In today’s briefing:
By Nicolas Van Broekhoven
By David Blennerhassett
By Sumeet Singh
By Untying The Gordian Knot
By Ming Lu
By Arun George
By Osbert Tang, CFA
By Tina Banerjee
By Trung Nguyen
Fosun International’s H1/22 results appear to be reasonable, with higher revenue but lower earnings. The reported credit metrics are not very representative of the credit profile in our view, given the company’s investment holding nature. Thus, it is difficult to assess Fosun’s credit health. However, we take some comfort from the rate of divestments, which is outpacing the rate of investments. Reported liquidity on a consolidated basis seems adequate. That said, we have no visibility on liquidity at the holdco.
Still, we highlight that Fosun has major assets to be sold, especially those without ample synergies. The company has accelerated its asset sale process since 2021. However, it cannot name the assets currently, as details of the transactions are still confidential. Moreover, Fosun does not wish to affect the morale of employees at these assets. The asset disposals are focused on non-core assets, which are typically not listed.
By Xinyao (Criss) Wang
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