Making a major stride towards becoming a world-class investment group underpinned by the twin drivers of "insurance-oriented comprehensive financial capability" and "profound industrial foothold based investment capability"
HONG KONG, March 26, 2014 /PRNewswire/ -- Fosun International Limited (together with its subsidiaries, "Fosun" or the "Group", HKExstock code: 00656) announces today its annual results for the year ended 31 December 2013. During 2013, Fosun grasped value investing opportunities and achieved encouraging returns with substantial growth in results. Profit attributable to owners of the parent of the Group surges 49% year-on-year to RMB5.52 billion.
During 2013, Fosun took a solid stride towards implementing the Warren Buffett model of development. Following the tender win for the acquisition of the three insurance companies namely Fidelidade, Multicare and Caresunder Caixa Seguros e Saude ("CSS") of Portugal (abbreviated as "Fosun Insurance Portugal") with a formal agreement signed in February this year, Fosun will have its insurance assets significantly enhanced on completion of the project, and its positioning as "an insurance-oriented investment group" will take on a good shape. The investment model of "Combining China's Growth Momentum with Global Resources" that Fosun has been implementing achieved respectable results as well. Facing the comprehensive reform brought about by the Internet, Fosun proactively implemented its "Embracing the Mobile Internet Strategy" and achieved many good investments directly in Internet enterprises, high growth industries ancillary to the Internet, O2O and the Internet finance industry. Fosun has been taking roots in China and focusing on China's growth momentum, precisely grasping investment opportunities brought about by the changing lifestyles of the middle class in China and achieved excellent results.
"An Insurance-Oriented Investment Group" taking shape
Fosun has been endeavoring determined efforts in establishing insurance as its core business. The Group has always been seeing insurance as a premium path connecting its investment capability and long term high quality capital. Excluding investment in Fosun Insurance Portugal, Fosun's insurance segment comprises three companies, namely Yong'an P&C Insurance, Pramerica Fosun Life Insurance and Peak Reinsurance, constituting a triple-driver insurance platform underpinned by property and casualty, life, and re-insurance. Leveraging its successful connection to Fosun's investment capability, the insurance segment as a whole achieved a profit one year immediately after its establishment, beating forecasts significantly. The insurance segment achieved a profit aggregated RMB523.6 million with funds available for investments aggregated RMB13.37 billion. Peak Reinsurance accomplished excellent investment returns since its establishment in late 2012. Yong'an P&C Insurance ranked 11 among China's P&C companies in terms of original premium income. Pramerica Fosun Life Insurance had been intensifying its product innovation efforts and secured eligibilities for discretionary investments in financial products and bonds, equity securities, and approval for the US-dollar denominated offshore investments from China Securities Regulatory Commission within a year after its establishment.
In January 2014, Fosun won the tender for an 80% interest in Fosun Insurance Portugal for a total consideration of EUR1 billion and a formal agreement was signed in February this year. Fosun Insurance Portugal has funds available for investments aggregated approximately EUR12 billion. Fosun Insurance Portugal constitutes the largest insurance group in Portugal. Fosun Insurance Portugal's unaudited insurance assets reached EUR12.8 billion by end-2013, which compared with Fosun's total assets of RMB183.1 billion by end-2013. Upon completion of the closing of the acquisition, the proportion of Fosun's insurance assets to the Group's total assets will increase significantly. This acquisition represents a solid stride towards implementing the WarrenBuffett model of development. Pursuant to the completion of the Fosun Insurance Portugal project, Fosun's "twin-driver" development model will become more distinctively defined. On one hand, Fosun will leverage its "insurance-oriented comprehensive financial capability" driver as a major financing tool to connect the Group to long term high quality capital. On the other hand, Fosun will continue to pursue and implement its "profound industrial foothold based global investment capability" driver, adhering to the Fosun value investing principle, seeking to deliver more successful investment cases of "Combining China's Growth Momentum with Global Resources". This "twin-driver" development strategy will represent a major stride for Fosun to progress forward, taking Fosun to the next level.
The investment model of "Combining China's Growth Momentum with Global Resources" achieved respectable results
In recent years, Fosun has established a private equity fund with Prudential Financial, Inc.On the top of its successful investments in the French premium leisure resort hotel chain Club Med and the Greek renowned fashion retail group Folli Follie, Fosun has been taking its implementation of the "Combining China's Growth Momentum with Global Resources" investment model further. In 2013, Fosun, together with investment funds under its management, completed a number of investments in international outstanding enterprises, which included: the US high-end female apparel brand St. John, the world's leading medical and cosmetic energy-based device manufacturer Alma Lasers originated in Israel, the US-based developer of personalized and novel diagnostic tests Saladax, the premium Italian menswear manufacturer Caruso, One Chase Manhattan Plaza in the US and Lloyd's Chambers in the UK.The new international investment projects just added in 2014 included Fosun Insurance Portugal, the largest Insurer in Portugal, as well as Secret Recipe, the leading leisure upscale F & B chain store group in Southeast Asia. Fosun is of the view to jointly co-operate with its investees and partners to discover and share investment opportunities brought about by China's sustaining economic growth.
The "Embracing the Mobile Internet Strategy" yielded significant results
Facing the comprehensive reform brought about by the Internet, Fosun proactively implement its "Embracing the Mobile Internet Strategy", including investments in high-growth Internet companies, including mobile Internet, those involving big data, etc., and in high-growth industries ancillary to the Internet, including distribution warehousing, freight express, smart logistics systems, etc., and invested in O2O and the Internet finance industry.
In 2013, Fosun's "Embracing the Mobile Internet Strategy" yielded significant results, including investments in Perfect World for the Internet area, and completed the privatization of Focus Media. For the high-growth industries ancillary to the Internet, Fosun successfully invested a stake in the China Smart Logistics Network (CSN) -- "Cainiao". In O2O and the Internet finance industry, Fosun successfully invested in Ali Small-Loan and participated in its rapid growth.
The Group will continue to stay vigilant of the many investment opportunities emerging from application of the mobile Internet, including internet finance, big data, healthcare and education, etc., and investment opportunities in reverse O2O, i.e., mobile Internet enterprises seeking to land a foothold.
Precisely grasping investment opportunities brought about by the changing lifestyles of the middle class in China
China's rapidly growing middle class population is set to become the world's largest middle class community. The middle class lifestyles will soon evolve to be the major driver of consumption in China. Fosun is eyeing on investment opportunities brought about by the changing lifestyles of the middle class in China, focusing on investments in consumption upgrades, experience-driven consumption and personal finance areas, etc.
In 2013, Fosun's consumption upgrade investments included the US high-end female apparel brand St. John and the premium Italian menswear manufacturer Caruso. Its experience-driven consumption investments included the world's third ultimate high-end seven-star hotel and ocean theme park Atlantis Resort along the Haitang Bay National Coast in Sanya, Hainan, with Kerzner Group. It also continued to facilitate Club Med's expansion in China and on the heels of Yabuli and Guilin resorts, Club Med's third resort in China is expected to be launched in 2014. In addition, Fosun launched a privatization offer for Club Med, invested in the world's leading medical and cosmetic energy-based device manufacturer Alma Lasers originated in Israel, and China International Travel Service Corporation Limited. In February this year, Fosun, through an investment fund under its management, acquired an interest in Secret Recipe, the leading leisure upscale F & B chain store group in Southeast Asia, and became the second largest shareholder. Fosun will help Secret Recipe secure its position in the China market. In the area of personal finance, Fosun successfully won the tender for an 80% interest in Fosun Insurance Portugal, the largest insurer in Portugal, this year.
Serving the new model of urbanization, Fosun's pioneered "Hive Cities (Communities)" secured a foothold
Implementing the new model of urbanization is a major highlight of the Central Government, and a major driver of the sustaining economic development in China. Hive Cities (Communities) are a product under the new model of urbanization pioneered by Fosun, integrating its global resources to participate in construction of core urban functions through a public-private partnership ("PPP") model. The Hive Cities (Communities) products developed by Fosun tap Fosun's existing resources in its industrial investments, combining with national and global resources to construct core functions urgently needed by urban upgrading and industrial upgrading, including the direct financing function, the healthcare& medical function, the culture &experience &travel function, and the trade &logistics function, etc., seeking to pioneer an innovative planning concepts that establish a 3-in-1 communities for work, living and consumption, vibrant communities with 24-hour active passenger traffic. Through industries providing core functions, ancillary services and supporting living and consumption service industries, these communities seek to provide adequate and diverse job opportunities. These Hive Cities (Communities) will also lower the barriers of entry to provide room for innovative entrepreneurial start-ups, seeking to constitute functional communities that are self-sufficient, environmental friendly with active dispersal of peripheral services. While serving the cities, these functions will gradually form community-style cities through seamless homogeneous connections of Hive Cities (Communities) of different functions. Currently, Fosun has been exploring actively in this area with several completed case studies: Financial Hive -- BFC on the Bund in Shanghai; Healthcare Hive -- Shanghai Starcastle Senior Living community; Culture & Entertainment Hive -- Yuyuan Tourist Mart; Travel & Leisure Hive -- Atlantis Resort in Hainan; and Logistics & Wholesale Hive -- Tian Mao Plaza in Hubei and Sichuan, etc.
Outlook
Led by a spiritual courage of "Reinitiating two decades of entrepreneurship", Fosun will continue to take its roots in China, persistent in actively implementing the investment model of "Combining China's Growth Momentum with Global Resources", focusing on large-scale projects, embracing the mobile Internet, actively facilitating the launch of more Hive Cities (Communities) products under the new model of urbanization. It will systematically mitigate investment risk by constructing an open platform to enhance team productivity, thereby enabling Fosun to better and timely grasp the value investing opportunities. These will help Fosun make a major stride towards becoming a world-class investment group underpinned by the twin drivers of "insurance-oriented comprehensive financial capability" and "profound industrial foothold based investment capability".
