HONG KONG, Aug. 29, 2012 /PRNewswire-Asia/ -- Fosun International Limited ("Fosun" or the "Company", together with its subsidiaries, the "Group", HKEx stock code: 00656) today announces its interim results for the six months ended 30 June 2012 (the "Reporting Period"). As at 30 June 2012, the Group's revenue amounted to RMB25.73 billion, up 0.63% as compared to the same period last year. Net profit attributable to shareholders amounted to RMB1.55 billion. As at the end of June 2012, the Group's book value reached RMB32.57 billion while net portfolio value amounted to RMB38.15 billion. During this year as of now, the Group successfully helped 5 enterprises to launch their initial public share offerings, boosting the total transaction count since inception to 25.
In the first half of this year, against this unfavourable external macroeconomic backdrop, Fosun continued to proactively meet challenges as well as optimise management and operations. By strengthening its development model with growth engines of "insurance, industrial operations, investments and asset management", Fosun continued to transform itself to an insurance-oriented investment group, with a view to effectively implementing Fosun's investment philosophy of value investment. These efforts have been making steady inroads into establishing Fosun as "a premium investment group with a focus on China's growth momentum".
Growth Engine 1: Insurance Segment Connects to Long-term Quality Capital
Secured high-quality sources of long term and stable capital are imperative for Fosun as an investor focusing on deep-value investing principles. As such, Fosun has been dedicating efforts in expanding its insurance business in recent years. Currently, preparations pursuant to the establishment of Pramerica Fosun Life Insurance Co., Ltd., as a joint venture with Prudential Financial, Inc., are progressing as scheduled. It is pending an examination by China Insurance Regulatory Commission and is expected to commence operation this year. During the Reporting Period, total assets of Yong'an P&C Insurance invested by the Group reached RMB10.1 billion, up 13.3% as compared to end-2011. Its premium income amounted to RMB3.7 billion, up 11.2% from the same period last year. Yong'an P&C Insurance has been adhering to its plan of expanding nationwide with a total of 21 subsidiary units in the country, including a new Shanghai unit which was officially established in July. An agency office that coordinates sales operations all over the country also opened this year. For the past five years, Yong'an P&C Insurance has been growing its total assets and is picking up very healthy growth momentum.
In addition, one of Fosun's major business progresses in the insurance segment this year includes the introduction of Mr. Jiang Ming, the former Founder, Chairman and General Manager of China Continent Property & Casualty Insurance Company Ltd. ("China Continent Insurance"), who is the incoming President of Yong'an P&C Insurance. Mr. Jiang is a true industry professional with over 30 years of industry experience, having served as the General Manager of the Shanghai unit of China Reinsurance prior to joining China Continent Insurance's management board. Fosun is honoured to invite Mr. Jiang to join the Group. It also shows the Group's determination to continuously optimising the operation capabilities in the insurance business segment.
In the future, Fosun will continue to identify opportunities to increase investments in the financial sector, such as insurance and banking. In addition, Fosun will adhere to development trends of the financial services sector in China and actively explore and diversify into other insurance segments, such as reinsurance, in order to establish stable and sustainable accesses to medium and long term high-quality capital.
Growth Engine 2: Industrial Operations Continued to Provide Stable Cash Flow
Currently, the Group's main industrial investments include Fosun Pharma, Forte, NSU and Hainan Mining. The segment has maintained stable growth despite volatilities in the general economy over the years, providing Fosun with a stable source of profit and investment capital on the top of networks of business connections, industrial backings and community relations, etc. The Group's industrial operations portfolio has been performing with profit growing at a CAGR of 27.0% for seven years. Fosun has derived dividend income from this segment aggregated RMB4.48 billion between 2005 and 2011. In the first half of 2012, industrial operations contributed RMB1.43 billion to the Group's profit.
Growth Engine 3: Investment Model Re-examined
During the course of Fosun's development, the Group seized the core growth momentums at different stages of China's economic growth with Fosun's strong investment capabilities. At present, Fosun will continue targeting at sectors that would significantly benefit from China's growth momentum, including sectors such as consumption and consumption upgrade, financial services, resources & energy and manufacturing upgrading. At the same time, Fosun also pushes ahead its globalisation strategy with its unique model of "combining China's growth momentum with global resources". After its successful investment in Club Med, a global leisure and resort chain operator, in 2010, Fosun made another successful investment in Folli Follie, a renowned stylish brand enterprise in Greece, in May 2011.
Despite the adverse economic conditions in Europe faced by the Club Med's headquarters, its performance in several financial measures rose in the first half of 2012, bucking the general declining trends, from the same period last year. Among those measures, Club Med saw its revenue grew by 3.8% to 783 million euros. Its net profit was up 70% to 17 million euros. Club Med also progresses its business expansion in China, and speeds up construction of a second leisure resort in Guilin, China, targeting at an opening later this year. It also plans to expand the number of leisure resorts in China to the amount of 5 by 2015, making China their second largest market after France. As for Folli Follie, its revenue for the first quarter of 2012 was 229 million euros, up 4.6% year-on-year. Its operating profit for the quarter amounted to 42.6 million euros, up 13.3% from the same period last year. Despite the sovereign debt crises in Greece and Europe, Fosun assisted Folli Follie's business development in terms of store location, brand building, etc. in the Greater China region as an active shareholder, leveraging the Group's solid foundation in industrial operations and business connections. Since the Group's involvement, Folli Follie's sales derived from China recorded strong growth. The strong growth from China of these two enterprises after Fosun's investment affirmed the Group's successful investment model and its quick value-adding capabilities in China.
Growth Engine 4: Rapid Expansion in Asset Management
Fosun's asset management business segment has been growing rapidly during the Reporting Period. The segment will continue to expand and become a profit driver with stability and growth. The scaled expansion in asset management will be beneficial to optimising the Group's capital structure and improving its debt profile while exhausting its edges in investments and enhancing its revenue without incurring in excessive financial risks. Fosun's capabilities in asset management had been widely recognised by the Limited Partners (LPs) in China and overseas. Fosun received support from Prudential Financial, Inc., which became the Group's first international LP with a US$500 million investment. Meanwhile, Carlyle-Fosun Fund has been included on the list of the first batch candidates for QFLP (Qualified Foreign Limited Partner) in China. During the Reporting Period, Star Capital completed its Phase II of fundraising, its fund scale thus reached RMB5.21 billion in aggregate. The real estate funds of Forte also increased to RMB3.18 billion in size.
As at the end of June, the Group's asset management business reached a scale of RMB16.61 billion, of which RMB3.55 billion, or 21.4% of the total, was contributed by the Group. Of the 19 funds, the real estate funds contributed RMB8.4 billion while RMB-denominated private equity funds and USD-denominated funds contributed to RMB4.4 billion and RMB3.8 billion of the total respectively. In the first half of 2012, the Group invested in 14 new projects for RMB1.41 billion in aggregate, and topped RMB290 million in 3 existing projects. The total amount invested in the first half of 2012 was RMB1.71 billion, aggregating to RMB6.9 billion of total investment by the Group so far.
From now on, Fosun will continue to develop its scale of assets under management. In terms of investment styles, the Group will add differentiated funds to enrich the product range, on top of the existing growth funds and real estate funds denominated in RMB and USD. Internationally, the Group will also actively enrol institutional and individual investors as LPs, targeting at sovereign funds, pension funds, university endowments and family offices; domestically, the Group will target at institutional investors, large-scale enterprises and high-net-worth individuals. Meanwhile, the Group will also invest in its own funds. Currently, the Group has a total of 29 investment projects and another 29 projects established as reserve, including private equity and real estate projects. The private equity projects are involved in sectors including financial services, consumption upgrade, manufacturing upgrade and resources & energy.
Fosun's 20th Anniversary: Proactively Promote "Two Economies + Two Rejuvenations"
2012 marks the 20th anniversary of Fosun's establishment. Since inception, Fosun has been persisting in its core corporate value of "Self-improvement, Teamwork, Performance and Contribution to Society". The Group has been enjoying rapid development as it grasped major growth momentum in different stages of economic development in China and invested in fast-growing industries. For the past 20 years, Fosun has always been grateful for the support it received. While pursuing economic development, the Group also shares the fruitful results of development with its staff, partners and communities, taking the initiative to contribute the society in return. Meanwhile, Fosun also actively contributes its efforts to improve the business and natural environments of China so as to support the rejuvenation of Chinese economy and culture. These efforts were made through a wide array of activities including donations made to the frontline Fukushima rescue forces in Japan's nuclear crisis last year, a cultural event in collaboration with the Musée du Louvre in France, and support for intangible cultural assets such as Wu opera and the protection and promotion of Dongyang wood carving.
In the first half of this year, Fosun co-hosted a major branding event in the United States with strategic partners such as Prudential Financial, Inc., Fortress and China Entrepreneurs Forum in April. In July, the Group co-hosted another major branding event in London titled "Crossing Cultural Borders – A Night Celebrating Entrepreneurial Spirit" with Links of London, a renowned brand under Folli Follie Group, and China Entrepreneurs Club etc. The event gathered entrepreneurs across the world to enhance cultural exchange and interactive communication, representing an important milestone in Fosun's 20-year history.
