(March 9): Fosun International Ltd shares reversed losses to climb as much as 2.2% in Hong Kong after controlling shareholders pledged to boost their holdings, easing investor concerns over a forecast fivefold widening of annual losses.
The Shanghai-based conglomerate slumped nearly 5% in early trading after saying Friday that it expects a preliminary net loss of 21.5 billion yuan to 23.5 billion yuan for 2025, compared with a 4.35 billion yuan loss a year earlier. The stock rebounded after a separate filing Monday showed controlling shareholders plan to increase their stakes through open-market purchases.
The total purchase won’t exceed HK$500 million. Last week, the company announced another plan to repurchase no more than HK$1 billion of shares on the open market after the 2025 results.
A major contributor to Fosun’s hefty loss is the property business under its retail arm Shanghai Yuyuan Tourist Mart Group Co, which accounted for about 55% of the impairment, according to people familiar with the situation, who asked not to be named as the discussion was private. Yuyuan’s residential projects underperformed while Fosun also booked charges on goodwill and intangibles from its core business, the people said, adding that the group expects to pay dividends going forward.
The company, one of China’s biggest conglomerates whose operations span property, finance and healthcare, has been battered by the nation’s prolonged real estate slump. The impairment charges underscore mounting pressure on groups heavily exposed to property-linked assets, adding fresh challenges for Fosun, which only recently emerged from a debt crisis fuelled by credit-fuelled overseas expansion in the 2010s.
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Fosun’s retail unit Yuyuan has warned of a 4.8 billion yuan loss for 2025, reversing a profit a year earlier. Businesses from jewellery and food to residential, retail and office property development have all been hit by China’s economic slowdown and property market slump.
Fosun has been offloading non-core assets to pay down debt and invest in its key businesses including pharmaceuticals and finance. Last year, its insurance unit sold its stake in a Portuguese hospital to Macquarie Asset Management for US$361 million. Its pharmaceuticals unit agreed to sell some of its hospital assets to Warburg Pincus for US$124.08 million.
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