Guo Guangchang's Sacrifice and Gains

Ask AI · How do economic shifts drive Guo Guangchang to reshape Fosun’s strategy?

“There’s a saying: cut, let go, detach. That’s the normal state of life… Maintaining a clear, calm mind and appreciating the wisdom of ‘letting go’—I think that’s the right mindset for us, and it’s also a lifelong practice.”

On March 17, at the Yabuli China Entrepreneurs Forum dinner, Guo Guangchang, who toasted with the spirit of ‘letting go,’ talked about ‘cutting, letting go, and detaching,’ and about life being the wisdom of ‘letting go.’

This is his genuine feeling and true experience. Over the past few years, he and Fosun International have been practicing this ‘letting go’ and ‘gaining.’

Before 2020, Guo Guangchang and Fosun mainly focused on ‘gaining.’ The company went public domestically and in Hong Kong, gained capital, and used capital to drive industries like pharmaceuticals, steel, mining, real estate, insurance, culture and tourism, and consumer sectors—becoming one of China’s largest diversified private enterprises. He was also seen as a representative of the ‘92 faction’…

During the era of loose credit, low interest rates, and abundant opportunities for high growth, ‘gaining’ was also a gift of the times.

But starting in 2020, the environment changed dramatically, not only due to economic cycles but also because of fundamental logical shifts. China’s economic transformation and upgrading entered a pain period unlike any in decades. The more successful companies in the past, the more intense their pain often was.

Under the transformation of new and old kinetic energy, how to ‘let go’ of the old and ‘gain’ the new has become the main theme of the era. Fosun, with its large scale and broad footprint, faces even greater challenges and tests in ‘letting go’ and ‘gaining.’

A prominent Chinese business magnate, who nearly fell during the Asian financial crisis, once lamented to me that the most important ability for entrepreneurs to build lasting enterprises is to find opportunities in crises, even turn crises into opportunities. He said that he was both painfully and luckily fortunate to have encountered that storm.

“Although the process was painful, losing hands and feet, it prompted us to deeply reflect on reality—such as focusing investments on small-scale but high-risk regions, and then pouring all efforts into China, catching the country’s biggest opportunity in recent decades.”

Guo Guangchang’s ‘letting go’ and ‘gaining’ over the past few years are not as extreme, but they are similar in essence. Amid the enormous test he calls the ‘perfect storm,’ Fosun, which is already adjusting its strategy, focusing on core sectors, and deepening industry cultivation, has turned the challenge into an opportunity to accelerate transformation and upgrade, undertaking a series of major ‘lettings go’ and ‘gains.’

In just a few years, Fosun has exited assets and businesses, raising about 75 billion yuan. In March this year, it announced a one-time impairment of over 20 billion yuan on real estate and non-core assets, thoroughly shedding past burdens. While the outside world often only sees its large ‘letting go,’ Fosun is also achieving big ‘gains’ amid the process. ‘Letting go’ of the old Fosun, and ‘gaining’ a new Fosun. After years of ‘letting go,’ Fosun:

On one hand, solidifies its foundation. For example, supporting Portugal’s leading insurance company, which contributes hundreds of millions of euros in net profit annually, and expanding into international markets; making Club Med, a global leisure resort benchmark, more profitable through light-asset operations; and strengthening the resource endowment of HALO assets like Hainan Mining, which is being revalued globally.

On the other hand, raising the ceiling higher. For example, investing over 5 billion yuan annually in R&D to make innovative drugs a growth trump card. Currently, Fosun’s pharmaceutical companies have achieved a cumulative high-value BD deal of up to $9 billion with international firms like Pfizer, and possess a series of promising products like PD-L1 ADC HLX43, HLX22 (a new HER2 antibody), HLX07 (an innovative anti-EGFR), with potential market value exceeding $30 billion. Success of any of these drugs could generate profits beyond what Fosun has seen in decades.

Of course, being able to ‘let go’ and create a new Fosun also relies on prior foresight and development. A few days ago, I discussed Li Ka-shing’s ‘Always have a trump card, so even if the sky falls, you can still make money’ in ‘Li Ka-shing: Oil Can Rival Countries.’ Insurance and pharmaceuticals are Guo Guangchang’s trump cards for making money even if the sky falls. These come not only from recent ‘letting go’ but also from decades of steadfastness and increased investment.

This is also the fundamental reason why Guo Guangchang can still chat happily with entrepreneurs over drinks, sharing his journey and insights.

Many things are dialectical—yesterday’s ‘gain’ may be the foundation for today’s ‘letting go,’ and today’s ‘letting go’ may become tomorrow’s ‘gain.’

Guo Guangchang often says he hopes everyone lives to 121 years old. His relative, Malaysia’s 103-year-old billionaire Guo Hnian, has long said that in modern society, 60 is just the prime of life.

Whether based on the hope of living to 121 or Guo Hnian’s view that 60 is just the real youth, Guo Guangchang, at 60 virtual age this year, is still in his prime. For Fosun, at 34, he is even more youthful.

Years from now, Guo Guangchang may also thank this ‘youthful’ period of ‘letting go.’ In fact, there’s a sense of destiny—before this major ‘letting go,’ he bought ‘Letting Go’ wine, seemingly foreshadowing his own big ‘cutting and shedding.’

There are no smooth-sailing companies or lives in this world. Even ordinary people caught in major changes face the test of ‘letting go’ and ‘gaining.’

Old tickets won’t board new ships; only those who can ‘let go’ and ‘gain’ can keep their Ferrari, even as it ages, and stay in step with the times.