Fosun International has issued a profit warning, projecting a loss attributable to owners of the parent company of between RMB21.5 billion and RMB23.5 billion for the year ending December 31, 2025. The loss is primarily due to one-off non-cash impairment provisions and value revaluations on certain real estate projects and goodwill of non-core business segments.
The company attributes the substantial book loss to the continued downturn in the real estate industry, which has pressured its real estate business segment. Additionally, Fosun has made impairment provisions on goodwill and intangible assets of certain non-core business segments, reflecting changes in market conditions.
Despite the impairments, Fosun emphasizes that the adjustments will not impact the company's overall operations and cash flows. Analysts view the impairments as a prudent financial measure to clear historical burdens, maintaining that they do not affect the company's operating cash flows or long-term investment value. Fosun's asset base remains solid, with net assets still near the RMB100 billion level.
According to Fosun's 2024 annual report, net assets attributable to owners of the parent were RMB118.103 billion as of December 31, 2024. Based on the mid-point of the expected loss, net assets would be approximately RMB95.603 billion after deduction. Even at the upper end of the loss estimate, net assets would remain at approximately RMB94.603 billion.
The impairments are mainly concentrated in the real estate segment and the goodwill of non-core businesses. These adjustments align with Fosun's strategy of streamlining and focusing on core businesses. The company notes that its core assets have appreciated and realized value, offsetting the impact of impairments and potentially contributing to net asset growth.
Fosun's core business segments, including pharmaceuticals and healthcare, as well as insurance and finance, delivered strong performance in 2025 and have maintained momentum into 2026. In the innovative drug segment, Fosun's global market opportunities have expanded, highlighted by a licensing agreement with Pfizer valued at over US$2 billion and a strategic cooperation with Clavis Bio worth up to US$7.25 billion.
In the insurance segment, Fosun's Fidelidade recorded a net profit of €170 million for the first three quarters of 2025, a year-on-year increase of 11.7%. Peak Reinsurance reported a net profit of US$88.8 million for the first half of 2025. Domestic insurance companies also showed substantial growth in premium income and net profit for the year.
In the tourism and culture segment, Fosun's businesses achieved strong results, with Club Med's resorts in China reporting a 90% occupancy rate during the Spring Festival holiday, and Atlantis Sanya recording its best performance on record with total revenue of over RMB124 million.
Fosun's decision to recognize a substantial one-off non-cash book loss is seen as a proactive step to clear risks and advance its strategy of focusing on core businesses. The company has also signaled confidence by increasing share repurchase efforts, planning to repurchase shares worth up to HK$1 billion on the open market.
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