Fosun International's Retreat and Advancement: A Loss of 23.4 Billion, Guo Guangchang Apologizes "Losses Are Always Unfavorable, Unprecedented in 30 Years," Driving the Recovery to a Hundred-Billion Profit Scale

Fosun International (00656.HK), led for a time by “China’s Buffett” Guo Guangchang, once had a strong appetite for “buying, buying, buying.” It aggressively acquired assets in both domestic and overseas markets and built four business segments: Health, Happiness, Affluence, and Smart Manufacturing. But in recent years, as the market environment has changed, the “aftereffects of expansion” at Fosun International have begun to show.

Hongxing Capital Bureau noted that on the evening of March 30, Fosun International released its 2025 annual report. For the full year, revenue came in at RMB 173.43B, down 9.74% year over year; attributable net profit was RMB -23.4B, with losses widening 437.86% year over year—already exceeding the total profits from the previous five years. The losses mainly stemmed from the company making one-time impairment provisions for certain real estate and non-core assets. In his letter to shareholders, Guo Guangchang said, “The board has prudently selected the completion of this round of asset write-down, so that Fosun can better concentrate resources and focus its efforts, and invest in high-growth core tracks.”

Picture from Visual China

This means Fosun International will put down its burdens and move forward with a lighter load. Worth noting is that while it is “exiting,” Fosun International is also taking “entering” steps. Over the past year, its core industries—including pharmaceuticals, insurance, and cultural tourism—have performed strongly.

As of the close on April 1, Fosun International was at HK$4.28 per share, up 3.38%, with a total market capitalization of HK$34.9 billion. Compared with the stage low after the company released its performance preannouncement on March 6, the stock price has rebounded to nearly 20%.

After the massive loss, an apology:

Guo Guangchang said “concentrated cleanup of historical old accounts”

As in previous years, after the financial report was released, Chairman Guo Guangchang issued a letter to shareholders. In the letter, he apologized and said, “Losses are always not good. Such performance is also unprecedented in Fosun’s more than thirty years of development.” He also explained the reasons for the loss: it was not due to deterioration in underlying business fundamentals; rather, it resulted from the board, based on prudent principles, making non-cash impairment provisions for some projects in the company’s past development process, as well as impairments of goodwill and intangible assets in some non-core business segments.

Specifically, the large impairment in the real estate segment is the primary source of this loss. The annual report stated that in 2025, the downturn cycle in the real estate industry continued, market demand was soft, and the real estate business faced pressure. The company made large asset impairment provisions for certain real estate projects with indications of impairment, accounting for about 55%.

Looking back, during the golden period of the real estate industry, Guo Guangchang launched major initiatives and acquired many high-priced land parcels and projects. Taking Shanghai—where big shots gathered—as an example, well-known projects such as the Bund 8-1 land parcel and the Fu You land parcel, located close to bustling business districts, all had Guo Guangchang as one of the “laughing last.” Now that the industry has entered a deep adjustment period, Fosun International said it will dynamically adjust its operating and sales strategies in accordance with market conditions, actively seize opportunities, increase efforts in marketing and destocking, and accelerate the return of funds.

The second-largest source of losses is the impairment of goodwill and intangible assets in non-core businesses, accounting for about 45%, directly targeting the expansion model of Fosun’s past “buying, buying, buying.”

Guo Guangchang founded Fosun International in 1992, and it has now been 34 years. Before 2022, the “Fosun Group” covered fields including pharmaceuticals, real estate, consumer goods, and finance through globalization, diversified acquisitions, and industrial operations. At its peak, the “Fosun Group” had as many as 19 listed companies. The core platform, Fosun International, had asset scale in the summit period at one point approaching RMB 850 billion, which is also why Guo Guangchang was dubbed “China’s Buffett.”

But behind the large-scale acquisitions, Fosun International’s goodwill continued to surge. At the end of 2011, the company’s goodwill balance was only about RMB 1.66 billion; by the end of 2023, it had soared to nearly RMB 30 billion. With changes in the market environment, the diversified expansion failed to produce the expected synergy and value-add. Guo Guangchang had to lead Fosun onto the path of “selling, selling, selling” again.

Starting in 2022, Fosun International clearly proposed “focusing on the main business and simplifying the investment portfolio,” and repeatedly raised cash by disposing of assets. Just in the capital markets, the “Fosun Group” reduced holdings of stocks including Jinhuijiu (603919.SH), Hainan Mining (601969.SH), Zhongshan Public (000685.SZ), Taihe Technology (300801.SZ), and Sanyuan Shares (600429.SH). It even included core assets such as Fosun Pharma (600196.SH; 2196.HK) and Yuyuan Co., Ltd. (600655.SH).

According to disclosures by Fosun International, from 2022 to 2024 it cumulatively completed asset exits of about RMB 75 billion, and in 2025 it completed exits of more than RMB 17 billion equivalent, among other figures.

One-time impairment provisions and value re-measurements can be seen as a centralized cleanup of historical old accounts. Guo Guangchang likened it to “fixing the roof on a sunny day.” He concluded, “When we look back, some of the projects we previously deployed indeed deviate from the value we had when we first invested, given the current market conditions. Therefore, the board prudently chose to complete this round of asset impairment write-downs, so Fosun can better concentrate resources and focus its efforts, and invest in high-growth core tracks.”

Core business upward against the tide:

Pharmaceuticals and insurance perform well

Hongxing Capital Bureau noted that while Fosun International is “exiting,” it is also taking “entering” actions.

Fosun International’s main businesses are divided into four segments: Health, Happiness, Affluence, and Smart Manufacturing, covering four core enterprises—Fosun Pharma, Yuyuan Co., Ltd., Fosun Portugal Insurance, and Fosun Tourism & Culture. In 2025, the four core enterprises’ total revenue reached RMB 128.24 billion, accounting for 74% of total revenue. Excluding the impact of Yuyuan, revenue increased 3% year over year.

Screenshot from Fosun International’s 2025 annual report

Within the Health segment, Fosun Pharma achieved revenue of RMB 41.66B for the full year, up 1.45% year over year. Of this, revenue from innovative drugs was RMB 9.8933 billion, up 29.59%, and its share of pharmaceutical business revenue increased to 33.16%. Attributable net profit was RMB 3.3711 billion, up 21.69% year over year. Fosun Pharma’s subsidiary Simcere Himlin (2696.HK) achieved revenue of RMB 6.67B and net profit of RMB 827 million, delivering double-digit growth in both revenue and profit for three consecutive years.

The pharmaceutical industry is where Guo Guangchang’s “Fosun Group” started, and also an important core asset. In 2025, among the company’s 7 innovative drugs with 16 indications, approvals were granted for marketing both in China and overseas. Applications for 6 innovative drugs were also accepted for review. Among them, the self-developed small-molecule innovative drug Fametamine (Ilovimotene tablets) received approval for dual indications in China, filling a gap in the treatment of rare tumors domestically. Fosun Pharma’s total upfront payment received from external licensing during the year exceeded USD 260 million, and the total potential milestone payments exceeded USD 3.8 billion.

Within the Happiness segment, the core enterprises are Yuyuan Co., Ltd. and Fosun Tourism & Culture. Among them, Yuyuan Co., Ltd. also made impairment provisions for non-core projects and real estate projects. In 2025, its attributable net profit was RMB -4.9B, marking the first annual loss since it listed in 1992. Facing short-term pressure, Yuyuan Co., Ltd. is also accelerating product innovation and channel optimization. Its dining brand Songhe Lou opened its first overseas outlet in London, the United Kingdom, and its jewelry brand Lao Miao opened its first overseas store in Kuala Lumpur, Malaysia.

Fosun Tourism & Culture, meanwhile, completed privatization in 2025, delisting from the Hong Kong Stock Exchange. For the full year, tourism operations revenue reached RMB 19.94 billion, up 2.3% year over year. Revenue reached RMB 17.76 billion, up 4.4% year over year. Adjusted EBITDA reached RMB 3.61 billion, up 1.4% year over year. Benefiting from the continued improvement of global operational capabilities, Fosun Tourism & Culture’s Club Med posted another record high performance, achieving revenue of RMB 17.97B, up 2.1% from 2024.

The Affluence segment is mainly driven by its insurance business, with total revenue of RMB 55.86 billion. Among them, Fosun Portugal Insurance, acquired by Fosun in 2014, has deepened its efforts in the local market while also expanding into regions beyond Portugal, including Europe, Latin America, and Africa. In 2025, Fosun Portugal Insurance achieved attributable net profit of approximately EUR 201 million, up 15.8% year over year. International business accounts for more than 30% of the consolidated total business scale.

Two domestic insurance companies also performed strongly. Fosun United Health Insurance’s 2025 insurance business revenue reached RMB 7.84 billion, up 50.1%. It achieved net profit of RMB 139 million for the year, maintaining profitability for five consecutive years. Fosun Prudential Life Insurance’s 2025 premium scale reached RMB 13.28 billion, up 41.6%, achieving net profit of RMB 650 million, up sharply 492% year over year.

Fosun International also mentioned that globalization has always been one of the strategies the company has adhered to. In 2025, overseas revenue reached RMB 94.86 billion, increasing its share of total revenue from 49.3% in the same period of 2024 to 54.7%.

Behind the rebound in the share price:

Restoring the “RMB 832M profit scale” is a long road

Judging from market performance, since Fosun International released its 2025 annual performance preannouncement on March 6, its share price has rebounded by nearly 20%. Its “one-off risk cleanup” measures may have been recognized by the market.

In its financial report, Fosun International stated that this impairment was a phase of asset value optimization during the execution of its strategy. It does not affect the stability of core business operations and operating cash flows, strengthens the financial base, and clears obstacles for the Group to move forward with a lighter load and focus on high-quality development.

To boost investor confidence, since March 2, Fosun International has successively announced increasing its share buyback efforts, that controlling shareholders and executives would increase their holdings, and increasing dividend payments. On the evening of March 30, the company announced a plan to raise the target payout ratio for 2026 from the current 20% to 35%, and expects that 2026 dividends will not be less than HK$1.5 billion.

Guo Guangchang also set out the medium-term financial objectives plan for Fosun International: to strive to gradually restore its RMB 1.38B profit scale. At the group level, it aims to repatriate RMB 60 billion in funds, bring the group’s total liabilities below RMB 60 billion, and strive to achieve an investment-grade rating. “For the future of Fosun, we won’t compete for quick gains in the moment; we will build a long-lasting foundation.”

Guo Guangchang Picture from ICphoto

Although trends in core industries are upward, achieving a RMB 10 billion profit scale may not be easy for Fosun International.

From 2021 to 2024, Fosun International recorded operating revenue of RMB 161.3 billion, RMB 182.4 billion, RMB 198.2 billion, and RMB 192.1 billion, respectively. Attributable net profit was RMB 10.08 billion, RMB -61.09B, RMB 45.25B, and RMB -4.349 billion, respectively—profit scale has fluctuated significantly.

The debt issues of the “Fosun Group” have also long been a focus of market attention. As of the end of 2025, Fosun International’s total debt was RMB 224.19 billion, up from RMB 214.1 billion at the end of 2024. The proportion of medium- and long-term debt increased to 53.5%. Cash and bank balances and time deposits were RMB 61.092 billion, down RMB 45.247 billion year over year.

Hongxing Capital Bureau’s review found that since 2026, the “Fosun Group” has continued to sell assets such as Shanhe Pharmaceutical Auxiliary (300452.SZ) equity, the Caruso menswear brand, and the equity of Chongqing Rural Commercial Bank (3618.HK), among others.

To optimize its capital structure, Fosun International recently announced plans to spin off and list independently on the Shanghai Stock Exchange a well-known cultural tourism asset it holds—the Sanya · Atlantis project—through a real estate investment trust (REITs) structure under commercial real estate. Guo Guangchang also said that it is planning to spin off its vaccine business platform, Fosun Antengjin, for a listing in Hong Kong.

To truly move forward with a lighter load, Fosun International may still need time.

(This article does not constitute any investment advice; risks taken based on it shall be borne by the reader.)

Reporter: Jiang Ziw en

Editors: Tao Yueyang, Xiao Ziqi

Hongxing Capital Bureau Original

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