Fosun International: Focus on four major sectors to position the global household consumer industry group. Adhering to the mission of making global family life happier, Fosun Group insists on providing high-quality products and services to family customers around the world. Through “deep industrial operation+industrial investment” two-wheel drive, Fosun Group has successively expanded its brand matrix and gradually grew into a large-scale industrial group rooted in China, covering the world, and with a multi-field layout.

The four major sectors developed collaboratively to help the Group expand. The Group forms four core segments through mergers and acquisitions of high-quality assets, with clear positioning and obvious synergy effects to jointly promote the Group's business expansion. 1) Health sector:

The layout is the earliest and most complete, and there are plenty of research pipelines. The health sector is the group's earliest and most complete sector. The industrial chain is well built, and it has the world's top research team and R&D technology.

Its subsidiary, Fosun Pharmaceutical, has an extensive research pipeline and is expected to contribute steadily and significantly. 2) Happy section:

Equal emphasis is placed on tourism and consumption, and the sector has sufficient potential. Mainly focusing on the fields of happiness, sports, e-sports, etc., it lays out fields such as leisure, vacation and big consumption through mergers and acquisitions of corresponding brands. Among them, Yuyuan Garden Co., Ltd. and Fosun Travel & Culture account for more than 90% of the sector's revenue. The group will promote multiple businesses and multi-regional layouts around two key subsidiaries. 3) Wealth sector: Insurance and asset management develop collaboratively to build a global asset management ecosystem. The Group is steadily promoting the increase in Portuguese insurance market share and global layout, obtaining long-term stable low-cost capital, and empowering the development of the company's core sector. 4) Intelligent manufacturing sector: Mainly steel and minerals, accelerating the deployment of new energy. Actively lay out the new energy industry and continue to promote the upgrading of the business format.

Accelerate exit from non-core assets and build Fosun's global platform. The Group began disposal of non-strategic non-core assets in 2020, and has achieved steady improvements in cash flow. On the one hand, it can reduce the Group's interest-bearing debt level and optimize its balance sheet, and on the other hand, increase key investments in the two core sectors of happiness and health. The Group will adhere to diversification and globalization strategies and build a diversified industrial system around the needs of consumers throughout the life cycle. Furthermore, it relies on a complete industrial chain and strong resource coordination capabilities to achieve gradual improvement in operating efficiency, and combined with a global partnership mechanism, it promotes its brands to expand the international market and build Fosun's global platform.

Investment advice: The Group is steadily withdrawing from non-core assets, focusing on the core household consumer industry, and will rely on strong scientific and technological innovation and international layout core capabilities to promote the global expansion of health and happiness. The estimated revenue for 2024-2026 is 209.95/235.384/261.9 billion yuan, and net profit to mother is 1.715/2.858/3.41 billion yuan, corresponding PE is 19/11/10 times, which is covered for the first time, giving it a “buy” rating.

Risk warning: The consumer market is under pressure, the international situation is volatile, the risk of exchange rate fluctuations, product development progress falls short of expectations, performance forecasts and valuation judgments fall short of expectations.