HONG KONG SAR – Media OutReach – September 1, 2022 – On September 1, 2022, after Fosun International Limited (stock code HKEX: 00656, “Fosun International”), together with its subsidiaries (“Fosun” or the “Group”) announced their 2022 interim results on August 30, Goldman Sachs, Morgan Stanley, Daiwa Capital Markets and CICC released research reports and unanimously assigned “Buy” or “Overweight/Outperform” ratings to Fosun International.
The half-year results show that in the first half, Fosun achieved sustainable revenue growth, continued to develop in technology and innovation and strengthened its internationalization strategy, its funds remained stable and its capital structure continued to be optimized, demonstrating the resilience of sustainable development. Although the Group’s net income in the first half was affected by the pandemic, rising commodity prices and capital market fluctuations, many large banks believe that the Group’s performance was in line with market expectations and are unanimously optimistic. on the shares of Fosun International.
Goldman Sachs reiterated its “Buy” rating on Fosun International with a target price of HK$11.2 in its latest research report. Goldman Sachs estimates that Fosun International in the first half of the year continued to maintain steady revenue growth, up 18% year-on-year. Although Health and Wealth segment earnings fell year-over-year due to investment losses driven by market fluctuations, Happiness segment loss narrowed significantly, mainly due to strong resumption of tourist activities abroad. The report highlights that Fosun has committed to a balanced investment and divestment strategy, continues to optimize capital structure, has sufficient cash and liquidity with a stable leverage ratio, and actively manages cash and financing costs. It has also recently strengthened its cooperation with two major banks, ICBC and HSBC China, highlighting its advantages in managing credit measures and allowing it to seize potential investment opportunities in the market. Goldman Sachs therefore believes that Fosun International has recently been trading at a low level, sees great potential in Fosun International and maintains its “Buy” rating.
Morgan Stanley said that although Fosun International’s net profit fell in the first half of the year, it was in line with expectations and reiterated its “overweight” rating with a target price of HK$11.4. The company pointed out that Fosun’s financial situation is solid, with ample and increased cash. At the end of the reporting period, the company’s cash, bank balances and term deposits increased by approximately RMB21.0 billion to RMB117.65 billion, covering 45% of its total consolidated debt. ; the debt-to-capital ratio was 56.8%. He believes that the Group’s balance sheet remains largely stable.
Daiwa Capital Markets also reiterated its “Buy” rating on Fosun International with a price target of HK$10.8. Daiwa Capital Markets believes that Fosun International’s performance in the first half is in line with company expectations and expects Fosun’s debt to be continuously optimized. At the end of the year, the debt to equity ratio was 56.8% and the Group’s average financing cost was at a low level of 4.5%. The company expects Fosun’s key financial indicators to be further optimized over the period from 2022 to 2025, and expects the Group to steadily reduce year-on-year debts, extend the term duration of debts, increases the dividends of the subsidiaries and controls the overheads of the head office, thus permanently optimizing the Group’s credit indicators. The company expects Fosun to continue to optimize its asset portfolio and dispose of “non-strategic and non-core” assets in a timely manner to improve its cash and liquidity position, enabling it to withstand macroeconomic fluctuations. and the market. Further, the company expects that with improving market sentiment and benefiting from Fosun’s diverse business portfolio and global presence, Fosun International will continue to demonstrate sustainability resilience. Therefore, the company remains bullish on Fosun International and has assigned a “Buy” rating to Fosun International.
Additionally, CICC reiterated its “Outperform” rating on Fosun International, with a target price of HK$8.50 in its research report. CICC believes that Fosun International’s core businesses have seen steady growth, and pointed out that Fosun has continuously strengthened investment and divestment management to strike a balance, improved capital structure and increased liquidity. In the first half, Fosun completed the sale of Tsingtao Brewery and continued to favor the balance between investments and divestments. The CICC believes that the asset disposals made by Fosun are all non-core positions in the secondary market, which will not affect the corporate structure, optimize the capital structure and help strengthen the financial position.
Interim results announced on August 30 show that in the first half of 2022, Fosun’s total revenue reached RMB 82.89 billion, an increase of 17.7% over the same period in 2021; the company’s operating profit reached RMB 2.33 billion, an increase of 35.5% year-on-year; investment in technology and innovation amounted to RMB 4.6 billion, a year-on-year increase of 21%.
Fosun has resolutely fulfilled its mission of “creating happier lives for families around the world”, strengthening its presence in four business segments: health, happiness, wealth and smart manufacturing. It is also one of the few enterprises in China with global operating and investment capabilities and accumulating deep technological innovation capabilities. Fosun has maintained a stable leverage ratio, high risk tolerance with its multi-currency debts and stable debt maturity, and its financial condition is healthy. During the interim results presentation held on August 31, Fosun International management said that after entering the second half of the year, thanks to the Group’s long-term adherence to operations In-depth sector reviews, the financial and operational indicators of companies in several segments quickly showed signs of a steady recovery.
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Founded in 1992, Fosun is an innovation-driven global consumer group dedicated to providing high-quality products and services to families around the world in the segments of health, happiness, wealth and smart manufacturing. In 2007, Fosun International Limited was listed on the main board of the Hong Kong Stock Exchange (stock code: 00656.HK). As of June 30, 2022, Fosun International’s total assets stood at RMB 849.7 billion. Fosun International ranks 589th on the Forbes Global 2000 2022 list, with an MSCI ESG rating of AA.