Shanghai Yuyuan Tourist Mart (Group) Co., Ltd. (600655.SH), a key component of the "Fosun" ecosystem focused on the "Happiness" sector, is facing significant challenges. The company first indicated in late January that it anticipates a loss for 2025, which would be its first annual loss since listing 34 years ago, with the deficit reaching approximately 4.8 billion yuan. In February, it further received a regulatory inquiry from the Shanghai Stock Exchange concerning its prior sale of Ningbo Star Health Asset Management Co., Ltd.
On February 10, Yuyuan emphasized that the divestment was a routine business operation intended to help the company streamline its operations, revitalize static assets, accelerate capital recovery, and concentrate more resources on high-potential, high-growth, high-profit, and highly synergistic core industries.
From the perspective of Jiang Han, a senior researcher at the Pangoal Institution, this "streamlining" initiative helps reduce the asset-liability ratio, recapture cash flow, and focus on advantageous core businesses like jewelry and fashion, aligning with the broader macro trend of deleveraging and enhancing quality and efficiency. While selling assets can alleviate short-term pressure, a lack of new growth drivers could lead to a "blood-letting style" of downsizing, potentially weakening long-term developmental momentum.
As of the market close on February 12, Yuyuan's share price was 5.14 yuan per share, down 1.34%, with a total market capitalization of 20.007 billion yuan.
The regulatory query directly addressed the asset sale. In its February 10 response to the SSE's inquiry, Yuyuan revealed that the exchange questioned the necessity and rationale behind selling Ningbo Star Health. The history dates back to 2018 when Yuyuan issued shares to 16 parties, including its controlling shareholder's affiliate Zhejiang Fosun and Forte Investment, to acquire all or partial equity in 24 companies, including 100% of Ningbo Star Health.
Prior to this sale, on June 26, 2025, Yuyuan increased its capital contribution to Ningbo Star Health through a debt-to-equity swap, raising its registered capital from 110 million yuan to 236 million yuan. The buyer, Ningbo Plastics, was viewed by the SSE as having little apparent synergy with Ningbo Star Health, as its main business involves plastic particle trading and film production.
Yuyuan explained that Ningbo Star Health primarily holds a health and wellness asset in Jiangbei District, Ningbo, which was still under development at the time of acquisition. Ningbo Star Health funded its development through project pre-sale funds, temporary shareholder support, and external financing, completing the project's construction and filing without distributing any dividends during this period. In June 2025, Yuyuan converted a 126 million yuan balance of shareholder advances into registered capital. These funds were described as "financial support" for the normal project development of Ningbo Star Health and did not constitute占用 of listed company funds by the controlling shareholder or its affiliates.
From a performance perspective, Ningbo Star Health indeed proved to be a problematic investment for Yuyuan. Between 2018 and October 31, 2025, the company was profitable only in 2021 (6.53 million yuan), recording losses in seven out of eight years, with performance deteriorating annually. By October 31, 2025, Ningbo Star Health reported a loss of 87.18 million yuan, the highest in its history.
According to Yuyuan, Ningbo Star Health's cash flow could no longer support its expense burden. Consequently, Yuyuan decided to sell the entire company for 91.79 million yuan, based on its net asset value. As of September 30, 2025, Ningbo Star Health had total assets of approximately 240 million yuan and an asset-liability ratio of 57.7%, which was deemed reasonable. The buyer has since paid the full transaction consideration of 150 million yuan.
When questioned about selling a health and wellness property company to a plastics manufacturer, Yuyuan stated that, as post-transaction management would be the buyer's responsibility and falls outside its decision-making scope, it did not assess the buyer's operational capabilities and thus could not comment on the reasons or rationale for the cross-industry acquisition.
Yuyuan further emphasized in its response that the transaction was conducted independently based on normal commercial objectives, involved no undisclosed related-party relationships, agreements, or other interest arrangements, and that the pricing and terms adhered to market principles.
Addressing concerns about whether Ningbo Star Health was sold at a loss and the timing of the pre-sale debt-to-equity swap, Yuyuan asserted there was no loss, citing a supporting appraisal report and market fair value data. Regarding the "last-minute" debt-to-equity swap, it stated this was beneficial for handling Ningbo Star Health's asset-liability situation and, post-swap, reduced inter-company dealings, which is a standard practice.
Yuyuan's 2025 performance forecast indicates an expected net loss attributable to shareholders of 4.8 billion yuan. The reasons cited for the loss include asset impairment provisions for certain real estate projects and goodwill; impacts from the real estate sector leading to dynamically optimized sales strategies, accelerated inventory reduction, and capital回流, which decreased the actual selling prices and gross margins of the company's composite functional real estate business; and structural changes in sales creating short-term pressure for related industrial segments, reducing revenue and gross profit compared to the previous year and negatively affecting net profit.
Bai Wenxi, Deputy Chairman of the China Enterprise Capital Alliance and Chief Economist for China, believes Yuyuan's first loss since its 1992 listing results from a triple blow: asset impairment provisions, collapsing real estate gross margins, and contraction in its consumer business. This suggests that a one-time substantial impairment could create conditions for a "lighter" future performance, but the 4.8 billion yuan scale indicates significant historical burdens. It also demonstrates the vulnerability of the "real estate + consumption" dual-driver model adopted since 2018 during an industry downturn. As one of the SSE's "Original Eight Stocks," this inaugural loss impacts investor confidence far beyond the numerical value.
A review of Yuyuan's divested assets list includes: in 2022, a 13% stake in Jinhuijiu (1.937 billion yuan), shares in Taikang Insurance (1.157 billion yuan), and shares in Zhaojin Mining (approximately 4.752 billion Hong Kong dollars, roughly 4.252 billion yuan); in 2023, an 80% stake in IGI Group (455 million USD, roughly 3.159 billion yuan); in 2024, Shanghai Xingguangyao Plaza Phase II (1.515 billion yuan) and the Hoshino Resorts TOMAMU ski resort in Hokkaido, Japan (1.97 billion yuan); and in 2025, Ningbo Star Health (150 million yuan). A rough estimate totals approximately 14.14 billion yuan in asset divestments over these years.
In Bai Wenxi's view, Yuyuan's asset剥离 exceeding 100 billion yuan over three years is a necessary survival strategy short-term but carries a risk of "overcorrection" long-term. Potential concerns include the sale of IGI Group realizing a 5x return, suggesting some assets held long-term value—was the exit too early? Divesting health and wellness, cultural tourism, and financial sectors also weakens the synergistic effects of the "Hive City" strategy. Crucially, when there are no more assets to sell, can the core business support the valuation? These issues warrant careful consideration by Yuyuan, as "streamlining" is a passive defense rather than active optimization. If the core business does not recover, "slimming down" could ultimately become "bone-sawing."
Regarding why Yuyuan did not fully exit its stake in Jinhuijiu, Bai Wenxi analyzes that, from a compliance perspective, it helps resolve potential同业竞争 with Shedjiu (600702.SH), avoiding regulatory risks, while also allowing capital recovery while retaining upside potential, as liquor assets offer defensive qualities in a bear market. From a market stability standpoint, it avoids a potential stock price crash from a bulk sale, preserving market image. This reflects Fosun's conflicted mindset of "wanting both cash flow and quality assets."
It is normal for listed companies to periodically divest underperforming assets. After several years of significant sales, the question remains: how much strength is left in Yuyuan's arsenal? Yuyuan responded by stating that, as one of the "Original Eight Stocks" and a tourism landmark of Shanghai, it possesses unique assets others lack. It emphasized its strategy centered on "Oriental Life Aesthetics," continuing the legacy of time-honored brands, and enhancing activities in its core豫园商城area through IP collaborations, focusing on refining and solidifying its industries as a core management priority.
Yuyuan stressed its commitment to improving existing operations, particularly the significant gold business, noting successful new product series and numerous IP collaboration events. It mentioned recent high foot traffic at lantern festivals held in its core area.
In its announcements, Yuyuan also reaffirmed its commitment to the top-level "Oriental Life Aesthetics" strategy, continuing to streamline, recapture funds, reduce the debt ratio, and optimize its financial structure. It expressed belief that the current strategic focus and short-term performance fluctuations are necessary steps towards achieving higher-quality, sustainable development.
Prior to announcing the massive loss, Yuyuan distributed a substantial dividend. Its major shareholder is Fosun High Technology, which is 100% owned by Fosun International (00656.HK). Fosun Holdings holds a 72.77% stake in Fosun International. Ultimately, Tianyancha APP shows the actual controller is Fosun International Chairman and founder Guo Guangchang.
Bai Wenxi believes Yuyuan's large-scale asset剥离 is highly correlated with the overall funding pressure within the "Fosun" group. Fosun International CFO Gong Ping stated at the end of 2024 that Fosun had firmly pursued "streamlining" over the past four years, leading to an orderly reduction in debt levels. As the flagship platform for Fosun's "Happiness" sector, Yuyuan has undertaken significant asset disposal tasks. In 2022, the "Fosun" group reduced its stake in Yuyuan twice, realizing over 2.5 billion yuan (Zhejiang Qingzhan acquired a 5% stake at a 5% discount).
Yuyuan's core business performance has been weak in recent years, reporting net losses excluding non-recurring items of 451 million yuan in 2023 and 2.109 billion yuan in 2024. Net profit attributable to shareholders also fell sharply, to just 125 million yuan in 2024, a decrease of 93.81% year-on-year.
Before releasing the 4.8 billion yuan loss forecast in March 2025, Yuyuan announced its 2024 dividend: a cash dividend of 1.9 yuan per share (before tax). As of December 31, 2024, undistributed profits stood at 4.69 billion yuan. The cash dividend, totaling approximately 739 million yuan, was distributed on June 18, 2025. The "Fosun" group, as the controlling shareholder (holding 61.88%), received roughly 457 million yuan.
When questioned if the controlling shareholder's difficulties prompted the withdrawal of over 400 million yuan in cash from the listed company, Yuyuan stated it was not fully aware of Fosun's situation and characterized the dividend as a normal return to investors. It noted that despite the low 2024 net profit, it proceeded with the dividend to boost investor confidence, arguing it was better than distributing nothing.
Regarding whether Fosun International would continue coordinating "streamlining" efforts with Yuyuan, Fosun had not responded by the time of publication on February 12.
According to Bai Wenxi's analysis, from Guo Guangchang's perspective, Yuyuan, as a listed platform, provides cash flow to the group through asset sales and dividends.剥离 non-core assets from Yuyuan helps prevent risks from transferring to the group. The shift from "diversified expansion" to "focusing on core businesses" concentrates resources on Health, Happiness, and Wealth sectors, but Yuyuan's position is awkward—it is both the core carrier for Fosun's consumer industry and the group's "cash machine," creating a fundamental conflict between strategic autonomy and the group's funding needs. Yuyuan must be wary of the risks of routine剥离. If asset sales become a "regular operation," Yuyuan risks becoming an "asset shell company," losing its industrial foundation. The current stock price already reflects market concerns about potential "hollowing out."
Notably, Yuyuan has experienced frequent executive changes recently. In February 2024, Vice President Zhang Chi and Executive President Tang Jining resigned for "personal development reasons." In May 2024, Vice President Zhu Weihong resigned upon reaching retirement age. In July 2024, President Hu Tingzhou resigned for "personal reasons," with Yuyuan's announcement specifically noting "no disagreement with the company." On January 1, 2025, Executive President Ran Fei resigned due to "work adjustment," and on February 19, 2025, Vice President Zuo Mozhi resigned for "personal development reasons." Within 12 months, six senior executives resigned from Yuyuan.
Regarding whether Yuyuan's asset sales stem from its own needs or Fosun's thirst for liquidity, Bai Wenxi stated that both factors are intertwined, but group demand is dominant. Beyond Yuyuan's legitimate need to optimize its asset structure, the timing of Fosun's "streamlining" cycle highly synchronizes with Yuyuan's asset剥离, and the dividend policy clearly serves group cash flow. The frequent management changes also reflect strong group control over the listed company. If Yuyuan's decline continues, it would signal the failure of a key Fosun financing platform, damage the "Fosun" group's overall market image, and dismantle synergistic effects—Yuyuan's jewelry, catering, and tourism resources could have formed an ecological loop with Fosun's Health and Happiness sectors, but continued剥离 risks rendering the "Hive City" strategy nominal.
Jiang Han also believes Yuyuan's asset剥离 is highly协同 with Fosun's overall "deleveraging and liquidity preservation" strategy, reflecting its role as a core listed platform providing "blood transfusions." Guo Guangchang and Fosun are promoting a "investment-exit balance," transforming Yuyuan from an "investment vehicle" into an "industrial operation entity," requiring it to return to its consumer core business and reduce capital operation activities. This also reveals Fosun's expectation for Yuyuan: no longer pursuing scale expansion but building a stable, dividend-paying, anti-cyclical cash cow enterprise to support the group's overall debt resolution and strategic contraction.
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