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Fosun Predicts Slump In H1 Profits As Virus Slams Tourism, Travel
Tom Burroughes
27 July 2020
, the Hong Kong-listed conglomerate that owns wealth management and businesses in other sectors, has warned shareholders that COVID-19’s disruption to tourism will hammer profits. The group said it expects to record an attributable profit of about RMB1.8 billion ($257 million) to RMB2.2 billion for the first six months of this year, slumping from RMB7.61 billion a year earlier. “Notwithstanding the significant negative impact on the tourism operations of Fosun Tourism Group in the first half of 2020, Fosun Tourism Group continues to control cost and strives to promote business recovery,” Fosun said. Here are results from Fosun, reported earlier this year.
There is a “significant negative impact of COVID-19 epidemic on the tourism operations of Fosun Tourism Group and Fosun Tourism Group." The organisation owns the Club Med resort chain, among others.
“While the loss on fair value adjustment of financial assets caused by the market fluctuation has been recorded in the first half of 2020, the board considers there is no material impact on the operations of the company as the unrealised fair value adjustment is a non-cash item. Currently, the company’s financial position remains solid with ample liquidity and diversified financing channels to cope with future business needs,” it said.
The group covers a number of segments, including healthcare, tourism and wealth management. In the latter area, the firm has continued to make acquisitions and enter agreements. Last November, Fosun agreed a strategic co-operating pact with Citigroup. Fosun is also rumoured to be considering a bid for Germany’s private bank, Bankhaus Lampe. Last year a report said that Fosun was thinking of buying the firm in a deal that could value it at €200 million ($221.9 million).
In 2018, Fosun concluded its purchase of a 69.14 per cent stake of Guide Investimentos from Brazil's central bank. Fosun paid R$167.9 million ($45 million) for the business, and a further R$120 million which is dependent on how well the firm performs in future. The firm also bought Hauck & Aufhäuser in 2016. Fosun - founded in 1992 – holds firms across different sectors, including wealth managers and private banks. Its acquisition strategy involves buying Western wealth management businesses. In January this year, for example, Fosun forged a strategic pact with UK-listed Standard Chartered.
In March 2018, Fosun signed a co-operation pact with HSBC as part of its growth plans. In 2015, it launched a financial platform for its investment and asset management business in Russia and neighbouring countries. However, not all of its bids have been successful: in 2015 it pulled out of an attempt to acquire BHF Kleinwort Benson.