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Globalization 3.0 enters the harvest period with strong fundamental resilience, Fosun International initiates value reassessment

Innovation and globalization strategies have become Fosun's two core growth engines.

Author |Wooden box

Editor |Novice

On March 30, Fosun International (0656.HK) announced its 2025 annual performance. The group’s revenue was 173.4 billion yuan, with adjusted operating profit from industrial operations at 4 billion yuan.

Unlike previous reports, this time Fosun International, in accordance with the principle of prudence, conducted non-cash impairment provisions and value reassessments for some real estate projects showing signs of impairment and goodwill as well as intangible assets in certain non-core business segments, resulting in an annual book loss of 23.4 billion yuan. The announcement emphasized that this provision does not affect the company’s overall operations or cash flow.

For Fosun, proactively streamlining and focusing on core businesses enables the company to move towards a more agile, healthier, and sustainable direction. As Chairman Guo Guangchang of Fosun International stated in his letter to shareholders:

"Choosing to fix the roof on a sunny day, we are now letting go of the burden to pursue foreseeable and sustainable growth in the future. We must ensure our core businesses are done well, deeply, and thoroughly. This is the path Fosun needs to take to achieve greater stability and long-term success."

So what gives the company the confidence to choose this moment to 'fix the roof'?

Upon closer analysis of the company’s fundamentals, it becomes evident that the basic operations of Fosun’s various businesses remain robust, exhibiting strong resilience and growth momentum. Key industries such as pharmaceuticals and healthcare, insurance and finance have shown positive development trends. The strategic layout has shifted from asset-heavy to asset-light operations, from traditional industries to innovation-driven approaches, and from domestic focus to global presence.

Innovation + Globalization: From product exports to system-wide globalization

Without innovation, you’re out; without globalization, there is no future.

From scale to quality, from resource integration to value creation, Fosun's path to globalization inevitably requires a close integration with innovation capabilities, complementing each other almost simultaneously starting in 2006 with the layout of pharmaceutical R&D innovation and in 2007 with the initiation of global industrial expansion.

After more than a decade of exploration, Fosun has successfully built a global innovation and operational capability system, moving from 'buying globally' into the 3.0 era of 'earning globally,' progressing towards systematic globalization of products, services, and brands. Globalization has become the core competitiveness and growth engine of Fosun International.

Fosun’s overseas revenue surged significantly from 56 billion yuan in 2020 to 94.8 billion yuan in 2025, accounting for 54.7% of total revenue, an increase of 5.4 percentage points. This marks that Fosun’s globalization strategy has entered a high-quality harvest period, with notable effectiveness in deep international operational execution.

01 Pharmaceuticals Sector: Overseas growth of 15%, fruitful external BD achievements

Fosun Pharma, a core enterprise under Fosun, achieved 41.6 billion yuan in revenue in 2025, a year-on-year increase of 1.45%. Its overseas revenue reached 12.977 billion yuan, a year-on-year increase of 14.87%, accounting for 31.15% of total revenue, an increase of 3.64 percentage points compared to the previous year.

Currently, Fosun’s globalization process in the biopharmaceutical field has upgraded strategically from 'product exports' to 'system exports.' Breakthroughs have been made across innovation R&D, production quality, registration access, commercialization, and academic influence, establishing a global operational network covering markets in China, the US, Europe, Africa, India, and Southeast Asia.

The core product Hansizhuang from Fosun’s biomedical innovation platform Henlius generated revenue of 1.493 billion yuan, a year-on-year increase of 13.7%, continuously unleashing its global commercialization potential. It has been approved for marketing in over 40 countries and regions, with expanding indications, and is expected to become a blockbuster domestic innovative drug targeting 10 billion yuan in sales.

Significant achievements were also made in BD, with the total amount of upfront payments for out-licensing and co-development exceeding 260 million US dollars in the whole year, and the total potential milestone payments surpassing 4 billion US dollars.

Among them, the global licensing project YP05002 targeting GLP-1 with Pfizer involved an upfront payment of 150 million US dollars and a total potential amount of 2.085 billion US dollars, fully demonstrating Fosun Pharma’s global competitiveness in innovative R&D.

02 Insurance Sector: Strong local presence while continuing external expansion

Meanwhile, Fosun's domestic and overseas insurance enterprises achieved comprehensive growth. Fosun Portugal Insurance and Peak Reinsurance have consolidated their local advantages while continuously expanding and penetrating into overseas markets.

For example, Fosun Portugal Insurance has not only maintained its leading position in the Portuguese market but also reached an overall market share of 28.1% in Portugal by 2025. Its international business has maintained rapid growth, accounting for over 30% of the total consolidated business scale, with more than 60% coming from the Latin American region.

In 2025, Peak Reinsurance received approval from the International Financial Services Centers Authority (IFSCA) in India to establish a reinsurance branch of the IFSC Insurance Office (IIO) and obtained relevant licenses. It continues to focus on emerging markets while further increasing its penetration in mature markets such as Europe and North America.

03 Other sectors: Accelerating globalization

Leveraging Fosun's industrial layout and deep operations in over 40 countries and regions worldwide, more companies and brands under Fosun are accelerating their globalization efforts.

Fosun Tourism's Club Med conducts sales and marketing operations in more than 40 countries and regions across six continents, operating 67 resorts.

Hainan Mining's 'overseas resources + Hainan processing' model has entered the substantive operation stage. The Bougouni lithium mine in Mali produced 45,000 tons of lithium concentrate in 2025, with the first batch of 30,000 tons arriving at Yangpu Port in Hainan in January 2026. This marked the first 'zero-tariff' declaration entry for new energy minerals after the Free Trade Port was sealed off.

In addition, through its subsidiary Roc Oil and the completed acquisition of the Oman oil field project, Hainan Mining is accelerating the development of a 'mineral + energy' network covering West Africa, the Middle East, and Southeast Asia.

Yuyuan Co.'s core businesses such as jewelry and catering, as well as its Yuyuan Lantern Festival project, have made breakthroughs in 'going global.'

In 2025, the time-honored catering brand Songhe Tower opened its first overseas store in London, UK; the jewelry brand Lao Miao opened its first overseas store in Kuala Lumpur, Malaysia, using it as a base to expand into Southeast Asia and other overseas markets; the Thailand Yuyuan Lantern Festival attracted over 4 million visitors.

The fundamental business demonstrates robust resilience, with excellent data and clear growth logic.

Fosun's business is mainly divided into four segments: the core companies in the health segment include Fosun Pharma, Fosun Henlius, and others; the happiness segment includes Yuyuan Co., Fosun Tourism Group, and舍得Liquor, among others; the wealth segment mainly includes Fosun Portuguesa Seguros, Peak Reinsurance, as well as domestic entities like Fosun United Health Insurance and Fosun P&C Life Insurance; the core company in the intelligent manufacturing segment is Hainan Mining.

(Fosun International Corporate Structure, 2025 Annual Report)

During this reporting period, the total revenue of Fosun's four core subsidiaries—Fosun Pharma, Yuyuan Co., Fosun Portuguesa Seguros, and Fosun Tourism Group—reached 128.2 billion yuan, accounting for 74% of total revenue, an increase of three percentage points year-on-year.

Aside from the sluggish consumer sector impacted by macroeconomic factors, Fosun’s core businesses such as pharmaceuticals, tourism, and insurance have demonstrated strong resilience and clear growth logic, with excellent financial performance and a solid foundation.

Fosun Pharma has driven high-quality development through dual engines of innovative drugs and globalization, completing a strategic upgrade from high-barrier generic drugs to innovative pharmaceutical enterprises. Its industry coverage spans 'pharmaceuticals + devices + services,' making it a representative of China’s Big Pharma competing in the global pharmaceutical landscape. In 2025, revenue from innovative drugs reached 9.893 billion yuan, accounting for 33.16% of pharmaceutical business revenue, with innovative drugs becoming the core growth engine of Fosun Pharma.

Over the past five years, Fosun Pharma has invested more than 28 billion yuan in R&D. In 2025, R&D investment reached 5.9 billion yuan, including 5.361 billion yuan in pharmaceutical R&D, with 4.303 billion yuan related to innovative drugs, accounting for over 80%. Currently, four drugs have exceeded 1 billion yuan in sales, while six products have reached sales between 500 million and 1 billion yuan.

Furthermore, Fosun’s four insurance companies at home and abroad form a differentiated advantage of 'overseas stability as ballast + domestic high-growth breakthrough + global ecosystem synergy,' serving as a core pillar for the group to navigate cycles, contribute stable cash flow, and deliver high-growth profits.

In 2025, Fosun Portuguesa Seguros' gross premium income reached 6.53 billion euros, with net profit attributable to shareholders reaching 201 million euros, a year-on-year increase of 15.8%; Peak Reinsurance's gross premium income grew strongly by 25% year-on-year to 2.2 billion US dollars.

After years of accumulation, the two domestic insurance companies achieved new levels in both scale and quality of profitability in 2025.

Fosun P&C Life Insurance's annual scale premium reached 13.28 billion yuan, a year-on-year increase of 41.6%, achieving a net profit of 650 million yuan, a significant growth of 492%; Fosun United Health Insurance's annual insurance business revenue reached 7.84 billion yuan, a year-on-year increase of 50.1%, achieving a net profit of 139 million yuan, marking continuous profitability for five years.

Hainan Mining, in the intelligent manufacturing sector, has established a diversified resource matrix including 'iron, lithium, and oil.' Amid recent Iran-related events driving up global energy prices and restructuring within the new energy supply chain, the logic for revaluation of its resource assets is clear. The company demonstrates both cyclical risk resistance and high growth potential, with an estimated stock price increase of up to 70% by 2025.

Even in the sluggish consumer sector, Fosun's subsidiaries such as Fosun Tourism Group, Yuyuan Co., Ltd., and舍得酒业 continue to show strong operational resilience and structural highlights thanks to brand moats, structural optimization, scenario innovation, and global collaboration, awaiting a rebound and recovery across the broader consumption environment.

For instance, Club Med, under Fosun Tourism Group, set new all-time highs in performance, generating revenue of RMB 17.97 billion, representing a year-over-year increase of 2.1%. Its global average occupancy rate reached 75.8%, improving by 1.8 percentage points year-over-year, while the average daily bed rate stood at RMB 1,949, reflecting a 3.0% increase from 2024.

舍得酒业’s core metrics showed continuous improvement in 2025, with revenue reaching RMB 4.419 billion and net profit attributable to shareholders hitting RMB 223 million. The declines narrowed significantly compared to 2024. Cost optimization, improved cash flow, and channel risks have been addressed, providing substantial upside potential from its current low base.

Shareholder and executive purchases inject market confidence, with the market capitalization far below NAV.

Fosun International’s adjusted net asset value (NAV) stands at RMB 133.5 billion, corresponding to a per-share NAV of HKD 18.1, trading at a discount of approximately 75% relative to the current share price.

In addition, based on strong confidence in future business development, Fosun International recently announced intentions to conduct share repurchases and executive buybacks. On March 2, 2026, the company announced a share repurchase of up to HKD 1 billion. On March 9, it further disclosed plans for controlling shareholders and senior management to purchase shares worth up to HKD 500 million. This move reflects the belief that the current share price does not fully reflect long-term value, and they are reinforcing market confidence with concrete actions.

Subsequently, several institutions including Citi, UBS Group, and Guotai Haitong issued research reports stating that, following impairment provisions and the clearing of historical burdens, the company’s fundamental operations continue to improve. Clear profitability and dividend policies, along with manageable liquidity levels, indicate robust earnings growth in 2026, leaving significant room for valuation expansion.

Citi specifically noted that, given the positive fundamentals, Fosun International is expected to deliver strong performance in 2026. Combined with the implementation of a share repurchase of up to HKD 1 billion after the earnings announcement and the plan for major shareholders and management to purchase up to HKD 500 million in shares, this could narrow the current 75% discount to NAV. Citi assigned Fosun International a 'Buy' rating.

Meanwhile, Goldman Sachs also released a report revising its target price for Fosun International based on a 70% discount to NAV, reflecting optimism about its upward potential.

Since the issuance of the profit warning on March 6 until the earnings announcement, Fosun International's share price has continued to strengthen, with a cumulative increase of nearly 17%. This indicates that the capital market fully recognizes the disposal method of this large provision. Essentially, this round of increase reflects capital’s clear vote of confidence in the certainty of Fosun’s future performance and its fundamental recovery potential.

Fosun's substantial book loss for 2025 is due to non-cash impairment and proactive risk clearance, which does not affect operations or cash flow. Fundamentally, it represents a strategic choice akin to 'repairing the roof while the sun is shining.' The company’s confidence stems from entering the harvest phase of Globalization 3.0, with overseas revenue accounting for more than half, and a clear growth logic in core businesses.

In response to valuation gaps, Fosun International and its management have demonstrated confidence through share repurchase and enhancement plans. Multiple institutions also foresee fundamental recovery and growth prospects after resolving legacy burdens, with the market acknowledging this logic by reflecting it in the strengthening share price.

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