strategic advancements and exits, and balanced investment and divestment", while deepening its industry operations. In 2024, Fosun's industrial operation profit amounted to approximately RMB4.9 billion, and the Company aims to double it to reach RMB10 billion in the future. Achieving this goal will require sustained efforts to drive growth in operating profits, and it is a target that we can strive for and anticipate.

Gong Ping, CFO of Fosun International, stated that Fosun's management is confident in Fosun's net profit for 2025 and is committed to steadily enhancing profitability in the future. In the next few years, the Group aims to gradually increase the proportion of overseas revenue in its global operations; progressively reduce the Group's interest-bearing debts from the current level of more than RMB80 billion to RMB60 billion; and strive to achieve RMB10 billion in industrial operation profit as well as in profit attributable to owners of the parent; work towards gradually increasing the dividend payout ratio, endeavoring to attain "investment grade" credit ratings.

"The process of Fosun's strategic adjustments is not easy. It requires strategic determination and time to do it step by step. Fosun has always persisted in doing the right things, difficult things and things that take time to develop, and we remain dedicated to this commitment," said Guo Guangchang.

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FAQ

What caused Fosun International's (FOSUY) loss in 2024?

The RMB4.35 billion loss was primarily due to a non-cash impairment loss related to the Cainiao investment. Excluding this adjustment, profit was RMB750 million.

What are Fosun International's (FOSUY) key financial targets for the future?

Fosun aims to double industrial operation profit to RMB10 billion, reduce debt from RMB80 billion to RMB60 billion, increase dividend payout ratio, and achieve investment grade credit ratings.

How much did FOSUY invest in technology innovation in 2024?

Fosun invested approximately RMB6.9 billion in technology innovation during 2024.

What percentage of Fosun International's (FOSUY) revenue came from overseas in 2024?

Overseas revenue accounted for 49.3% of total revenue in 2024, up from 45% previously.

What was Fosun International's (FOSUY) total revenue in 2024?

Fosun International achieved total revenue of RMB192.14 billion in 2024.