Huasheng Capital, a private equity fund established by China Renaissance Partners, has led a RMB6 billion (US$926 million) series B round in Lianjia, a Chinese O2O (online-to-offline) real estate agency service provider.
Lianjia, a Chinese O2O real estate agency service firm backed by Huasheng Capital, Tencent Holdings Ltd. and Hillhouse Capital, is preparing for an initial public offering in China, Hong Kong or the U.S., according to an article published by Jiemian.com.
Huasheng Capital, a venture capital unit of local investment banking firm China Renaissance Partners, CoBuilder Partners and an unnamed Chinese insurer have led a US$235 million series C round investment in Fenqile, a Shenzhen-based installment payment e-commerce platform targeting young Chinese consumers.
HONG KONG, Aug. 31, 2016 /PRNewswire/ — Fosun International Limited (which, together with its subsidiaries, is collectively referred to as "Fosun" or the "Group", SEHK stock code: 00656) today announced its interim results for the first half of 2016. As at 30 June 2016, Fosun’s total assets amounted to RMB437.71 billion, up 7.4% year on year. Net assets attributable to owners of the parent reached RMB82.66 billion, up 9.1% year on year. In the first half of 2016, Fosun recognized revenue of RMB32.50 billion, up 9.3% compared to that in the corresponding period of 2015. Net profit attributable to owners of the parent was RMB4.39 billion, up 21.4% year on year.
Adhering to its "insurance + investment" twin-driver core strategy, Fosun made further progress at liability and asset ends and further optimized its debt structure in the first half of 2016. Fosun deepened its footholds at the segmented insurance markets, embraced internet proactively, continued to explore investment opportunities in the field of C2M (Customer to Maker) and kept seeking opportunities for investment in emerging markets with potential for high growth. Thanks to robust growth as reflected by a number of performance indicators such as revenue, profit and scale of assets, Fosun International Limited became one of the top 500 listed companies for the first time based on the list released by Forbes and ranked 434th globally and 47th among Chinese enterprises.
Secure and more stable operation
In the first half of 2016, the Group’s operation was obviously more stable. On one hand, Fosun improved its debt structure proactively, with medium-term and long-term debt ratio increasing from 57.4% at the end of 2015 to 66.4% as at 30 June 2016. On the other hand, the Group took advantage of the low interest rate in China by issuing a total of RMB47.3 billion worth of medium-term and long-term debts with the approval from the relevant authorities. In 2016, RMB23.12 billion worth of medium-term and long-term bonds was issued. The Group replaced the old debts of shorter duration and higher interest rates with new debts. Average cost ratio of the newly issued debts was 3.85%, which was remarkably lower than 4.65%, the average cost ratio of existing interest-bearing debts. The Group’s net assets continued to grow at an average CAGR of 42.02% from 2004 to the first half of 2016, which greatly helped to improve the company’s gearing ratio consistently. Meanwhile, the Group’s liquidity continued to improve, with highly liquid assets reaching RMB150.62 billion, up by 16.2% from the end of 2015. Fosun kept facilitating its subsidiaries and invested enterprises to tap the capital market for fund: In the first half of 2016, the major asset restructuring of BOCOM Smart Network Technologies and Beibu Gulf Tourism invested by Fosun Capital were approved by China Securities Regulatory Commission ("CSRC"). Two invested companies were successfully listed on the National Equities Exchange and Quotations (NEEQ). Fosun Pharma’s issuance of no more than 100 million new A shares was approved by CSRC in July this year.
In the first half of 2016, the Group was also active in cashing out its investments in big projects: Fosun exited its investment in Youku for a total of US$249 million. Fosun exited its investment in BHF, a private bank in Germany, for a total of EUR218 million while releasing EUR589 million worth of deposit. The Group also exited its investment in Lianjia Property for a total of RMB560 million.
Integrated financial capability continued to improve
In the first half of 2016, Fosun Group further strengthened its integrated financial capability. Total assets of the Group’s integrated financial business segment reached RMB276.87 billion, up 16.7% from the end of 2015. Profit attributable to owners of the parent amounted to RMB3.98 billion, up 13.7% year on year. Investable assets of the insurance business segment reached RMB164.58 billion, up 2.61% from the end of 2015. Thanks to the low interest rates and stable profit from underwriting, cost of investable assets under the Group’s insurance segment continued a downtrend and decreased from 1.4% in the first half of 2015 to 0.4% in the first half of 2016. In addition, Fosun encouraged its insurance subsidiaries to strengthen themselves with acquisitions: Ironshore, a specialty insurance company in the United States ("the U.S."), is expected to complete the acquisition of the remaining 80% equity interest in Lexon, the 12th biggest surety insurance company in the U.S., on top of the 20% stake in the latter already owned by the former. PeakRe’s acquisition of a 50% equity interest in Caribbean insurer NAGICO Holdings Limited has already finished the payment of transaction and thereby expanding its business into Central America. These two acquisitions, which will generate an additional US$360 million worth of investable assets, are in the stage of being closed. Separately, Fosun explored the asset-light business model proactively to bolster its insurance assets. It planned to participate in the acquisition of run-off assets in Germany through a fund.
In August 2016, China Insurance Regulatory Commission formally approved the preparation for the establishment of Fosun United Health Insurance Company Limited, which is the sixth health insurance company in China. As such, Fosun further improved the layout of its insurance business in China and established a comprehensive insurance network covering life insurance, property insurance, health insurance and re-insurance. Apart from this, Fosun also obtained approval from European Central Bank (ECB) for its planned acquisition of Hauck & Aufhauser Privatbankiers KGaA ("H&A"), a private bank in Germany in August.
The Group focused on wealth, health and happiness ecosystem and achieved remarkable results: the business segment accounted for 80% of the Group’s total assets and 60% of its total net assets
In the first half of this year, Fosun continued to focus its asset allocation on three key business segments, namely, wealth, health and happiness. As at 30 June 2016, the total assets of the wealth, health and happiness business segments reached RMB349.96 billion, up by 14.5% from the end of 2015, and accounted for 80% of the Group’s total, up from the 75% at the end of 2015. Net assets of the three business segments increased to RMB65.22 billion, significantly increased by 42.5% from the end of 2015, and accounted for 60% of the Group’s total, up from the 46% at the end of 2015. In the first half of 2016, revenue grew by 115% year on year to RMB28.15 billion, accounting for 86.6% of the Group’s total. Profit attributable to the owners of the parent amounted to RMB5.07 billion, up by 18.3% year on year and accounting for 115.4% of the Group’s total.
Health segment: After over 20 years of development, Fosun’s medical care and health business has already become a leader in China’s pharmaceutical and health industry. Fosun is combining "health management + health insurance" through improvement of medical care services and technologies in order to build up the first-class healthcare vital entity in the world that has competitive advantage in the industry and integration capability.
Fosun Pharma announced in July 2016 that it acquired Gland Pharma, a leading injectable drug producer in India for no more than US$1.26 billion, which is the biggest overseas acquisition ever by Chinese drug manufacturers in terms of the transaction value. This transaction will help Fosun Pharma to upgrade its drug manufacturing business, accelerate its internationalization and increase its share of the markets for injectable drugs in Europe and the United States. At the meantime, Fosun will take advantage of Gland Pharma’s capability to register drugs in 36 markets (including those of Europe and the United States) across the world as well as its R&D capabilities to produce high-quality products at low cost. This will enable Fosun to connect its innovative biological medicine R&D capability to India’s unique policy advantages on generic drugs and will thus realize the integration of the production lines in both China and India.
Five domestic hospitals under Fosun Pharma own 3,018 beds, with 6,000 beds being expected to be added in the next three to five years. Luz Saude (Hospital de Luz) owns 10 private hospitals, 1 national public-private partnership ("PPP") health service hospital, 7 private clinics providing daycare nursery service and 2 senior caring nursery houses with a total of 1,179 beds. United Family Health Care has 5 hospitals.
At the same time, Fosun is confident about the rapid development of the senior living industry in China. The Group launched its high-end senior living community with total gross floor area (GFA) of 133,700 sq.m. and a total of 1,545 beds. Moreover, a GFA of 377,259 sq.m. of such senior living community is under development and this will add 3,592 new beds.
Fosun United Health Insurance Company Limited, which has recently obtained government approval for establishment and became the sixth health insurance company in China, will help Fosun further improve its eco-system and provide more comprehensive health management services for clients through innovative and outstanding health insurance products. United Family Insurance, an insurance product jointly launched by United Family Healthcare and Yong’an P&C Insurance is a good example. In healthcare segment, Fosun connected itself to internet proactively and invested in internet companies engaged in health industry, including We Doctor, Mingyizhudao.com, ysbang.cn, Jixiang Health, Easyhin, and Scanadu, etc.
Happiness segment: Roof-sealing of the first Atlantis Resort Hotel in China and the third of its kind in the world, which was 99.98% held by Fosun Group, was completed in July this year and is expected to be launched for trial operation in the second half of 2017. Atlantis Resort Hotel Sanya still has 807 apartments and 197 villas which will be available for sale to international investors in October. Total sales from this project is expected to reach RMB8 billion. Despite a downturn in Europe’s tourism market, Club Med, another tourism brand under the Group, still managed to record the best results in recent decade during the first half of the 2016 financial year. Revenue and EBITDA of Club Med increased 2.0% and 70.5%, respectively in the first half of 2016 compared with those in the corresponding period of 2015. In April 2016, the fourth Club Med Resort in China was opened in Sanya. Like Club Med Resort Guilin and Club Med Resort Dong’ao Island opened earlier, Club Med Resort Sanya topped the list of TripAdvisor (the world’s no.1 tourism commentary website) for most popular local hotels a few months after the opening. In the second half of 2016, Club Med Beidahu Resort will be opened in Beidahu, Jilin province. To date, Club Med has signed agreements or letters of intent over 24 projects in China. In addition, after Yuyuan’s investment in Tomamu last year, Club Med signed an agreement this year to formally set up business in the resort of Tomamu. The first movie directed by Ang Lee and produced by Studio 8, a Hollywood movie maker invested by Fosun, is expected to be released in this November. In April 2016, Fosun participated in the privatization of Bona and invested in Honma, a famous golf product supplier in the world. Honma has a 14% share of China’s market for golf products and ranks first in terms of the share of China’s market for golf products and the share of the global market for high-priced golf clubs.
Wealth segment: Highlights of this segment include: Fosun obtained approval from European Central Bank to acquire H&A, a private bank in Germany that has EUR8 billion worth of assets under its direct management and EUR39 billion worth of assets under administration ("AUA"). Rio Bravo, the second largest independent asset management company in Brazil, became Fosun’s platform in this emerging market in July. Rio Bravo’s AUM, or assets under management, reaches US$2.79 billion and the scale of its asset management kept growing by 23% per year in the last 10 years. Rio Bravo’s businesses cover many fields such as private equities, equity funds, credit funds, infrastructure funds, financial advisory and various kinds of asset portfolio management and can improve Fosun’s professional investment capability in Brazil rapidly.
In the first half of 2016, profit attributable to owners of the parent from the investment side of the wealth segment was RMB2.31 billion, up by 104.0% year on year. Internal rate of return ("IRR") of the business segment reached 22.6% from 2000 to 30 June 2016. In addition, asset management and innovative finance segment started delivering good results as profit contributed by this segment amounted to RMB655 million, up by 13.7% from the corresponding period last year. The business segment has RMB64.79 billion worth of funds under its direct management and RMB77.5 billion worth of third-party wealth under its indirect management. The segment’s business became increasingly comprehensive as it included companies engaged in securities brokerage, private banking, asset management at home and abroad, internet banking, factoring, small loans, financial leasing as well as credit companies and finance companies.
Internet innovation: stepping up efforts to build up C2M ecosystem with industrial know-how
Fosun Group actively participated in the supply-side reform initiated by the government and capitalized on the explosive growth of the "customer-to-maker" business model ("C2M"), thus bringing "to business" ("2B") internet innovation from behind the stage to the front stage. This was aimed at building the entire ecosystem for the future. Fosun has attached great importance to the new, "customer-to-maker" business model, which is oriented to consumers. The business model enabled the upgrading of traditional service industries through investment in platforms with huge amount of data and capacity for immense data input based on mobile internet technology. It integrates logistics, information, capital and talents to restructure the commercial ecosystem, and serves as a seamless interface between customers and the providers of services and products, thus eliminating intermediaries and enhancing customer loyalty. The business model will enable the Group to meet diverse and personalized demands efficiently and at a low cost.
To build up the C2M ecosystem with industrial know-how, Fosun vigorously invested in platforms that have huge amount of data and capacity for immense data input, including the establishment of Star Big Data, a strategic agreement with Ant Group and investment in projects such as MYBank, dianping.com, We Doctor, jiguang.cn, MyMoney, 8dol.com and HECOM. For instance, dianping.com has over 200 million active users per month. We Doctor has over 110 million users registered with real names and 0.2 million experts from key hospitals with a total of more than 500 million patients being served. MyMoney has a total of 260 million registered users and 10 million active users per month. On the other hand, Fosun invested in C2M platforms that were capable of restructuring the supply chain, including EasyPrint in the printing industry, the "magic factory" Red Collar which produces custom-made products in garment manufacturing industry, and goujiawang.com, the provider of one-stop fitting-out products and services for homes in the fitting-out industry.
In order to satisfy the needs arising from the C2M ecosystem, Fosun invested in Espressif, a company engaged in "internet of things" and other smart logistics companies such as Cainiao, Caigouxiongdi.com, Best Logistics, Runbow, Yundaex, ZJS Express, Fosun Sinopharm Logistics. It also invested in companies engaged in the lending business and Fintech such as MYBank, Ximu, Fortune Credit Management, Fosunling, Guangzhou Fosun Yuntong Small Loan, MyMoney, datebao.com, Sure and Earnest.
Next step of globalization: more localized and more specialized
The fundamental solution to the issues arising from different countries, industries, capital market and fluctuation of currencies is more thorough globalization. More thorough and safer globalization depends on localization of talents and platforms and in-depth industrial specialization. Fosun is very keen on specialization and localization of talents. Fosun has 240 managing directors across the world, and 116 of them are deployed to manage overseas investment platforms while 101 are localized talents who included seven such talents specializing in emerging markets such as Russia and India.
Fosun Group acquired many companies with regional investment platforms, such as IDERA Capital acquired in Japan in 2014, Resolution Property acquired in the United Kingdom ("U.K.") in 2015 and Eurasia Capital established in Russia in 2015. These platforms won many contracts to undertake projects quickly right after they became part of Fosun. Such projects included Shinagawa Seaside Park Tower and office building W/Y at Harumi Island Triton Square in Tokyo, Thomas More Square in London, U.K., 73 Miller Street in Sydney and Palazzo Broggi in Milan. Apart from Europe, the United States, Japan, mainland China and Hong Kong, Fosun further strengthened the development of emerging markets. As at 30 June 2016, Fosun established 13 overseas offices and 3 of them were located at emerging markets. It also planned to open six new offices in the regions such as Latin America, South America and East Europe.
In the first half of 2016, Fosun Group actively seized opportunities for investment in emerging markets such as Brazil and India. In July and August 2016, Fosun Pharma announced the acquisition of Gland Pharma, a leading injectable drug manufacturer in India and the acquisition of Rio Bravo, the second largest asset management company in Brazil in order to build the platforms and a strategic talent pool for developing the markets.
Looking ahead to the future: To become a first-class investment group in the world with twin drivers empowered by insurance-oriented integrated financial capability" and "global industrial integration capability taking roots in China"
Fosun always adheres to the "insurance + investment" twin-driver investment model and perseveres in combining China’s growth momentum with global resources, while focusing on the business-to-family ("B2F") business model to mapping out a global strategies by concentrating on "wealth, health and happiness" lifestyle. In 2016, facing new changes brought about by the global market and growth of China’s economy in 2016, Fosun will continue to embrace internet, capitalize on the growing trend of C2M and build up the entire eco-system for its businesses. In the second half of 2016, Fosun will accelerate the optimization of its debt structure, improve liquidity of its assets, and work towards the goal of having the global rating of its debts upgraded to investment grade. Fosun will proactively push forward with its globalization strategy, continue to push ahead with "localization" and consistently deepen the development of its industries. Fosun will speed up its strategic planning for emerging markets such as Brazil, Russia and India to realize a new round of growth while aspiring to become the world’s first-class investment group dedicated to China’s growth momentum.
Hong Kong-listed Chinese property developer Sunac China Holdings Ltd. has agreed to acquire a 6.25% stake in online real estate agency Lianjia for RMB2.6 billion (US$375 million) by subscribing to Lianjia’s new share issuance, the company announced yesterday.
SIG Asia Investment and YI Capital, a Beijing-based technology-focused venture capital firm, have led a US$50 million series C round investment in Shansong Express, a Beijing-based inner-city logistics start-up.
China’s second biggest property developer China Vanke Co., Ltd. has agreed to invest RMB3 billion (US$440 million) in Lianjia, a Beijing-based online real estate agency, deepening the existing partnership between the two companies.
Chinese early stage venture capital firm Source Code Capital has announced the final close of its third U.S. dollar fund at a US$260 million hard cap.
Beijing-based venture capital firm YI Capital has completed the final closing of its maiden RMB fund at RMB800 million (US$116 million) hard cap.
Shenzhen, once a hotbed of technology innovation and home to seven Fortune Global 500 companies, is losing out in the race to becoming China’s Silicon Valley.
Chinese venture capital firm Source Code Capital has hired Huang Yungang (pictured), a former managing director at Matrix Partners China, as a partner.
Chinese investment banking and asset management firm China Renaissance aims to reach US$10 billion in total assets-under-management by 2020 from adding new investment capabilities in healthcare and mezzanine debt, as well as new investment strategies including hedge funds to its platform, according to a company announcement.
Alibaba’s Ant Financial is working with China Construction Bank and online real estate agency Lianjia to launch a blockchain-based apartment rental platform in China’s Xiongan New Area.