Chen Qiyu / Co-CEO of Fosun International

Health: Beef up global health with technological innovations

Fosun's health business consists of three pivotal segments: pharmaceutical manufacturing, medical equipment & diagnostics, and health services & consumption, among which the innovation- and globalization-driven pharmaceutical manufacturing segment makes up Fosun's pillar business with a sheer size rivaled by none. 

As a pacesetting company within Fosun’s health ecosystem, Fosun Pharma achieved operating revenue of RMB 30.2 billion in 2020, of which the revenue from pharmaceutical manufacturing reached RMB 21.8 billion, with R&D expenditures hitting RMB 3.7 billion, representing an increase of 17% over the previous year. 

In recent years, the pharmaceutical manufacturing segment has been evolving along the megatrend of "innovation" and "globalization" to achieve a string of "firsts" for three consecutive years. 

In terms of innovative drugs, Fosun has brought into being a product pipeline centered on tumor therapy, including small molecule drugs, macromolecular drugs, cell therapy and even drugs on the fronts of metabolism, central nervous system, etc.   

On the heels of the COVID-19 outbreak, medical equipment and diagnostic products quickly gave full play to their high growth potential. Fosun has managed to beef up the global responses to the outbreak with the lightning roll-out of COVID-19 nucleic acid detection kit, the manufacturing of hundreds of Beiling negative pressure ambulances around the clock, and the production expansion for Breas ventilators. Both the installations of the da Vinci Surgical System and surgeries performed with its aid have seen monumental upsurge, with Foshan Chancheng Central Hospital taking the top spot for years among China's private hospitals.   

Immediately following the outbreak, Fosun Pharma teamed up with BioNTech to jointly develop a COVID-19 mRNA vaccine in the Greater China region, which has now been approved for marketing in major international markets, and has been put into emergency use in Greater China, Hong Kong and Macau.

Happiness: To upgrade the happy experience and develop globalized industry-wide ecosystem

Aimed at serving family customers, Fosun's happiness business consists of two major segments: brand consumption and tourism & culture. Rooted in the Chinese market, Fosun is well poised to leverage global resources. In 2020, the happiness segment achieved an operating revenue of RMB 55.9 billion, of which RMB 44.05 billion was contributed by Yuyuan Inc., which has a total of 3,895 outlets of various business types distributed across China. 

In 2020, the jewelry fashion segment achieved revenue growth of 8% and saw a net increase of 620 outlets, mainly due to the expansion of offline stores, the refinement of offline business structure, the roll-out of high-margin hit products, and the mergers and acquisitions of global jewelry and fashion brands. The "Gu Yun Jin" jewelry series achieved a remarkable turnover of RMB 1 billion, which was largely contributed by the adjustment in the gross profit margin structure.   

In 2020, Yuyuan Inc. acquired Jinhui Liquor Co., Ltd. and Shede Spirits Co., Ltd. With the build-up of high-margin and high-value products in the product structure, products sold above RMB 100 continued to swell in total sales. Last year, Jinhui Liquor achieved a revenue growth of 5.89% and a profit growth of 22.44%. 

In the catering, food, and beverage segment, Fosun began to expand its Songhelou Noodle Restaurant in 2018 and 2019. Two years later, 18 new restaurants were opened in 2020 and more than 50 are expected to be opened by 2021. 

Cosmetics are the main business line of the beauty and health segment. Due to the blow of the COVID-19 pandemic throughout the year, AHAVA's global sales plunged 13.6% but its domestic sales surged from RMB 58 million to RMB 100 million, an astonishing increase of 73%. WEI achieved an 81% year-on-year growth in online sales in the Chinese market, with its annual sales ranking first on Sephora.    

The revenue of Foliday has been drastically dragged down by the pandemic, with EBITDA and net profit both plummeting. In addition to increasing incomes, reducing expenditures, cutting costs and increasing efficiency, we kicked off the pre-sale of two real estate projects in Lijiang and Taicang. In spite of the slight decline in yearly turnover, Atlantis Sanya has seen a sizeable increase in operating revenue in the second half of 2020 compared with the first half of the year and the same period last year. This shows the unique competitiveness of Atlantis Sanya and its inherent appeal to tourists. 

We also strived to bolster the thriving development of tourism and cultural IPs and online business models by building a membership system. Foliday has been actively developing its own IPs and content through Fanxiu and Miniversity. With the acquisition of Thomas Cook's assets, we have established the TCP platform and expanded membership to more than 6 million.   

Wealth: To link insurance resources with asset management and investment to form a closed loop within the wealth ecosystem

Fosun's wealth business is mainly comprised of two business segments: insurance and asset management, with gross premium hitting as high as RMB 40.2 billion in the insurance business segment. The decline in combined ratio last year has significantly added to the profitability of Fosun’s insurance business segment, not to mention the ever-mounting scale of asset management.  

The drop in combined ratio and the steady growth in the overall return on investment in the insurance business segment has been a major highlight of Fosun's wealth business. The investment business segment has seen the ongoing formation of a global asset management network with revenue topping RMB 3.3 billion, representing year-on-year increase of 10%.   

Adhering to the model of domestic and overseas dual-headquarters, Fosun Hive has seen its overseas assets adding up to USD 12 billion, with its overseas investments approximating USD 1.3 billion in 2020.   

In terms of the investment business segment, with a special emphasis on developing the CIO system, Fosun has concentrated on the core strategies of industrial M&A and investment system on sector reinforcement, equity participation, mergers & acquisitions, and the exploration of cutting-edge technologies. 

Intelligent manufacturing: To emphasize R&D investment and pipeline planning, aiming for on high growth

Fosun's intelligent manufacturing business is mainly comprised of two business segments: resources & environment, and technology & intelligent manufacturing. The former consists of NISCO, Hainan Mining, and other companies which engage in environmental businesses, and the later consists of FFT, JEVE, etc. On top of mergers and acquisitions of overseas companies and import of technology, there are also products indigenously developed by Fosun. 

In the future, we hope to build up our competitiveness on the fronts of carbon neutrality, industrial Internet, new energy, and new materials and to link our intelligent manufacturing ecosystem with rising upstream and downstream sectors:

With regard to specific business performance, NISCO has seen its revenue, profit, and cash flow growing steadily, with high-end products representing an increasingly greater share, and its energy consumption and emissions edging down continuously. Besides, NISCO has been actively incubating new businesses in response to carbon neutrality and the new economic cycle, thereby ensuring strong sustainability of its business structure. Hainan Mining has set out to fortify the dual-track development of underground mining and oil/gas exploitation. FFT is the world's leading automotive intelligent solution service provider. The global headquarters of Shanghai FFT Automation Technology Co., Ltd., a subsidiary controlled by FFT, has been settled and kicked off construction in the Jiading District of Shanghai City. The Sino-German partnership will help Shanghai FFT extend its footprint to new industries such as power batteries