Fosun International Announces 2016 Annual Results Profit Attributable to the Owners of the Parent Exceeded RMB10 billion Introduction to Fosun’s New Generation of Management Talents
(29 March 2017, Hong Kong) Fosun International Limited (SEHK stock code: 00656) announced its annual results for 2016 in Hong Kong today. Profit attributable to the owners of the parent reached RMB 10.27 billion, representing a year-on-year increase of 27.7% or a CAGR of 24.7% in the past five years, exceeding RMB10 billion for the first time in Fosun’s history.
The annual results show that Fosun continued the momentum of its robust growth in 2016 even though the China and the global economies have been undergoing a period of profound adjustment. As of 31 December 2016, the Group's total assets increased by 19.5% to RMB486.78 billion, and the equity attributable to the owners of the parent grew by more than 20% to RMB92.37 billion. The compound annual growth rate (“CAGR”) of net assets was 23.7% over the past 5 years.
Fosun Group has been focusing on optimizing its balance sheet, as a result that the overall maturity period of liabilities was further extended, with mid-to-long-term debts accounting for 65.3% of the total debts, or 7.9 percentage points higher than that in 2015.
Introduction to Fosun’s New Generation of Management Talents
The Fosun Group’s chairman, Mr. Guo Guangchang, issued a letter to shareholders, in which he drew an analogy between a company’s evolution and human growth, saying, “After 25 years of development, we have grown from charismatic adolescents to blossoming youths. Looking ahead, Fosun will attach great importance to our customers’ needs, and will regard customers as its foundation for a long-term growth in enterprise value.
As Fosun grew into “a blossoming youth”, the company’s management is also evolving rapidly with the emergence of a new generation of management talents.
At a conference on its annual results, the board of directors of Fosun International announced the appointments of two executive directors, Mr. Chen Qiyu and Mr. Xu Xiaoliang, as the group’s co-presidents. Mr. Chen and Mr. Xu joined Fosun in 1994 and 1998 respectively. They represent the younger generation of managers who have grown up with Fosun from a young age. At the same time, Fosun also officially announced the appointments of three executive directors, namely Mr. Wang Can, Ms. Kang Lan and Mr. Gong Ping.
At the beginning of this year, Fosun announced a new group of global partners. Meanwhile, the various businesses affiliated to the Fosun Group are actively setting up multi-level partnership systems. As a globalized enterprise, Fosun has not only recruited members to its global partnerships from the senior management of its operations in China but also three such members from the senior management of its overseas operations.
Mr. Guo Guangchang said that Fosun's global partners were responsible for implementing missions and strategies. He said that he hoped Fosun’s global partners not only have the expertise in a certain field but also were able to integrate and utilize Fosun’s internal and external resources and to expand Fosun’s ecosystem of businesses in Fosun’s interests. He also emphasized that Fosun's partnership was not a system of life tenure. Every year, new partners come, while some existing ones go.
Creating a Happiness Ecosystem for Success with C2M Business Model
In 2016, Fosun continued to focus on the business of health, happiness and wealth in order to “Create a Happiness Ecosystem for Success with C2M business model”. Therefore, the group has been stepping up investments in innovation with smart technology, and enhancing its global industrial integration capability and global asset allocation capability.
Presently, the group’s business mix has shown the characteristics of “high growth, light asset, and capability to withstand cyclical risks”. This has resulted in consistent growth in the proportion of the business of "health, happiness and wealth" in Fosun's total assets and profit. These three businesses segments already exceeded for more than 80.0% of the Fosun Group’s total assets, and contributed RMB9.21 billion to its profit.
In 2016, the group proposed to “Create a Happiness Ecosystem for Success” with the Customer-to-Maker business model. As one of the first companies to have appreciated the opportunities presented by the C2M business model, Fosun has also promptly put in place a number of investments and operations according to its plan for business mix. Its investments and operations that can best illustrate this strategic initiative include Qinbaobao, Weiyi in the healthcare industry as well as Red Collar Kute Smart, Easy Print and goujiawang.com, etc.
For Fosun, the C2M business model means the integration of the flows of capital, information and materials into one. The integration of the three flows can happen in a single business entity, and can also take place in the entire ecosystem of businesses. Presently, Fosun is stepping up its effort to put in place investments and operations in the fields of healthcare, maternal and nursery healthcare and tourism, to establish a closed-loop system.
Fosun has been actively entering the emerging market while planning for its business mix in overseas developed markets. Its subsidiary, Fosun Pharma, acquired Gland Pharma, a leading pharmaceutical firm that specialized in medicines for injection in India in July 2016. In Brazil, the Fosun Group acquired the country’s second largest asset management company, Rio Bravo, which currently manages over RMB25.0 billion worth of fund products.