According to the Zhitong Finance APP, Galaxy Securities recently released a research report, initiating coverage of FOSUN INTL (00656) with a "Shareholding" rating and a Target Price of 7.5 Hong Kong dollars.

Galaxy Securities believes that FOSUN INTL is firmly focused on its core business and has developed into a Global Consumer Industry Group over 30 years. The core business has built a foundation for sustainable growth in Assets. Among them, the Health Sector, led by FOSUN PHARMA, has achieved impressive performance, with its Innovative Drugs continuing to grow. In the first half of 2024, four Innovative Drugs/biosimilars resulting from FOSUN PHARMA's independent research and licensing will gain approval for a total of nine indications both domestically and internationally, with four Innovative Drugs/biosimilars entering pre-market approval/key clinical stages for a total of nine indications.

Galaxy Securities is also optimistic about FOSUN's dual-drive from the Consumer and Cultural Tourism sectors, believing it can effectively assist FOSUN INTL in maintaining stable performance growth. Taking FOSUN Tourism and Culture as an example, Galaxy Securities believes it has created a new paradigm for the Global tourism and vacation industry, and post-pandemic revenue has also seen a rapid rebound. In the first half of 2024, the performance of the two core businesses, Club Med and Sanya Atlantis, continued to achieve stable growth momentum, and Galaxy Securities anticipates promising future growth potential for the Cultural Tourism business.

Regarding Shanghai Yuyuan Tourist Mart, Galaxy Securities indicated that the Jewelry Sector is exhibiting new momentum, with store expansion and brand upgrades progressing simultaneously. In the first half of 2024, the two major Gold brands, Laomiao and Yayi, had a net increase of 103 stores, bringing the total to 5,097. Yuyuan is also working to enhance the connotation of Eastern lifestyle aesthetics, developing differentiated products and introducing a new model for Asia Vets smart stores. As of the third quarter, the number of Laomiao smart stores reached 558, and it is expected to grow to 800 by the end of the year, demonstrating proactive market presence and adaptability.

Concerning FOSUN's Insurance Financial Business, Galaxy Securities pointed out that FOSUN has established a Global Asset Management ecosystem to support industrial growth and Asset collaboration, and the Insurance business also provides the company with a stable source of funds. Additionally, Galaxy Securities stated that FOSUN is focusing on a strategic light asset operation, and the dividend ratio can gradually increase. As stated by FOSUN INTL Chairman Guo Guangchang on December 22 at the World Zhejiang Business Forum in Shanghai, FOSUN emphasizes a balance of progress and retreat this year, aiming to resolve issues through development, exiting non-core and non-main businesses along with divesting heavy assets, with the goal of achieving an "investment grade" rating for FOSUN; more critically, it’s about adjusting the Asset structure. On the ingress side, FOSUN firmly emphasizes focus, concentrating on core businesses that have established advantages. Additionally, FOSUN will transition towards light asset operations, such as the Taicang Alps Ski Resort, where FOSUN invested in the first phase, with the second phase to be invested by the Taicang government platform, managed by FOSUN Tourism and Culture.

Galaxy Securities believes that FOSUN's significant exit from non-strategic and non-core Assets, leading to a capital return, can effectively improve the financial situation. In recent years, FOSUN has accelerated the implementation of a business focus and optimization of Asset structure strategy, significantly optimizing the overall Asset structure. In the medium term, Galaxy Securities believes that FOSUN, as an innovation-driven Global Consumer Industry Group, shows robust growth across its four business sectors, and with the company further enhancing its Global + innovative development strategy, there is still room for performance growth, thus initiating coverage of FOSUN INTL and assigning a "Shareholding" rating.