Guo Guangchang has made a decisive move, undertaking a major cleanup of assets exceeding 700 billion yuan. At the end of March, he wrote a candid open letter to shareholders, stating that, based on prudent principles, the company would record a substantial one-time impairment, resulting in a book loss of 23.4 billion yuan for FOSUN INTL in 2025. "Losses are never good," Guo expressed deep apologies to shareholders, calling such performance unprecedented in Fosun's over thirty-year history. He explained this was a strategic choice to "repair the roof while the sun is shining."
Objectively, during this significant cyclical adjustment, Guo Guangchang, renowned for his investment acumen, has not performed excellently and has appeared somewhat passive. Fortunately, compared to many peers, he has ensured the safety of the FOSUN INTL ship. Its fundamental business remains intact, still holding multiple core high-quality assets, with a combined net asset value exceeding 93 billion yuan. By April 2nd, FOSUN INTL's market capitalization had rebounded over 25% from its low point over twenty days prior.
For Guo Guangchang, re-evaluating assets and recognizing impairments is a continuation of his "slimming down and strengthening" strategy. In 2022, sensing major cyclical changes, he proposed "advancing in some areas while retreating from others, focusing on the main business," leading to a significant exit from heavy assets and non-core operations. Over the past three years, FOSUN INTL's asset base has shrunk to 716.2 billion yuan, a contraction of over 130 billion yuan in three years, with 80 billion yuan reduced in the past year alone. This one-time impairment, thoroughly squeezing water from bloated assets, marks the conclusion of this round of adjustments.
The largest asset losses came from the property sector. Due to the ongoing downturn in real estate, Fosun made substantial impairment provisions for property projects showing signs of devaluation, including properties held for sale, properties under development, and investment properties, with total impairments exceeding 12.1 billion yuan. According to Guo's explanation, real estate does not constitute a large portion of Fosun's business. However, the company had acquired several prominent land plots or projects, such as the Fuyou land parcel in Shanghai's Bund area, acquired jointly with Ant Group for 12.93 billion yuan. As the industry undergoes structural adjustment, these projects could not remain immune. For instance, according to disclosures from Yuyuan Tourist Mart, several residential projects in the Yangtze River Delta and areas around Beijing experienced impairments, with inventory write-down provisions exceeding 1.5 billion yuan. Internally, efforts are being intensified to sell off properties within the system to accelerate capital recovery. A source from Fosun Tourism Group indicated that supporting properties in projects like Taicang and Lijiang would be fully disposed of by 2026.
The remaining portion of FOSUN INTL's impairments stemmed from goodwill and intangible assets related to non-core businesses, investments made during Fosun's expansion phase that now underperform financially. Goodwill impairments from just two assets, Baihe Jiayuan and St Hubert, reached 2.4 billion yuan. "Fosun was particularly brave in the past," Guo Guangchang noted somewhat self-deprecatingly in his letter, acknowledging a value discrepancy between the current situation and initial investment judgments, confirming the necessity of this asset write-down. He also reiterated that the impairments did not affect daily operations, cash flow, or business functioning, emphasizing that core businesses like pharmaceuticals and insurance continue to grow steadily. In 2025, Fosun's full-year revenue was 173.4 billion yuan, with net cash flow from operating activities remaining positive. Financing capabilities and channels remain unimpeded, and the average debt cost is being optimized. For Guo Guangchang, having shed this burden, he still possesses solid assets and substantial capital to navigate the cycle and optimize operations.
"There have been successes and failures; overall, we paid considerable tuition fees," Guo Guangchang characterized the past expansion in his shareholder letter. While there were many loss-making projects, it's also important to objectively recognize the substantial gains Fosun's team achieved on several projects, particularly in globalization. Taking German private bank HAL as an example, Fosun acquired it for 210 million euros in 2016 and completed its divestiture in July 2025 for a total transaction value of approximately 700 million euros. HAL was a traditional European bank with a large, dispersed workforce, small but comprehensive operations, and an overly cautious style. After Fosun's team entered, they adjusted business priorities and reorganized management. Subsequently, Fosun and HAL jointly promoted four M&A projects to strengthen core competencies, expanding business from German-speaking regions to English-speaking ones and obtaining a digital custody license. After years of management, HAL's assets under management soared from about 4.3 billion euros in 2016 to 265.213 billion euros by the end of 2023, with net profit increasing from 10.1 million euros to 83 million euros.
"The success of the acquisition is closely related to Fosun's judgment of the major cycle; making money from the big cycle is most important for investors," an informed source revealed. The eight-year partnership between Fosun and HAL spanned a major economic cycle; once cyclical trends shifted, Fosun inevitably adjusted its globalization pace and re-evaluated these assets. "Don't fight the cycle, and don't assume profitable companies will always be profitable," the source explained, noting that selling is a rational choice when assets no longer align with strategic goals or offer synergistic value. In mid-2024, Guo Guangchang decided to sell it to a Dutch bank, retaining the fund business. To find a suitable home for HAL, he did not choose the highest bidder. The entire project ultimately achieved a double-digit internal rate of return and yielded significant intangible benefits, such as management experience from the global team, incentive mechanism design, and negotiation skills with local regulators. The exit from HAL was both a decision to slim down and a reflection of Fosun's growing global capabilities. Currently, overseas revenue accounts for 54.7% of the total. "Today, we truly integrate operations and investment on a global scale," as Guo himself stated, Fosun has reached the stage of "grafting global resources with Chinese capabilities."
Over the past 34 years, Guo Guangchang built a vast asset portfolio through global布局, diversified M&A, and industrial operations, resulting in a long and broad front. FOSUN INTL's asset scale peaked in mid-2022 at around 850 billion yuan, with controlling or significant stakes in as many as 19 listed companies. Alongside large-scale M&A, Fosun's internal leverage continuously increased, with a long-term asset-liability ratio around 75%, naturally creating pressure during counter-cyclical periods. "The first priority is survival, to navigate through storms and crises." Starting in 2022, Guo Guangchang decided to decisively slim down, completing the exit of approximately 75 billion yuan equivalent in non-strategic and non-core assets over three years, followed by another exit of over 17 billion yuan in assets in 2025. To date, total divested assets exceed 90 billion yuan, involving equity in listed companies like Zhongshan Public Utility and Nanjing Iron & Steel, as well as non-listed assets in insurance, banking, and real estate.
This wave of contraction involved selling some good assets that might seem regrettable. For instance, the 20% stake in Zhaojin Mining (H-shares) was sold for about 4.4 billion HKD in 2022, while its current market price is around 23 billion HKD. "Strategic adjustments inevitably bring short-term pain; Fosun insists on doing what is right, difficult, and requires time to accumulate," Guo Guangchang admitted, emphasizing the need to pursue predictable, sustainable future growth. Currently, FOSUN INTL has entered a stage of "balanced advance and retreat," focusing main resources on four core enterprises: Fosun Pharma, Yuyuan Tourist Mart, Fidelidade (Portugal), and Fosun Tourism Group. In 2025, these four collectively generated revenue of 128.24 billion yuan, accounting for 74% of total revenue. "We must do our core main businesses well, deeply, and thoroughly," Guo said. Among them, Fosun Pharma has reached a scale of 41.6 billion yuan, with nearly 70 innovative drug projects in the pipeline and plans to spin off its vaccine business platform for a Hong Kong listing. Fosun Tourism Group also has a scale of 20 billion yuan, with the Sanya Atlantis project also slated for a spin-off listing. These businesses offer more stable cash flow and better resilience to cycles. Guo Guangchang has set medium-term financial targets for FOSUN INTL: to gradually restore profit scale to 10 billion yuan; at the group level, to recoup 60 billion yuan in funds, reduce total debt below 60 billion yuan, and strive for an investment-grade credit rating. "For the future Fosun, we will not strive for temporary gains; we aim to establish a lasting foundation," he stated.
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