Fosun International's Guo Guangchang apologizes for company losses: it is not due to deterioration of the fundamental business conditions

On March 30th, Fosun International (00656.HK) released its 2025 annual financial report, after which Chairman Guo Guangchang sent a letter to shareholders for 2026.

The letter stated that in 2025, the company recorded a loss attributable to shareholders of the parent company of 23.4 billion RMB. It is important to note that this loss is not due to a deterioration in operational fundamentals, but mainly results from non-cash impairment provisions made by the board of directors out of prudence for certain projects during the company’s past development; it also involves impairments of goodwill and intangible assets in some non-core business segments. These provisions will not affect the company’s daily operations, cash flow, or business activities, and core businesses such as pharmaceuticals and insurance continue to grow steadily.

Guo Guangchang apologized in the letter for the loss. “Losses are never good, and such performance is unprecedented in Fosun’s over thirty years of development. Although the loss is mainly a non-cash expense, failing to meet profit expectations is disappointing. As the company’s chairman and founder, I want to express my deep apologies to all shareholders and partners who care about Fosun’s development,” he wrote.

On the same day, Fosun International announced its performance for the 12 months ending December 31, 2025. The financial report showed that in 2025, Fosun’s total revenue reached 173.4 billion RMB, down 9.74% year-over-year; net profit attributable to the parent was a loss of 23.4B RMB, a sharp decline of 437.97% year-over-year.

Guo Guangchang stated that Fosun has been particularly brave in the past, trying many approaches, some successful, some not, and overall paying a lot of tuition. In recent years, China’s real estate industry has faced macro structural adjustments. Although real estate accounts for a small proportion of Fosun’s business, market and investor concerns remain: has Fosun’s real estate projects faced no challenges or pressures? With so many investment projects in Fosun’s history, were they all smooth sailing? Of course, the answer is not that simple. Looking back, some of our past projects indeed deviate from their initial value due to current market conditions and initial investment assumptions. Therefore, the board has prudently decided to complete this asset impairment, allowing Fosun to better concentrate resources and efforts on high-growth core sectors. Currently, amid global economic fluctuations and emerging opportunities, as well as China’s emerging industries, deepening our layout now can optimize asset structure, secure industry advantages, and make Fosun lighter, healthier, and more sustainable.

During the reporting period, Fosun continued to promote its “streamlining and focusing on core businesses” strategy. Guo Guangchang described this proactive impairment as “a sunny day roof repair”: “Some of our past projects indeed deviate from their initial value due to current market conditions and initial investment assumptions. Therefore, the board has prudently decided to complete this asset impairment, enabling Fosun to better focus resources and efforts on high-growth core sectors.” Among these, approximately 55% of impairments relate to real estate, and about 45% relate to non-core assets.

From an operational perspective, in 2025, Fosun’s four core subsidiaries—Fosun Pharma, Yuyuan Shares, Fosun Portugal Insurance, and Fosun Tourism—achieved a total revenue of 128.2 billion RMB, accounting for an increased 3% of the group’s total revenue, reaching 74%.

The company continued to advance its “dual engines” of innovation and globalization. Since its listing on the Hong Kong Stock Exchange in 2007, Fosun has promoted globalization, with overseas revenue reaching 94.86 billion RMB, accounting for 54.7% of total revenue, an increase of 5.4% year-over-year.

In pharmaceutical innovation, Fosun began systematically布局医药研发 in 2006. During the reporting period, Fosun Pharma obtained approval for 16 indications across 7 innovative drugs domestically and internationally, with 6 innovative drug applications accepted. Notably, its self-developed small-molecule innovative drug, Fumainin (Luwometein tablets), received approval for dual indications in China, filling a domestic gap in rare tumor treatments.

During the period, Fosun Pharma’s innovative drug revenue reached 6.67B RMB, up 29.59% year-over-year, increasing its share of the pharmaceutical business to 33.16%. Fosun Hanlin achieved revenue of 6.667 billion RMB and net profit of 827 million RMB, maintaining growth in both revenue and profit for three consecutive years.

In the insurance sector, Fosun’s domestic and international insurance companies experienced comprehensive growth. Fosun Portugal Insurance’s gross written premiums for the year totaled 6.53 billion euros, with net profit attributable to the parent of 201 million euros, up 15.8%. Among domestic insurers, Fosun Prudential Life’s annual premiums reached 13.28 billion RMB, a 41.6% increase; net profit was 650 million RMB, a 492% increase. Fosun United Health Insurance’s annual insurance revenue was 7.84 billion RMB, up 50.1%, with a net profit of 139 million RMB, marking five consecutive years of profitability.

In consumer and tourism, Yuyuan Shares’ restaurant brand Songhe Lou opened its first overseas store in London, UK, and the jewelry brand Lao Miao opened its first store in Kuala Lumpur, Malaysia. Fosun Tourism’s Club Med operates in over 40 countries and regions across six continents, with 67 resorts. During the reporting period, Club Med’s revenue hit a record high of 17.97 billion RMB, up 2.1%; the global average occupancy rate reached 75.8%, up 1.8%. Domestic “all-inclusive” resorts during the Spring Festival holiday saw an average occupancy rate of 90%; Sanya Atlantis’ nine-day total revenue during the Spring Festival exceeded 124 million RMB, a 20% increase, setting a new record for Spring Festival performance.

Regarding the hottest AI topics today, Guo Guangchang revealed, “We’ve been paying attention for the past few years”: “But we’re not chasing the concept of large models. AI isn’t just for decoration; I care whether AI can solve real problems. To make AI truly a tool for our work, we need to maximize efficiency.”

Guo Guangchang also shared Fosun’s mid-term financial goals: striving to gradually restore a profit scale of 10 billion RMB; aiming to recover 60 billion RMB in funds; and reducing the group’s total debt to below 60 billion RMB, with the goal of achieving an “investment-grade” rating.

As of the time of this report, Fosun International’s stock price was HKD 4.14, up 2.48%, with a market capitalization of HKD 33.81 billion.

Editor | Zhang Jinhua, Du Bo

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