Fosun Group

China’s Fosun shrugs off trade war to continue the hunt for overseas deals, says chairman Guo Guangchang

PUBLISHED : Wednesday, 29 August, 2018, 3:02pm
UPDATED : Wednesday, 29 August, 2018, 10:58pm

Fosun International says it still has overseas acquisitions in its sights after it emerged from regulators’ scrutiny over debt-fuelled shopping abroad by Chinese conglomerates.

It will continue to hunt for deals in the US, Europe and Africa to expand its global footprint despite the worsening US-China trade war, its chairman said on Wednesday.

One of China’s most prolific overseas buyers, Fosun has kept its buying spree going this year even though a national crackdown on “irrational” overseas acquisitions has left most of its peers busy offloading their foreign assets.

“We believe our investments in the US will still be welcome, and we have seen more investment opportunities in Europe,” billionaire tycoon Guo Guangchang, who co-founded the company, told a press conference.

Fosun resumes its overseas shopping spree with US$52m purchase of Brazil asset manager

India and countries in Africa were also welcoming Fosun’s technology and investment.

Guo said he “trusted the wisdom of the Chinese and US leadership” to resolve their trade conflict.

Shanghai-based Fosun owns the French holiday resort chain Club Med, and 25 per cent of the world’s largest theatrical producer, Cirque du Soleil.

It has acquired a number of overseas assets this year, including stakes in European fashion brands Lanvin and Wolford, despite coming under intense scrutiny from the government as it cracked down on debt-fuelled foreign shopping sprees by Chinese conglomerates.

Firms including Dalian Wanda Group and HNA Group found themselves under the regulatory spotlight and have been busy offloading overseas assets to comply with Beijing’s guidelines.

Meanwhile, Fosun plans to spin off more business segments and list them in Hong Kong. It recently received approval from the bourse operator to float its Fosun Tourism and Culture Group unit, and has filed for an initial public offering for online parenting firm, Babytree Group, in which it owns a 25 per cent stake.

“We hope we will present more unicorn-style, high-growth businesses to the capital market in Hong Kong and elsewhere,” said Chen Qiyu, executive director and co-president of the company.

Hong Kong’s market had become more attractive since the stock exchange reformed its listing rules to accommodate technology and biopharma firms, Chen said.

Guo and Chen were speaking after Fosun posted a 17 per cent rise in first-half profit on the back of strong growth in its health care, tourism and fashion segments.

Net profit rose to 6.9 billion yuan (US$1 billion) for the first six months of this year from 5.9 billion yuan in the same period of 2017, while revenue was up 20 per cent to 43.5 billion yuan.

Shares of the firm had fallen 1.5 per cent to HK$14.32 as of 1:10pm on Wednesday after the results announcement.