Fosun International (HKG:0656) faces reduced credit buffers due to an asset write-down, S&P Global Ratings said in a Wednesday release.
The investment holding company released a profit warning for an expected consolidated loss of between 21.5 billion yuan and 23.5 billion yuan for 2025, with a non-cash asset provision being the main loss factor.
S&P views the company as having resources to support liquidity in the next quarters following the non-cash loss.
However, the company may still carry out further asset sales as part of its debt reduction efforts amid China's weak property market, reduced consumer spending, and geopolitical tensions, S&P said.
Some of the company's property and consumption-linked investee companies have suffered from sector constraints and are exposed to valuation pressure due to limited visibility on their sectors' recovery, the rating agency said.
S&P sees gains of more than 10 billion yuan in the valuation of holdings in Hainan Mining (SHA:601969) and Banco Comercial Português could partly offset the write-off, with the rating agency's 45% rating threshold capable of tolerating about a 20% portfolio value drop.
Material non-core listed assets and the credit profile of the company's regulated financial service holdings counterbalance contagion risk, S&P said.
The Middle East conflict also has a limited direct impact on the company given its small exposure to the region, although increased tensions could weaken access to capital, the rating agency said.
The company's credit profile will depend on its investees' capacity to weather pressure in their respective sectors and its own ability to handle asset sales as part of its debt reduction plans, S&P said.
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