Fosun International (00656) turning point: After “repairing the roof on a clear day”, it steadily entered the performance realization period

A mid-term profit forecast made Fosun International (00656) once again become the focus of the market.

On July 29, Fosun International announced Yingxi: Profit attributable to shareholders of the parent company in the first half of the year is expected to reach RMB 1.5 billion to RMB 1.8 billion, a year-on-year increase of 127% to 172%. This figure not only surpassed the expectations of analysts such as Citibank and UBS, but also stirred up ripples in the capital market — meaning that after actively choosing a strategic shift to “lose weight and focus on the main business” and completing the risk of “repairing the roof on a clear day” was cleared, it is setting sail again with a lighter attitude.

This time, Yingxi provided a strong performance footnote for Fosun International's “butterfly transformation”. It also clearly showed the outside world that it is steadily progressing through the performance implementation period. A new stage with industrial operation as the core and innovation and globalization as the engine of growth has already begun.

Get rid of the “baggage” and go to battle lightly before starting

The Zhitong Finance App has observed that Fosun International's mid-term performance has increased sharply. This is a reflection of its effectiveness in unswervingly promoting “weight loss and fitness” after clearly proposing “focus on the main business” since 2022. It is also a proactive and future-oriented structural improvement.

The market generally believes that the book loss for fiscal year 2025 stems from the company's one-time non-cash impairment accrual of real estate and some non-core businesses. It is regarded as a centralized clean-up of old historical accounts. Although it dragged down book profits in the short term, it released potential risks and historical burdens in non-main business sectors ahead of schedule on a strategic level, clearing up barriers to subsequent core industry performance growth.

At the same time, supporting leverage reduction provided a solid financial guarantee for this strategic transformation. According to Fosun International's earlier disclosure, it has completed a total of asset withdrawals of about 75 billion yuan from 2022 to 2024, and completed withdrawals equivalent to more than 17 billion yuan in 2025.

Furthermore, according to the management's clear plan, Fosun will strive to gradually restore the profit scale of RMB 10 billion, aim to return RMB 60 billion of capital, reduce the total debt at the group level to less than RMB 60 billion, and strive to achieve an “investment grade” rating.

This series of initiatives reflects Fosun International's firm determination to improve asset quality and refined operations, and also provides a clear signal to long-term observers of the capital market: the company has always focused on deep value cultivation, and strategic trade-offs and resource optimization will free up more financial and operational space for subsequent long-term development.

In response, domestic and foreign brokerage firms have expressed positive views on Fosun International's strategic focus and debt optimization. Earlier, CITIC Construction Investment and Societe Generale Securities both pointed out that Fosun International continues to advance the “slimming and fitness” strategy, and that debt costs are falling steadily. Citibank's March research report indicates that based on positive fundamentals, Fosun International's 2026 performance is expected to be strong. Following this success, Citi also expressed its short-term investment opinion, believing that Fosun International's profit performance above market expectations will drive its short-term stock price increase, and reaffirmed Fosun International's “buy” rating.

This shift was also reflected in the capital market: on July 30, Fosun International hit a high of HK$4.85 during the year. At the close of the market, the stock price closed at HK$4.79 per share, up 7.88%, with a total market value of HK$38.968 billion. Compared to the annual low on March 9, its stock price has rebounded by more than 40%.

The main business resonates to promote a leap forward in profit quality

When “slimming down” clears up barriers to development, “fitness” has room to be fully freed up. While exiting a large number of non-core assets and inefficient investments in an orderly manner, Fosun International recovered valuable capital and resources from scattered business areas, focusing on core tracks such as medicine and health, insurance and finance, consumer culture and tourism. This is the prerequisite for a “turning point” in its performance in the first half of the year.

As Fosun's strategic focus completely shifts to improving the quality of industrial operations, the two major “ballast stones” of pharmaceuticals and insurance are becoming more prominent. The certainty and sustainability of their performance forms the strongest foundation for market confidence.

In fact, Fosun Pharmaceuticals, a core subsidiary in the health sector, began to shine as early as the first quarter of 2026. Operating revenue reached 10.073 billion yuan, up 6.93% year on year, and net profit to mother recorded 871 million yuan, a year-on-year increase of 13.87%. The net profit growth rate after deducting non-recurring profit and loss also climbed to 21.96%, clearly showing that the profit quality of major businesses has improved substantially.

More profoundly, the transformation process of innovative drugs in the pharmaceutical sector is accelerating significantly. In the first quarter, Fosun Pharmaceuticals accepted a total of 4 innovative drug marketing applications, and 14 clinical trial applications for innovative drugs (according to the number of approved cases) were approved by domestic and foreign regulators. In June of this year, the marketing registration application for Hans-like, an anti-PD-1 monoclonal antibody H drug independently developed by Fuhong Hanlin was officially approved by the State Drug Administration. It became the world's first and only anti-PD-1 monoclonal antibody approved for perioperative treatment of gastric cancer, filling the gap in clinical treatment in this field. This is also the world's first perioperative “chemotherapy” program for gastric cancer. Subsequently, Hans was approved by the European Commission (EC) for first-line treatment of adult patients with locally advanced or metastatic squamous non-small cell lung cancer (SqnsCLC) that cannot be surgically resected.

It is easy to see that, represented by H Pharmaceuticals and HLX43 and HLX22, which have continuously achieved innovative breakthroughs, the pharmaceutical sector's innovation pipeline has moved from a long period of early R&D to a harvest season of intensive approval and commercialization, and the positive cycle of “source innovation - R&D investment - commercialization return” has taken shape.

In line with the health sector's “anchoring the future,” the affluent sector “stands firm in the present” and continues to provide the Group with a stable profit foundation with its “cash cow” attributes. Fosun Portugal Insurance, a core subsidiary in this sector, maintained a strong growth trend in premium income in the first half of 2026, and both domestic and overseas businesses in Portugal recorded double-digit increases. Domestically, Fosun Prudential Life achieved net profit of 786 million yuan in the first half of the year. This figure has surpassed its net profit level for the whole of 2025. It can be seen that the outstanding performance of the two core sectors, pharmaceuticals and insurance, together formed a strong support for Fosun International's rebound in performance, and also confirmed the correctness of its strategy to focus on core assets.

The resonance between the consumer and cultural tourism sectors has further broadened Fosun International's growth boundaries and demonstrated the resilience and vitality of its core industrial portfolio. Among them, Yuyuan Co., Ltd. successfully exited the industry adjustment cycle, and net profit returned to mother is expected to increase by 91% to 170% year-on-year in the first half of the year. Fosun Travel and Culture continued to perform well during the Spring Festival, Qingming, and May Day holidays this year. Among them, the number of visitors to Atlantis Sanya Resort surged 90% year-on-year during the May 1st holiday, while Lijiang Mediterranean International Resort and Club Med Mediterranean Domestic Resort also handed over impressive reports. In the first half of the year, the commencement of construction of the Sanya Haitang Performing Arts Center and the formal laying of the groundwork for a large-scale comprehensive development project in Clear Water Bay in Hong Kong indicate that future business synergies are being unleashed at an accelerated pace.

Fosun's intelligent manufacturing sector has accurately grasped the boom period for new energy and new materials. Hainan Mining expects to achieve net profit of RMB 470 million to 550 million yuan in the first half of 2026, an increase of 68% to 96% over the first half of last year. Profit in the first half of the year has surpassed the full year of 2025, and the new energy business has become the core driving force for the performance explosion; the commissioning of Wansheng's overseas production base in Thailand also marks a substantial step in its global layout.

As can be seen, the two-way resonance between optimizing the debt structure and improving the profit quality of the main business has brought clear fundamental and qualitative changes to Fosun International, and has also become the strongest basis for the market to re-examine its long-term value. On the one hand, interest-bearing debt at the group level continues to decline, Fosun's liquidity is increasing, safety pads are increasing, and the certainty of business development is constantly improving; on the other hand, the “cash cow” attribute of the main business stabilizes hematopoiesis, giving Fosun the endogenous motivation and growth momentum to cultivate the industry and withstand market fluctuations.

epilogue

Through this mid-term success, we can see a logical main line that has always existed: through the refinement of “slimming down and fitness,” Fosun International has shed the burden of history. The core businesses have both short-term performance synergy and mutual support from long-term growth logic, which is expected to jointly build a more resilient and sustainable industrial ecosystem, and its profit recovery path is clearly visible.

Based on confidence in the company's development, Fosun continues to actively repurchase and increase its holdings in the company. From March 30 to July 10, 2026, Fosun International has repurchased approximately 53.41 million shares at a cost of about HK$216 million, conveying long-term confidence in the development of its main business to the market through practical actions.

When a company has both a clear strategic direction and proven execution capabilities, market repricing is only a matter of time. For Fosun International, the mid-term profit in 2026 may be the real starting point for its long-term revaluation.