Fosun's Strategic Pivot: How Business Streamlining Delivered 66% Profit Growth in H1 2023

After weathering significant headwinds in 2022, Fosun International demonstrated remarkable resilience in the first half of 2023. The conglomerate’s financial results, released on August 30, reveal a company that has successfully pivoted toward disciplined operations and sustainable growth through aggressive business streamlining.

The Numbers Tell the Story

Fosun’s total revenue reached RMB97.06 billion in H1 2023, marking a 10.9% year-on-year increase. More impressively, the company’s industrial operation profit—a key metric revealing core business performance—surged 66% to RMB3.37 billion (excluding disposed assets). This figure deserves particular attention: while overall revenue growth was steady, the dramatic acceleration in industrial operation profit signals that Fosun’s strategic refocus is working.

Profit attributable to shareholders stood at RMB1.36 billion, underscoring the company’s return to profitability after managing through liquidity pressures that had accumulated in 2022.

Business Streamlining: Debt Reduction as Foundation

The most compelling aspect of Fosun’s turnaround is its debt management strategy. Between June 2022 and June 2023, Fosun reduced total consolidated debt by RMB40.2 billion—a substantial deleveraging effort. Total debt dropped from RMB261.1 billion to RMB220.9 billion.

What’s particularly noteworthy: even after this reduction, the company maintained operational firepower. Cash and bank balances reached RMB114.68 billion as of June 30, 2023. The debt-to-capital ratio improved to 51.8%, while average debt costs held steady at 5.32%—a testament to the company’s continued access to competitive financing despite volatile global credit markets.

Fosun’s business streamlining approach included:

• Redemption of onshore bonds totaling RMB6.73 billion
• Settlement of over USD2.7 billion in offshore debt and syndicated loans
• Divestment of non-core assets generating over RMB20.0 billion in cash during H1 2023
• Securing new financing capacity, including a RMB12 billion syndicated loan from major state-owned banks and a USD500 million offshore facility

Where Growth is Concentrated

Fosun’s business streamlining strategy explicitly prioritizes four core subsidiaries: Yuyuan, Fosun Pharma, Fosun Insurance Portugal, and Fosun Tourism Group (FTG). These businesses generated RMB70.76 billion in combined revenue—73% of the group total.

Yuyuan delivered particularly strong returns: H1 2023 revenue climbed 21.86% to RMB27.44 billion, with net profit surging 225.83% to RMB2.218 billion. The company’s performance reflects robust domestic consumption recovery.

FTG turned a corner toward profitability. Revenue jumped 38.7% to RMB8.90 billion with net profit of RMB471.8 million—a meaningful milestone after previous operating losses.

Fosun Pharma generated RMB21.395 billion in revenue, with its Shanghai Henlius biopharmaceutical division becoming a breakout success story. Shanghai Henlius delivered RMB2.5005 billion in H1 revenue—a 93.9% year-on-year surge—and achieved profitability for the first time with RMB240 million in net profit.

The platform’s momentum stems from two blockbuster products: HANQUYOU (trastuzumab injection) and HANSIZHUANG (serplulimab injection) generated RMB1.2767 billion and RMB556.3 million respectively. HANQUYOU is undergoing FDA review for U.S. market approval and stands poised to become the first biosimilar approved across China, the U.S., and Europe simultaneously. HANSIZHUANG has already captured three indication approvals in China and holds the distinction of being the world’s first PD-1 monoclonal antibody for first-line extensive-stage small cell lung cancer treatment.

Global Operations Firing on All Cylinders

Fosun’s international business contributed RMB44.09 billion—45.4% of total revenue—reflecting a 60% compound annual growth rate over the past decade. Easun Technology saw new orders nearly double to RMB1.38 billion (up 131.2%), particularly in North America. Fosun Insurance Portugal expanded regional premium income substantially, with Peru and Bolivia operations generating RMB816 million and RMB200 million respectively.

The Innovation Engine

Despite aggressive business streamlining and debt reduction, Fosun increased technology and innovation spending by 20% to RMB4.2 billion in H1 2023. This investment discipline—cutting where necessary while doubling down on innovation—defines the company’s sustainable growth formula.

Chairman Guo Guangchang summarized the strategy at the interim results presentation: “Development is the key solution to all issues.” By focusing on businesses with clear competitive advantages and maintaining innovation momentum, Fosun is positioning itself to capture value across its concentrated portfolio as economic recovery accelerates.

The second half of 2023 will test whether this transformation sustains. Market observers will watch whether Fosun can maintain industrial profit momentum while continuing its debt reduction trajectory—a balancing act that will define the next phase of the company’s evolution.