Fosun Group

For Fosun’s founder, ‘happiness’ is in owning one of China’s biggest dating websites

PUBLISHED : Saturday, 05 May, 2018, 9:03am
UPDATED : Saturday, 05 May, 2018, 1:51pm

Chinese billionaire Guo Guangchang who controls acquisitive conglomerate Fosun Group plans to spend 4 billion yuan (US$630 million) to buy a controlling stake in dating service provider Baihe Network, charting a new course into the online matchmaking business.

Guo, 51, has agreed with 32 shareholders to buy 869 million shares, or a 69.2 per cent stake, at 4.6 yuan apiece, according to a statement published by Baihe on Thursday.

The billionaire will conduct the buyout through Ningbo-based Yuanhong Investment, a firm that is wholly owned by Guo.

Baihe, one of the mainland’s largest dating sites, is traded on the Beijing’s National Equities Exchange and Quotations, or “new third board”, an over-the-counter equity exchange slated for technology start-ups.

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“Yuanhong aims to chase high-growth opportunities in new economy businesses related to the internet,” Guo’s company said in a statement. “After the acquisition, the company expects to profit from the further growth of Baihe.”

In 2017 Baihe posted a net profit of 65 million yuan, reversing from a loss of 114 million yuan a year earlier.

The company’s services span online and offline dating, consulting and event organising, including wedding planning.

In 2015, Baihe acquired and privatised Nasdaq-listed International, one of its major rivals.

“Compared to e-commerce and e-payment, online dating is a market that has yet to be fully tapped,” said Cao Hua, a partner at private equity group Unity Asset Management. “The number of registered users appears to be huge and online matchmaking has the potential to grow.”

Baihe has 310 million registered users and 200 outlets that offer dating services.

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The transaction is subject to approval by regulators.

Fosun has evolved from a developer and health care provider into an investment conglomerate with businesses covering retail, finance, steel, tourism, entertainment and pharmaceuticals. It organises its sprawling businesses under the themes of wealth, health and happiness. “Wealth” covers Fosun’s insurance and wealth management operations, “health” comprises pharmaceutical products, healthcare, while “Happiness” includes resorts under the Club Mediterranee brand, the Atlantis resort in Hainan and a stake in Cirque du Soleil, among other investments.

Since 2010, the Shanghai-based company has been on a global asset shopping spree, acquiring Portugal’s largest insurance group Fidelidade, French luxury resort operator Club Med, a 9.5 per cent stake in jewellery and fashion accessories brand Folli Follie, and a minority stake in entertainment company Cirque du Soleil.

The rising spending power among Chinese consumers has also drawn a spotlight on opportunities related to consumption.

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Last year, Fosun bought 18 per cent of Tsingtao Brewery for US$844 million.

Meanwhile, Baihes’ revenue surged 258 per cent to reach 671 million yuan in 2017.

Based on the acquisition by Fosun, Baihe is valued at US$910 million.

The company is a potential unicorn, or privately held technology company with valuation of at least US$1 billion.