Insurance segment successfully established
Investment business experienced rapid growth
HONG KONG, March 27, 2013 /PRNewswire/ -- Fosun International Limited (together with its subsidiaries, "Fosun" or the "Group", HKEx stock code: 00656) today announces its annual results for the year ended 31 December 2012. The Group's net profit attributable to equity owners of the parent for the year amounted to RMB3.707 billion, up 8.9% from the same period previous year. As at 31 December 2012, equity attributable to owners of the parent of the Group reached RMB35.197 billion, an increase of 10.6% from the end of 2011.
2012 represents a milestone checkpoint for Fosun and at the same time a new starting point full of prospects. It was during these two decades when Fosun has evolved from an entrepreneurial start-up into a large-scale internationally renowned group and has established its unique competitive edge of "China Expertise + Global Capacity". In the past 20 years, Fosun brought together a group of top-tier entrepreneurs, businessmen and investors. Leveraging the Group's resources, experience and professional team, Fosun has built a large-scale platform that allows resources sharing, helping facilitate better development of more Chinese enterprises.
At this cross-section of time in the Group's 20-year corporate history, Fosun fully understands the need to revisit its entrepreneurial passion emerged when it was first established and adhere to its determination of regaining entrepreneurial spirit, thereby leading the Group to achieve leapfrog development. To this end, "Regain Entrepreneurial Spirit, Start Afresh at 20" becomes Fosun's new guidance in the next 20 years.
Successfully established the insurance segment, from which insurance-float-funded investment model will take off
In 2012, Fosun established Pramerica Fosun Life Insurance and Peak Reinsurance. Together with Yong'an P&C Insurance invested in the earlier years, the Group has initially established an insurance business model driven by "three growth drivers", namely property and casualty insurance, life insurance and re-insurance. As at the end of 2012, funds available for investing from the insurance business comprised RMB8.9 billion and US$550 million.
Of which, Pramerica Fosun Life Insurance leverages Prudential Financial's strong and innovative product design capability and Fosun's premium edges including an extensive network of channels in China, in designing and developing unique product offerings, corporate sales and part-time agency distribution models, thus enhancing its business to make a steady progress. Peak Reinsurance, a joint venture between the Group and International Finance Corporation under the World Bank Group, has officially started its operation in Hong Kong. Its business covers the whole Asia Pacific region. Yong'an P&C Insurance, having recruited Mr. Jiang Min, a leader of China's P&C insurance industry to take the helm, completed a smooth transition of its management as it is on course to achieve further business growth, with its new development strategy receiving wide recognitions from shareholders and other relevant parties.
Added a new case of large-scale investments
On the heels of the US$316 million investment in Focus Media in 2009 that yielded a 41.8% IRR, Fosun invested at the Group level RMB2.965 billion in Minsheng Bank in 2012 that yielded a 49.1% IRR. The investment was made on the principle of value investment, showcasing Fosun's capability in embracing strategic business development opportunities. Meanwhile, through its active participation in Focus Media's privatization plan, Fosun may be able to cash out substantially from its divesture of a certain portion of the shares and lock in the gains within this year, while continuing to share the business growth of Focus Media with the remaining interests it holds.
Asset management business had rapidly taken shape, completing a migration from debt leverage to third-party equity funds leverage, thereby secured safety of shareholder interests
Fosun has been intensifying its efforts developing its asset management business since 2011. This business has undergone rapid growth and received wide recognitions from across the industry. In 2012, it was named once again one of the "Top 50 Private Equity Investment Institutions of China" by Zero2IPO and being ranked third in the league. As at the end of 2012, the size of assets under management (AUM) of the Group amounted to RMB16.66 billion, accumulated within a period of just two years, of which RMB3.09 billion came from Fosun's own funds. Income from its asset management business includes management fees, carry, management fees for property project development, aggregated about RMB347 million. In the areas of fund raisings for new investment funds, an even larger new RMB private equity fund, and a new US dollar private equity fund are expected to complete fund raisings within 2013.
In the area of facilitating companies to achieve share listings, Fosun has been making remarkable progresses. In October 2012, Fosun Pharma was successfully listed in Hong Kong in a transaction that raised RMB3.966 billion proceeds, making it the most successful share IPO in the pharmaceuticals industry for the year. For the whole year of 2012, Fosun still helped a total of four investees launched share IPOs, despite the much tightened IPO market in domestic China during 2012.
Tapping China momentum, embracing the Internet
China momentum and development of the Internet reached a turning point in 2012. For the first time in history, the supply of labour experienced a net reduction. As aging of the country's population deepens, the demographic dividend is shifting its influence in fuelling of manufacturing labour supply to demand for consumption and financial services. Services industries are embracing exponential growth in the future. There will be enormous potential from urbanization. Meanwhile, urbanization is also experiencing differentiation in directions. Industrialization will be subject to the usual impacts of escalating costs and weakening external demand. Meanwhile, requirements will become increasingly stringent for product quality and safety, energy conservation, environment protection and supply chain efficiency, thereby intensified the tension further. In finance, direct financing will see increases in its proportion, while proliferation of wealth management products will in practice speed up real interest rate deregulation. At the same time, the Internet is inflicting lasting impacts on efficacies of traditional channels. It will be posing earth-breaking impacts on drivers of production services and lifestyles of the next generation of consumers in the next few years.
Leveraging its deep understanding of these changes in China momentum, Fosun will persistently improve its dimension of assessing investments and begin planting leads on industries that will benefit from the changing China momentum and the Internet. Also, Fosun will continue to facilitate development of its investees, leveraging its aggregated strategic capabilities, industry resources, channels and networks, and excellent relations with governments and other enterprises.
Outlook
2013 marks the first year of Fosun's new guidance of "Regain Entrepreneurial Spirit, Start Afresh at 20". Fosun will continue to adhere to the principle of value investment and stay on implementing its unique investment model of "combining China's growth momentum with global resources" as it continues to identify and tap development opportunities from upgraded consumption, services industries, finance, resources and energy, manufacturing upgrading, with a view to staying connected with high-quality funding globally, premium brands, professional management and excellent team resources so as to maximize investment value. Fosun strives to evolve steadily into an insurance-focused investment group, thereby enabling further strides towards its vision of becoming a "premium investment group with a focus on China's growth momentum".
