Fosun International announces a strategic shift to concentrate on industries where it has a competitive advantage, aiming for sustainability and growth in a fluctuating global economy.
In a strategic shift that underscores the importance of playing to one’s strengths amid fluctuating global economic conditions, Fosun International has announced its intention to double down on industries where the conglomerate has established advantages. The statement was made during the 2023 annual results conference held on March 28, 2024, by Fosun International’s chairman, Guo Guangchang.
Fosun, a Shanghai-headquartered global enterprise known for its diverse holdings spanning healthcare, real estate, finance, and more, reported a total revenue of RMB 198.2 billion for the year, with profits attributable to owners of the parent company reaching RMB 1.38 billion. This financial accomplishment comes at a time when the company is keenly focusing on implementing a core business-strategy that emphasizes steady development and improving operational capabilities in its advantageous industries.
The directive towards concentrating on ‘deep mining’ and ‘developing good mines’ represents a significant strategic pivot from the conglomerate’s previous approach of widespread prospecting across various industries and locations worldwide. This refocus on leveraging existing strengths highlights Fosun’s commitment to sustainability and judicious growth, particularly in sectors where it holds a competitive edge.
Chairman Guo, along with Co-Chairman Wang Qunbin, Co-CEOs Chen Qiyu and Xu Xiaoliang, as well as CFO Gong Ping, collectively delved into discussions addressing the company’s strategies, performance, and investment in innovation and technology. They also elaborated on Fosun’s global operations in response to investors’ queries, portraying a company that is not only expanding but also evolving in its practices.
The emphasis on technology innovation was evident, as highlighted by Co-CEO Chen Qiyu’s remarks about Shanghai Henlius’s approach to product management and the role of technology innovation in buttressing sustainable profitability. This focus indicates Fosun’s recognition of the paramount importance of advancing technology and innovation as key differentiators in the global marketplace.
Significantly, Fosun’s drive towards an ‘asset-light’ strategy, as articulated by Guo Guangchang and Wang Qunbin, underscores a strategic shift geared towards optimizing profitability and enhancing operational efficiency. By divesting non-strategic and non-core assets and focusing more on sectors with sustainable growth and cash flow, Fosun aims to upgrade its rating to “investment grade” by the international credit agency S&P.
Financially, Fosun has sharpened its focus on maintaining a balanced financial portfolio and diverse financing methods to support its industry-specific growth strategies. This comes alongside the strategic goal of reducing liabilities and adhering to an operational approach that prioritizes industry funds development to support its expansion.
The global perspective presented, particularly in Co-CEO Xu Xiaoliang’s reflections on Fosun’s second stage of globalization, points to a strategic sophistication in developing operational opportunities. Moving from viewing the world from China to viewing it globally suggests a nuanced understanding of the marketplace and a readiness to leverage global operations for sustainable business growth.
Fosun’s 2023 performance and strategic realignment underscore a deliberate and calculated approach towards business operation in the ever-volatile global economic landscape. The emphasis on focusing on core industries, technological innovation, an asset-light strategy, and global operational enhancement highlights Fosun’s commitment to not just surviving but thriving through adaptability, foresight, and a keen understanding of its inherent strengths.