Text | Radar Finance, author | Xiao Sa, editor | Deepsea
A cultural tourism asset owned by Fosun may be put on the shelf by Guo Guangchang.
Recently, Reuters reported that Fosun International is seeking to sell all or part of its equity in the Atlantis Resort in Sanya, Hainan, to reduce the company's debt burden.
In response to this rumor, Fosun Tourism Culture, a listed platform under Fosun International, stated that Fosun Tourism has always reviewed and optimized its business portfolio, focused on the growth of core businesses, and continued to strengthen operational capabilities. Currently, the company's business is operating well and its financial position is sound.
’s noncommittal response did not dispel the doubts of the outside world. In the eyes of the outside world, crossing the current cycle is still Fosun's most important task. Since September 2022, Fosun International has been questioned by international rating agencies about its weak liquidity and excessive leverage. Since then, Fosun has begun to frequently sell off its businesses including cultural and tourism assets.
Now it seems that this "disconnection" that spans more than a year is still continuing. On January 5, Fosun announced a new round of reduction plan for COFCO Science and Industry; on February 8, there was market news that Fosun was restarting its plan to sell Peak Re.
After experiencing the "perfect storm" in 2022 and debt reduction last year, Fosun International Chairman Guo Guangchang still regards survival as his primary goal. At the Shanghai Zhejiang Merchants Annual Meeting earlier this year, the old president emphasized several times, "You must survive and be prepared before the opportunity comes. Opportunities are reserved for those who survive."
"Cash Cow" Atlantis Sanya is rumored to be for sale
Earlier this month, according to a foreign media report, Fosun International was seeking to sell all or part of its stake in the Atlantis Sanya resort in Hainan to Reduce the company's debt load.
The report stated that Fosun International has begun sending information to potential buyers and consultants, and has conducted preliminary informal discussions. The targets mainly include Chinese state-owned enterprises and consortiums in the Middle East, but the specific price has not yet been made public.
Regarding the above statement, Fosun Tourism Culture, the owner of the Atlantis Sanya project, did not respond positively. It only stated that Fosun Tourism Culture always reviews and optimizes its business portfolio, focuses on the growth of core businesses, and continues to strengthen operational capabilities.
Atlantis Sanya is considered to be one of Fosun Tourism’s most profitable assets and the “profit cow” of Fosun Galaxy. The project started construction in 2014. Fosun Tourism invested more than 10 billion yuan in the construction and was completed and opened in 2018.
According to media reports, the Atlantis project is located in Haitang Bay, Sanya, covering a total area of 540,000 square meters. It is a resort hotel, entertainment, catering, shopping, performing arts, property, international exhibitions and unique marine cultural experience 8 A tourism complex integrating large-scale businesses.
According to financial report data released by Fosun Tourism, in the first half of 2023, Atlantis Sanya achieved a turnover of 890 million yuan, an increase of 82.2% compared with the same period in 2022. When
delivered his "New Year's Speech" at the end of last year, Guo Guangchang revealed that Sanya Yate's turnover in the first three quarters of 2023 will exceed 1.3 billion yuan, an increase of approximately 83.2% compared with the same period in 2022.
At the same time, Tang'an, a real estate project supporting Atlantis Sanya, helped Fosun Tourism turn losses into profits. According to Times Finance, Tang'an began to deliver and recognize revenue one after another in 2018. From 2018 to 2019, it delivered 764 units and 204 pre-sale units respectively, corresponding to recognized revenue of 3.39 billion yuan and 3.43 billion yuan, and collected nearly 7 billion yuan in cash. Accounting for 70% of the total investment.
Therefore, no matter from which perspective, Atlantis Sanya is a high-quality asset owned by Fosun.
However, some media revealed that Fosun plans to sell more than this cultural tourism asset. On February 6, according to Reuters, Fosun International is exploring the sale of a minority stake in its luxury resort chain Club Med, with a valuation target of US$800 million for the entire business.
Fosun has been in informal discussions with potential buyers and advisers about the sale in recent months, but no firm bid has yet emerged, two sources and a third person familiar with the matter said. One of the sources, who requested anonymity, said Fosun may sell up to 30% of Club Med.
As of now, the rumors of Fosun selling club med have not been officially confirmed.In fact, as early as 2022, there was news that Fosun International was looking for third-party investors to acquire a majority stake in club med, with a target valuation of US$1.5 billion.
It is reported that many capitals are eyeing Club Med, including the Swiss retail group, the French brand Lacoste Crocodile, Aigle and the Saudi Sovereign Wealth Fund (PIF) all seem to have a lot of interest in Club Med.
As the world's leading "exquisite all-inclusive" vacation brand under Fosun Tourism, club med is also the revenue pillar of Fosun Tourism. According to the 2023 interim report, the revenue proportions of club med and others, Atlantis Sanya, resort asset management center, Fuyu Club and related businesses were 84.29%, 10.43%, 4.36% and 0.92% respectively.
html On January 13, at the 2023 Shanghai Zhejiang Merchants Annual Meeting, Guo Guangchang said that Fosun’s most important focus is on two sectors: “One is biomedicine and general health; the second is the cultural tourism sector, especially ice and snow tourism. "Guo Guangchang said that in Fosun's future development, it must focus on its ability to operate light assets and seize opportunities in light asset operations.However, there are various signs that the disposal of Fosun’s cultural and tourism assets has not stopped. In June 2022, Fosun Tourism sold the club med resort Gregolimano in Greece to French reits primonial reim and leased it back.
In 2023, Fosun Tourism will sell resorts in Turkey and the West Indies, as well as two hotel brands under Thomas Cook, casa cook and cook’s club.
html Assets have been sold off many times in 6 years
At the performance meeting at the end of March last year, Guo Guangchang lamented that 2022 is a special year for Fosun and a "perfect storm". Fortunately, Fosun has successfully passed through this storm.
Looking back on this crisis, from the perspective of the overall environment, since the outbreak of the new crown epidemic, Fosun Group’s real estate, tourism, and consumption have all been greatly affected.
On June 15, 2022, the rating agency Moody's placed Fosun International's corporate family rating on the watch list for downgrade, on the grounds that Fosun's liquidity at the holding company level is very weak.
This report brought a huge market impact, and Fosun Galaxy had to start "reducing burdens and downsizing", including reducing its holdings in core assets such as Fosun Pharmaceuticals, Yuyuan Shares, and Fosun Tourism Culture.
According to media statistics, as of March 2023, through a series of asset transfers (including the sale of 60% equity of Nanjing Nangang), Fosun Galaxy has withdrawn cumulative funds of more than 35 billion yuan.
Among them, Guo Guangchang seemed unable to let go of his breakup with Nanjing Steel. He laughed at himself at the Zhejiang Merchants Annual Meeting, "There is a kind of love called letting go."
Judging from the results, "slimming down" has also had an immediate effect. As of June 30, 2022, Fosun International's total debt was 261.118 billion yuan.
According to the 2023 mid-term report, Fosun International’s total liabilities have dropped to 220.902 billion yuan, with liabilities reduced by more than 40 billion yuan. At
’s performance briefing at that time, Guo Guangchang stated that it would continue to reduce debt, continue asset-light operations, and focus funds on R&D and innovation. It can be seen from
's recent speech that he believes that the current difficulties encountered by some companies are due to high debt and heavy assets. "It is impossible to bear the high capital costs with current heavy asset income, which is unsustainable." .
At present, Fosun’s round of fire sales seems to be continuing, and the time is beyond the imagination of the outside world. And it involves more than just the cultural and tourism sector. Various other assets of Fosunx have also been frequently sold.
Since 2014 alone, Fosun has announced several asset disposal plans. Among them, on the evening of January 5 this year, COFCO Science and Industry issued an announcement stating that the company’s 7.38% shareholder Shanghai Fosun Weishi Phase I Equity Investment Fund Partnership (referred to as “Fosun Weishi”) planned to use large-scale transactions and concentration Through bidding, the total reduction of the company's shares shall not exceed 15.3682 million shares, which shall not exceed 3% of the company's total share capital.
Tianyanchao information shows that the executive partner of Fosun Weishi Fund is Shanghai Fosun Weishi Investment Management Co., Ltd. After the latter penetrated through layers of layers, the top controlling shareholder is Fosun International, which is listed on the Hong Kong stock market, and the actual controller of Fosun International It is Guo Guangchang.
html On January 23, Fosun International announced on the Hong Kong Stock Exchange that the company's wholly-owned subsidiary plans to reduce its 5.6% stake in Banco Comercial de Portugal, which is listed on Euronext Lisbon. This reduction is expected to cash out approximately 235 million euros.After the completion of this transaction, Fosun International's shareholding ratio will be reduced from 25.63% to 20.03%, but it will still be an associated company of the Portuguese Commercial Bank.
Between November 13 last year and January 9 this year, Fosun International’s wholly-owned subsidiaries have reduced their holdings of a total of 652 million shares (approximately 4.31% of the shares) of Portuguese Commercial Bank, at an average price of approximately 0.3 euros per share. , involving a total of approximately 196 million euros.
If the recent reduction of holdings is completed, Fosun International will cash out a total of approximately 431 million euros.
In addition, some transactions are still rumored. On February 8, there was market news that Fosun was restarting its plan to sell Peak Re, aiming to seek a valuation of approximately US$1 billion, and BNP Paribas was helping it find a buyer.
"I must persist in living this year"
"It is very difficult now, but I think it will be fine. The most difficult time has passed. If I didn't fail last year, I must persist in living this year." This is the content of Guo Guangchang’s speech to a group of entrepreneurs at the Zhejiang Businessmen Annual Conference held at the beginning of this year.
On Weibo, he emphasized that “the most important thing is to adhere to the entrepreneurial spirit” and “Faced with the current domestic and international environment, Fosun has made timely strategic and business adjustments to focus on the core track of household consumption and focus on building its own capabilities. Use our good products to serve global family customers well."
Through these few speeches and words, the outside world can get a glimpse of what this entrepreneur with rich experience in the business field is thinking at this stage. Thoughts.
Fosun has spread its hands into various fields compared to before. After experiencing the test of liquidity, Guo Guangchang, the leader, has also changed his perception.
In his 2024 New Year's speech, he used mining as a metaphor for this strategic change. "Fosun used to explore and mine in parallel. Now it has explored many mines and found industries that can form advantages. In 2024, we will We need to focus on these industries, and dig deeper on the basis of prospecting for good mines, and mine mines with high added value."
At the same time, Guo Guangchang, who was born in the Department of Philosophy, also knows that dangers and opportunities always coexist, and he does not want to Give up the opportunities behind any crisis.
According to media reports, at this year’s internal annual meeting of Fosun Group, Guo Guangchang asked the team in his speech to “judge heroes only by their military merits” and asked everyone to exert their fighting spirit and refuse to lie flat. get out of class is over."
After a round of "squats", it remains to be seen whether Fosun can usher in the next "take-off", how high and how far it can jump.
