With the strong rise of Chinese brands, "going overseas" has become one of the important strategic layouts of Chinese brands. According to iMedia Research data, in 2023, 29.5% and 19.9% of large-scale enterprises have implemented globalized or have overseas plans; in enterprises that have implemented globalized layouts, small and micro enterprises account for 39.4%, 17.5%, and 13.6%, respectively.

Under the "going overseas" trend, Fosun International (00656), an industrial group with multiple field layouts, as one of the representative companies with strong operation capabilities and a pioneer in globalizing, still demonstrates strong resilience on the complex world economic stage and its strength is evident. It deserves a higher valuation from the market.

According to market analysts, Fosun International's global development can lead peers, mainly benefiting from its core industry operation capabilities that can be standardized, replicable and sustainable, with a set of "Global Operation" + "Value Realization". In addition, as an industrial holding group, Fosun has always been able to discover excellent companies in "value gaps", and by providing long-term capital and support for their excellent management teams and related resources, to enhance their investment and advantage resources for their growth and leading position in the industry, achieving a full range of business "expansion" from point to plane.

Guo Guangchang, Chairman of Fosun International, said at the mid-year conference on July 20th, "Fosun will continue to firmly advance the global development strategy and transform its global capabilities into sustainable profit growth." Among them, Guo Guangchang pointed out that overseas companies also need to develop globally, praised Fidelidade, Fosun's Portuguese insurance, for doing well in globalizing.

As an important part of the Fosun International Wealth Plate, Fidelidade, which has a multi-field layout, as one of the representative companies with strong operation capabilities and a pioneer in globalization, still demonstrates strong resilience on the complex world economic stage and its strength is evident. Fosun helps Fidelidade maintain its leading market position in Portugal through the deep operation since it joined Fosun in 2014, and by external integration through acquisitions. As of now, Fidelidade's insurance business has expanded to 12 countries including Europe, Africa and Latin America. In 2023, Fidelidade will continue to expand its market outside its domain, such as South America and Africa. Its international business total premium was 1.7 billion euros, a YoY increase of 11%, and its international business share has increased from 6% in 2017 to 33% in 2023. It is evident that through Fidelidade's continuous deepening of globalized layouts, Fosun International's industrial value chain has been effectively enhanced, and its performance has received a continuous growth vitality.

In fact, taking advantage of global development opportunities alone is far from enough. By driving the development of subsidiary companies through their own resource advantages, it is also possible to achieve the effect of reverse integration of global resources that is unexpected. Fosun International has obviously realized this point. Since acquiring the long-established resort brand Club Med in 2015, it began to develop its business in China in 2018, promoting light asset expansion to help Club Med turn losses into profits and focusing on differentiated complementarity with its existing products for domestic short trips. Using the Blackstone Mediterranean Beach Resort, which was officially opened recently, as an example, the total presale turnover of the resort had exceeded RMB 73 million as of July 10, reflecting market recognition and the strong market potential for such products, which are characterized by "light tourism" and "micro-vacations".

The aforementioned driving force has also further expanded Fosun International's "revenue pool". In 2023, Club Med's operating income reached RMB 15.123 billion, a YoY increase of 19%, reaching 118% of 2019's levels. On July 22nd, Fosun Tourism released a profit forecast, which expects that the profit attributable to shareholders in the first half of 2024 will not be less than RMB 0.3 billion yuan. The industry believes that Club Med has made a significant contribution to this.

Finally, although global geopolitical risks still exist, Fosun has industrial layouts in over 35 countries and regions around the world, effectively diversifying the geographical risks of its business operations. It is worth mentioning that with its increasing innovative strength, Henlius, a subsidiary of Fosun, announced at the end of April this year that its independently researched and developed Hanliku biosimilar drug Qu Tutu had been approved for listing by the US FDA, making it the only "Chinese" biosimilar monoclonal antibody that has been approved in China, Europe and the U.S. simultaneously.

Fosun's products are not afraid of changes in the situation and have successfully gone global with innovative capabilities, which confirms what Guo Guangchang said at an international forum in May this year: "Globalization will definitely become more and more difficult, but because it is difficult, it will become more and more valuable. In fact, China's economy needs to be strong both internally and externally. Only when more companies have the ability to operate globally can China's economy have stronger resistance to risks. The global operation of enterprises is actually an improvement in their ability."

Overall, in the trend of globalization, Fosun International is expected to reap the benefits of being a pioneer with its strong global operational capabilities. Compared with Fosun International's current valuation, its pb ratio of only 0.24 undoubtedly reflects its current undervalued position in the market. Therefore, this also means that as Fosun International continues to build its global capabilities and enhance performance certainty, it clearly has sufficient momentum to enter the valuation repair channel and have significant upside potential.