Fosun International Limited (656) Earnings Call Transcript & Summary

Dear investors and media friends and analysts, good morning. I'm [ Wei Bo ]. Welcome to Fosun International 2020 Interim Results and Announcement. First of all, let me introduce our guests and also managers from Fosun International. We have the Chairman, Mr. Guo Guangchang; and the Executive Director and also Co-Chairman, Mr. Wang Qunbin; the Co-CEO, Mr. Chen Qiyu; the Executive Director and Co-CEO, Mr. Xiaoliang Xu; Mr. Gong Ping, CFO and Senior VP and Executive Director; and Mr. Pan Donghui, Senior Vice President and CHO; Mr. Huang Zhen, Fosun International Global Partner; Mr. Zhang Ligang, Co-CFO; and Mr. [indiscernible], Senior Assistant to the President. And for today's announcement, we are going to have 2 sessions in the morning session. And we are going to invite our senior executives to give us the announcement of the interim results and also share with us their observations. And we also have our [ CXO ] team to share with us their presentations. First of all, I would like to invite our CFO, Mr. Gong Ping, to give us a briefing on financials.

Yes. Thank you. And I would also like to welcome our shareholders for the interim results announcement. So in H1, this is a very special time, and globally speaking, we have seen COVID-19, which has disrupted our operations and business. And in a very large scale, our family consumption group has also been affected. We have also seen opportunities in H1. Although we encountered the pressures for our group and also employees and the senior executives and actually we have demonstrated our resilience dedicated to the vaccine development. And thanks to online and digitalization in order to turn around, in order to see the opportunities out of the crisis, we've continued to pursue our in-depth industrial operations. As we all know that in H1, in China, the pandemic has been well contained. We have also seen a pickup of the consumers market. And also the pandemic is also declining across the world, so we are also trying to radiate our passion from China to the world. First, I would like to share with you the financials in the first half of this year. And other senior executives will share with us our solid operation. First of all, I would like to share with you some financial numbers and as well as our lean management. And in H1, our total revenue was CNY 63.3 billion. In terms of concentration, you can see that 80% is contributed by our top 5 subsidiaries. Here, you can also see a number here. Regionally speaking, 57% comes from Mainland China and 43% comes from overseas operations. So you can see that is around [ 64 ]. So we have resilience, thanks to the market mix. And profit attributable to the owners of the parent is CNY 2 billion, and it was declining due to the pandemic. But here, you can see this is just a onetime impact by the pandemic. Our operating profit hit CNY 4.1 billion, excluding our tourism and culture business. So actually, we have more than CNY 4.4 billion (sic) [ CNY 4.79 billion ] and is down by 16% on a year-on-year basis. Well, in terms of the revenue and profit, which is already on the rise in H1, we also tried to raise the funds in the open market in terms of debt financing amounting to CNY 27.16 billion, particularly for Fosun International. And we also have USD 600 million bonds issued in July 2020. This is the large scale of high-yield bond. So you can see that actually, the premium is lesser than 20 basis points. So we have a very sufficient cash. So here, you can see for the cash and bank balance and term deposits amounting to CNY 115.9 billion, 22% growth. And we also have the undrawn credit facility of CNY 176.9 billion, which can guarantee our cash flow. Particularly speaking in H1, our average cost of debt is 4.72%. And so you can see that compared with last year, the average cost of debt was 5%. So you can see we have very good liquidity. It is also estimated that in H2, our cost of debt will continue to go down. And we are also very keen to know that on June 30th, our adjusted NAV was HKD 21.22 per share. And you can see the fair value went down. However, after June 30 and since July, and after the adjustment, you can see that on July 31, the adjusted NAV already restored to HKD 25.67. And next, let's also see the mix of our revenue. And here, in terms of revenue breakdown, particularly for our culture and tourism business, it has been greatly impacted our total revenue, down by more than CNY 5 billion, and you can see CNY 4.53 billion. Of course, the core business has already started to recover, for example, in July. So for Atlantis, we have see that the business went back 18%. And in August, you can see 19% of the occupancy also until August 15. And also for Club Med, they have recovered the operations and their capacity restored to 37% of the total. And also in H1, profit attributable to owners of the parent, you can see, down by CNY 5.6 billion. For the industrial, it went down by CNY 3.54 billion. And for tourism, down by CNY 1.13 billion. For other operating income, down by 0.93% (sic) [ CNY 0.93 billion ]. And so here, I want to explain the breakdown of this profit attributable because of the volatility in the capital market. So that is -- only on the book. That is another cash loss July and August, when the capital market started to recover, and we started to recover all these losses in the capital market. Well, globally speaking and also when we take a look at the whole year, I know that you would like to know the evolution of our operation and also our business mix. In the recent years, we started to be building ourselves into innovation-driven and family consumption group despite the pandemic. We can still see that for Fosun International, we still -- based on our customers, we are still making evolution into health, happiness and wealth. We try to improve our operations and also our product innovation and competitiveness of our products in order to ensure the stability and health growth. In H1 for health, you can see it is nearly flat. Also 13% down for the health and also -- we can see 13% down for the happiness and 5% decrease for the wealth. And in this slide, you can also particularly notice that in the past 5 years, since 2016, for Fosun International, you can see that the growth grows very quickly, especially for the health and happiness. Particularly for happiness, you can see the CAGR is 46.7% for the happiness, and it represents 43%. And also for the health, you can see the CAGR was 17%. For the wealth business, the CAGR was 3%. So you can see that for the wealth business, you can see that it goes from 56% in 2016 to 32% in 2020. So the mix is better balanced. And let's also take a look at the top 5 subsidiaries. They contributed 80% of the total revenue, especially Yuyuan, Fosun Pharma, Fidelidade, Fosun Tourism and also Peak Re. And due to the pandemic, all these have seen the decline. And also for the Fidelidade, we have also seen exposure in Europe. However, for the other subsidiaries, you can see a very balanced revenue. So overall speaking, we can demonstrate a very strong resilience. And based on the analysis and the revenue breakdown, let's take a look at our leverage and the debt management. We would like to ensure the stability. And through the end of June, you can also see the leverage is also quite stable. You can see 56.9% for the leverage ratio. And also, you can also see the debt breakdown by currency, and you can see renminbi accounts for 50%, 60% (sic) [ 56% ]. That is also healthy. And also for the cash and balance and term deposit, you can see it is always rising. And on top of some major financials and I would also like to share with you the fact that as a family consumption group, we go deeper into the industrial operation, what tools we have adopted in order to ensure the stable growth and also the dynamic equilibrium. So here, you can see this is FC2M ecosystem. This is our lean management tools for different assets. We have a stratification. And we have innovative assets and high-growth assets and fundamental assets. So in our structure, you can see that is about 20 to 80 to make sure that innovative assets represented 20% at the same time. And we also have holistic methodologies in order to ensure our strategic development and particularly for HR development. And we are also going to make preplanning. And now for the core targets, core management and also for the core milestones, we also have corresponding incentives. And in the process of lean management, we have also come up with an ongoing improvement mechanism. For lean management, we have also made use of all our tools. You can see in terms of investment and exit here. That is one-to-one in H1. We're continuing to focus on the core investment to improve our portfolio for our group level. In terms of the capital, we have no investment pressures. If necessary, our groups and our capital can also be used for those larger platforms. We encourage our subsidiaries, our insurance companies and also our fund platforms to have their portfolio in order to reinforce their investment portfolio. Particularly for H1, it required Jin Hui Wine as a controlling and majority shareholder. And in our lean management system, in terms of investment, we made a lot of efforts also in terms of treasury. And we have also improved our duration in order to improve the efficiency of the capital utilization, you can see, for the RMB and also foreign currency and the long term and short term and syndication and debt financing and also in terms of the dividend management. And we have a series of lean management tools. All in all, you can see for our lean management has a very important component for FC2M. It is not just about the tools, and it also is about the transformation of our mentality. And to this point, so I have already walked you through the financials in H1 and also our lean management tools. So next, I would like to give the floor to other classmates for further presentation.

Thank you, Mr. Gong Ping. Next, I would like invite Mr. Pan Donghui, CHO, to give us the presentation on our organization.

Dear shareholders and also our media friends, next, I would like to share with you the following aspects. And from an investment-based company to an industrial-based company and a focus on FC2M and what we have done in terms of our corporate evolution. So actually, yes, because we would like to dedicate ourselves to the future 1 billion family consumers, in the very beginning, we have been managing 1,000 investment professionals, and now we will like to empower our global employees of 70,000 employees. So first of all, we have set up our industrial operation committee, and we have also set up our special committees and our health and also happiness and wealth and also digitalization committee. So here, you can see we can synergize our resources and also, we can dedicate ourselves to our good products and synergize our BD resources with very good results. And we have also improved our [ CXO ] system. And we also [ opened up our architecture ], and we have introduced our top talent and also we have also deepened our industrial operation in H1. And we also have our CGO and CTO and a CPO. And we have already started our progress in order to facilitate our transformation, and we have also grown our business very quickly. And also for HR, it has also been prioritized in our system. And we have also tried to improve the capacity of CHO. They have to know the business and get closer to the business in order to create more values. And we continue to push forward our culture values. We should have to be on the same page at the bottom of our heart, and we have to understand FC2M to be consistent with each other. Customer first is one of our priorities about Fosun [indiscernible]. Next, we are also very actively to push forward the digitalization under C2M because we want to ensure online for the employees and also for our managers and the products and services, based on all the online technologies, in order to respond to the needs more quickly. And also, we can also help our HR in trying to improve and promote and also boost our operating efficiency. And next, in terms of our talent building, we're also very active in promoting our HR systems, and based on C2M, we are also trying to restructure our teams. And in this construction, you can see, we want to increase our company by 10x in the next 10 years. And we want to dedicate ourselves to the 1 billion global family consumers. In terms of the size, from 70,000 employees, in the future, we are going to grow it by 3x around 200,000 employees by means of our digitalization, and we can improve our number of headcount by 3 times. Personnel structure. We're going to actually solidify our head office team, who we're going to send over to the first line and then we can reduce the headcount on part of the head office by 40%. In the percentage of those people focused on industrial operations at the corporate level, up by 10%. So in terms of bringing those extraordinary talents, we're ready to initiate 2,000 talents planned toward the upside. We plan on hiring 1,000 high-potential talents from within. We will actually kick off a selection kind of a campaign. And again, we have, like, [ CXO ] plan and a chairperson of the Board class assistant. And we will leverage the training resources of all those ecosystem portfolio companies to train our talents and empower them as we build those industrial operational teams, our partners, especially Chairman, Chairwoman and CEO of those core portfolio companies. In addition to focusing on the core business activities as they attach more importance to people in an organization, they spend more time of what they have on people in calling those daily meetings, weekly meetings, 5-weekly meetings for people in organizations. So we do the right things. We put people to the right use of those things, and we're continue to be evolving. In the first half of the year, for over 500 people, we have completed job rotations activities across the board. And from within, we have, like, over 300 high-potential people and talents, and rapidly, we're advancing our business activities. So as we do that, we also make sure that we can normalize our incentive system during the worst period. We are also continuously optimizing the core incentive system that is centered around value creation. And we're making adjustment for strategic transformation. In the past, it was based on investment carried, and from IRR and ROI, we had value created. Now we're transitioning toward industrial operations. We are focused more on value growth of those operating companies. And to share those added value, we need to particularly pay attention to the competitiveness of the businesses in the industry and development of the talent, bench strengh and how can we use those stock rights and options to bundle what we do with those core talents. Then coop and competition system. We need to make sure the incentive scheme is enjoyed by the right people. How can we choose those right people? We aim those talents that are ranking #1 or #2 in the industry. We have the 2/7/1 coop and competition system so that we can have a ranking measure, value-creating performance of our people. We have reward and definitive measures put in place. If it is extraordinary talent, we should have a full-fledged reward. For example, the [indiscernible] system. We have a typical kind of a representative systems so they are up and running on the point of a BFC, despite the [indiscernible] of the pandemic. They started to battle trying to win 100,000 members with a traffic coming in of the customer resources. They managed to post their sales revenue. And again, the central government put forward new kind of initiatives to promote [ collective street ] vendor commerce, then we actually launched a campaign those kind of [indiscernible]. We have different teams that are fighting this battle. And we have the weekly measurement of the data and a monthly review and a quarterly ranking so we mobilize [indiscernible] of our team talents. And then BFC secured very good progress. On June 6, the commercial [indiscernible] once up and running, grow a traffic of over 100,000 for the first day since its operation. So we have over 130 [indiscernible] that exposed our campaign and Q-on-Q growth of 34%. The sales revenue up by 78%, so very great accomplishment achieved. In the interest of time, I only shared with you some of the highlights in the work we do in the lines of [indiscernible] focus on tech innovation, the FC2M ecosystem, a talent mechanism evolution, work-time normalization, a lean management to make sure that we are more effective in what we do and continuously advance our organizational efficiency.

Next, global partner, Huang Zhen, who's going to walk you through on our products.

Dear investors. Good morning. On behalf of Fosun management, I'd like to share with you our product first. So Mr. Pan already talked about a very important thing, that is, the industrial strategic transformation and as Mr. Gong also mentioned, we need to transform ourselves into a consumer business for family accounts. So how can we better serve our target household customers and meet their requirements? I think the key lies with enhancement of industrial operational capacity. In the first half of the year, across various industries within Fosun systems, we no longer manage our operations in separate or in silos. Now we have industrial committees, which are very important drivers for industrial operations management. In the committees, we have core portfolio of companies, operational talents and executives that constitute the membership of the committee. We have the top-level design of the committees, and we come up with a strategy, and efforts are continuously ongoing through the various organizational mechanism so that we can continuously develop the FC2M system and continuously provide increasing number of wonderful products with services to our household lines. We have product tech center, global supply chain center, user and marketing center. So with those centers that we have under the umbrella of the product committees, we can explain to the [ 3D ] efforts. We have the [ 3D ] system. We have the product user experience system and industrial operational distribution system. So the vertical ecosystems and their operational capabilities are improved. [indiscernible] vertical line and the horizontal harmonization efforts are better as a result as well. So the customer resources and information channel resources and product information can be integrated horizontally thoroughly. So for real, we can create this ecosystem platform with those magnification effect we can achieve. In the first half of 2020, the Fosun product [indiscernible] we are launching new products that are very good and meet those requirements. In addition, the combination of products we have that we are good at maintaining strong momentum, for example, Fosun Pharma, we got the license from BioNTech for their mRNA as a COVID vaccine, the R&D in the commercial development rise in China, Henlius, Fosun Kite, and we are continuously launching new products. We have [indiscernible] from happiness sector and Lao Miao gold on Tmall platform, the e-commerce site, we debuted the new products for the first half of the year. As for Fosun Health+, there is the Fosun family day, which is very important to marketing. Since the first half of the year, we've launched online house care service product, FHMO product, which is approved by many consumers. The platform of Fosun Health+, 2 months since its launch, registered accounts exceeded 1 million. We also have the fashionable facial mask as a new product under the pandemic circumstances. It is developed from 0 to 1 based on C2M strategy. We managed to put together a supply chain for fashion face mask. We combined 2 elements, namely, beauty and health. So we've completed 15th brand, brand matrix after 2 months [indiscernible] exceeded 100 million. Traditionally [indiscernible] in China, Y-o-Y growth of over 100% of [indiscernible] in China. On top of the CNY 500 million sales last year secured CNY 440 million performance for the first half of this year. Then Clum Med, our medical device, is indeed, we've managed to create [ third-party performers ] of our product. So from this perspective, Fosun, our product has been solidified and it will better serve our family consumer clients and we managed to do this because industrial groups are going wild on those, let's say, unique marketing. And in new retail private main operation, in our live commerce, we are, as a matter of fact, making hard efforts on all those lines with active and synergizing efforts across the [indiscernible]. For example, Fosun family day, we integrate the industrial resources under Fosun umbrella and providing well products to our customers. The new retail, for instance, based on the very concept of a new retail and [indiscernible] marketing campaigns, 5,000 of those innovative and marketing sessions with CNY 100 million sales revenue achieved. There's live-streaming commerce as a novel marketing model, and we combine this kind of a philosophy with Fosun methodology. We are working with 13 leading hosts online live streaming sessions in 5 live commerce platforms that we work on, and we created sales of CNY 175 million. In addition, we are also trying to make sure that we have those kind of promotional systems put in place to normalize the tool of live stream to promote commerce. In terms of the private domain marketing, our industries are going wild to build our proprietary [indiscernible] system building. In May, based on corporate rework, that is a corporate [ recap ], we're making efforts as well within 2 months [ 30 ] Fosun portfolio companies. Amongst corporate WeChat, we've got over 8,000 corporate WeChat customer groups with over 400,000 followers. This achievement is accomplished within a period of 2 months, and we also focus a lot on customer experience. So these are weighted average for our industries. In the first half of the year, the overall customer satisfaction exceeded 83%. The net promoter value of the customers is 42.8% because across various industries [indiscernible], the Net Promoter Score is between 10% to 50%. Where we're now for the Net Promoter Score is 42%. It is very good. In e-commerce platform customer comments, in local lifestyle platform, comments of the users for those metrics, we are the frontrunner as well. So the gist of it is our service is approved of by most of our customers, which we think is a basic indicator. We need good products, good services, good marketing, but the linchpin lies with extraordinary customer satisfaction and experiences. And lastly, the pandemic. What else are we supposed to do? First, the online, the health and family business. So that we will continuously invest in evolution and integration of our industrial operations for those different important factors as well as the marketing paradigm in [indiscernible] in terms of system and mechanism. We will make continuous efforts to solidify our framework. We are making exploratory efforts. The industries where we have the presence, we look into their product and industrial characteristics. So based on the [indiscernible] customer experience, we try to come up with a product innovation system, like Mr. Pan mentioned as well, the decision-making system, incentives as well as organizational support for our teams. All those are important drivers. Our users' life cycle management is going to be an important part and core thought of the operational committees. We conduct, like, customer satisfaction survey and we manage to drive new customers. Those are important management points. We will also put in place an all-touch point surveillance system from consumer insight all the way to the end of a customer satisfied, every step of the life cycle we are continuously bettering our industrial operations. That's it from my part. Thank you.

Our CTO classmate, [indiscernible] who's going to talk more about our digital efforts.

It's my great pleasure to have this opportunity today to share with you the digital footprint of Fosun and our direction to go going forward, some of the achievements we've already secured. So first, the system building for digital efforts, 3 parts, like the management digital, business digitalization and infrastructure ability to fend off the risks. So the 2 parts on the left and on the right side of the slide. After years of efforts on the part of Fosun, you may already know that we are one of the earliest to partner with DingTalk, building a corporate scenario communication tool, right? So throughout the years in the past, we're making continuous efforts on the DingTalk platform to create the one Fosun digital and mobile experience for our users. During the pandemic, be it our antipandemic efforts, the battles we've been fighting, the medical supplies, campaigns we've launched and also the development of the fashion face masks and reagents for testing, we actually have those wonderful battle platforms where we fight those battles together. In the second half of the year, we look at topics like corporate security and risk management as well as intelligent assistance for employees. These are some of the new topics we covered in the second half of the year, some of the new functions where we launched by year ending. Then with continuous iteration, we have reengineered the Fosun cloud and online migration of the budgetary process. So every step of the way, those are very important efforts along the lines of a digital. All right. I'm going to focus more on business digital today. So under the strategy of FC2M, there are 4 [indiscernible] of important messages here. Of course, customer digitalization. We have online and off-line customers. We have 2B and 2C customers, different types of customers. We have data on multiple fronts. And these data is essential to marketing digital, of course. So those kind of data is involving every sector, including happiness and health. For example, [indiscernible] service. The efforts are underway to do or achieve those marketing automation work. If you look at the health care sector, like, the [ Fosun ] care as well as reagents and testing diagnostics, we are going out to expand the Internet base to sales and services. From the standpoint of supply chain, Nanjing Steel is making continuous efforts to build the agile supply chain by virtue of [ industrial ] Internet with lean operations and integration of efforts upstream and downstream of the value chain and they managed to secure improvement of the inventory turnaround by 20% already. Next, let's look at the planning of our digital progress. There are 2 parts. First, those industries and a portfolio of businesses for each business in our industries, front office efforts are underway along the lines online migrations in digital. I'm going to walk you through some specific [ keys ] later on. Another part is actually the intelligent and mid-office divestment. So many portfolio businesses. How can we threat those [ 2 ], right, into the same line. Based on common features of different sectors, we try to build the intelligent mid-office with a marketing engine with enablement of shared services. I'm going to walk you through some nitty-gritties and details on those fronts. Here is a case in point. For example, the FC2M battle operation management. For that, we have already embedded digital elements with the metrics. We have the kanban system. We have, like, 50 core businesses that are connected to the instrumentation panel or kanban system already. That numbers are growing as we speak. But on the C end, in specific cases, for example, when we zoom in on those individuals and entities, we'll have the offline commercial complexes, which are dealt with a heavy blow because of the pandemic. But luckily, since last year, we began to cover the touch points every step of the process of our users. We begin to make efforts to convert our off-line customers to the online members. Then this year, during the pandemic, we delivered the products to their doorsteps. Now in the post-pandemic era in China, we drive those traffic back to our offline entities. So we have seized opportunities from the crisis. So our online sales are up by 30% based on a Y-o-Y basis. At the same time, for our consumers, we also adapt ourselves to their online consumption behaviors, and we have also set up a very solid foundation going forward in addition to our individuals. As a matter of fact, in the Fosun Group level, as was mentioned by Mr. Gong, we also have the battle in terms of our private domain. I do not want to talk about the numbers again, but basically speaking, you can see that we have adopted many digital tools. For example, we have our [ vision ] and also the bonus and also the labeling system, the live streaming, et cetera. And thanks to the digital instruments, for the entire group and also for our substitutes, their efficiency can be greatly boosted. And actually, we can set up a more solid foundation. And just now we have also mentioned the mid-office. Well, you know that the history for the development of mid-office is relatively short. But our purpose in this is to enable our technologies to get closer to the scenarios, and we try to get fully integrated with different scenarios. So that's why in the system level, for instance, for [ HTAP ] and also the robotic and AI learning, et cetera. So they can always be integrated and applied in the actual scenario. So I do not want to read these numbers again. Overall speaking, you can see that we can improve on our consumer insight and also operating efficiency in order to be conducive for our future client acquisition. Just now we talked a lot about [indiscernible] and focus on to [ link ]. And in addition to the Nanjing Steel case and for the consumers, we're also trying to proceed with the lean management for the outlets and stores. For example, for the Lao Miao gold, we have used the ID technologies for all these merchandise, and the whole procedures, the whole processes can be greatly improved in order to minimize the errors. And thanks to the mid-office and our AI capacity can also be boosted and conducive for warehousing and also prediction based on the models. So by this methodology and for the ordering and also for the delivery, you can see the efficiency has greatly enhanced. Well, next, let's talk about the M-end, our product. Well, actually for Fosun, M-end is always one of our priorities, digitalization, and it can continue to boost our good products. And in this case, you can see for the host of [indiscernible] platform, our purpose is to build the best-in-class practice in order to improve the R&D management and efficiency. Well, all in all, so you can also see that since 2018 on a yearly basis over the past 3 years, we are dedicated to multiply our investments in terms of the employees and also the IT investment, in addition to these numbers, in addition to the online active number of subscribers and users in online revenue. And more importantly, you can see we can accumulate more digital assets, and also our application can also be greatly improved. Going forward, these technologies can continue to make a contribution to empower our business and digitalization can also help our core group and also our subsidies to transform in the future.

Well, thank you. Next, I would like to invite Mr. Chen Qiyu, our CEO, to give us the introduction on ecosystem. Thank you.

So first of all, yes, let's take a look at our entire ecosystem. For Fosun and for our entire ecosystem, we always put emphasis to improve our core strength in order to promote the ecosystem synergy and multiply effect. There are 2 priorities: one is product, the other is customers. And we have to focus on all the products and customers in order to build our FC2M ecosystem. And also in the midterm, for our health and happiness and wealth and tested by the pandemic outbreak, as mentioned by our CFO, Mr. Gong Ping and also Mr. Huang Zhen already gave us the introduction, and in the process of operation and one of the highlights, take a pharmaceutical, for example, and a series of new drugs that have been approved for launch and release. And for our medicines, they have also been greatly praised, and we have also been listed in the bidding process and for our ventilators and ambulance and nuclear and test kits have also been growing and also for our happiness in the business. And then we have also captured the opportunities, and we made some merger and acquisition and also extend some of our business lines. For example, we have acquired Jin Hui Wine, and then we have our new patents and also for our AHAVA, which has also witnessed high growth. And for the travel business, we have been tested by the pandemic. And you can see that in China region, the travel business has been turned around. In European market, we believe that we are going to be back on the track quickly. And then for wealth, for banking and insurance, we have also seen a very good growth. And in terms of investments, we have strike a balance between the investment and exit, and we have also reinforced our portfolio. And for smart manufacturing and for Nanjing Steel, they have also made new progresses. And also for the Jiewei Power and also FFT have also made the new progresses in terms of market expansion. For Fosun Hive, particularly for BFC and also for some priority regions, they have also been well recognized by our customers. And for our health ecosystem, we can see that -- and we are trying to focus on the innovation-led pharmaceutical and health care service system. And for the medical equipment, we try to put emphasis on innovation, and we try to advocate innovation, globalization, integration and smart tech. For Eco-synergy, we try to make a breakthrough in our health care service and ecosystem, including senior care, et cetera. Based on the Internet technologies, we try to make a breakthrough in the health care service and ecosystem in order to come up with our vertical C2M. And also led by Fosun Pharma, we try to pave the new way for our full spectrum value chain. For example, we have the BioNTech platform, the small molecular platform, vaccine platform, [indiscernible] cellular platform and injection and also generic drug platform. Then for the devices in diagnostics, you can see medical and esthetic solution and IVD, ventilator, surgical system, health care AI and whole of the medical services in health and management. And we also have a very good [indiscernible] of our medical service providers and also trying to make [indiscernible] and/or synergize our online medical and health insurance to also see our [indiscernible] and other elderly senior care services are also making very good. And then for us, we try to put more emphasis on R&D. So you can see that we are working very closely with research institutes. So you can see we're trying to make more fundamental researches in order to advocate the early stage of incubation. And we put emphasis on the independent R&D. At the same time, we are also working with other global partners. And we tried to really make early and mid-stage development. And we also try to accelerate the late-stage development in order to guarantee and proceed with commercial production. And here, you can see we have made an increasing investments since 2016. We have seen very high growth of investment in R&D, primarily on pharmaceutical. And you can see for the biosimilar medicine represents 57% of total. And through independent R&D, international cooperation, innovation, incubation and these investment, through all these channels, we would like to introduce the most innovative technologies. For example, for the vaccine for COVID-19 and at an [ earlier ] stage, you can see we were involved. So you can see we can accelerate the conversion of these innovative medicines. And we have also set up a very comprehensive drug pipeline. So we focus on the tumor as well as some other diseases. So you can see Phase I, II and III, and we have different medical pipelines. And under COVID-19 pandemic, you can also see the advantages of our industrial chain. And just within a very short period of time, we have launch of our nucleic and tester kit. And for example, for the ventilator business acquired in the overseas market, we can also be supporting our China region. And you can see that our ventilators have been receiving the orders and, globally, U.K., U.S., et cetera. And also for the negative pressure ambulance, at the same -- at the very beginning, the MIIT has launched a production line for our negative pressure ambulance. And also for the new drug and development, our Henlius, very quickly started to study the antibody against the COVID-19. And more importantly, on March 16, together with BioNTech, we have signed a cooperation with them for the mRNA vaccine on July 17 and approved by NMPA, and we started in our clinical trials. And for the COVID-19 vaccine development, here, you can see a list here because this is a health emergency. Globally speaking, we have an inactive agent and recombined. And also for the current mRNA, you can see different technical routes. And together with the German BioNTech and also Pfizer, we are working on the mRNA and technical R&D. We are still in the first [ echelon ], and we have already seen the Phase III trial in EU and the United States. We really hope that we can complete the clinical trials in Europe and in U.S. and in China, and we hope that it can be available ASAP. Last night, we have also made a public announcement and in the region that we have covered and for Hong Kong and the Macau regions, and they have already started to have a very clear intent to purchase 10,000 items of our vaccines. And also for Henlius, the monoclonal company, it is already listed in Hong Kong and Heineken, was launched last year. And then the second one, a biosimilar, [indiscernible] has already received the approval in China and Europe. This is the first Chinese biosimilar which has been approved by the authorities in EU. And also, you can see in the follow-up procedures, we are going to accelerate the R&D for other biosimilars. And also for our diagnostic and also medical equipment and especially for the nucleic and the tester kit and also the emergency systems and also for our medical static laser and also our Da Vinci system, they are also growing very dramatically. Besides, we have also set up our incubation platforms. For example, we are working with professors to come up with some incubation programs. And we are also very active to promote our Insurance Plus and Medicare. And we have very good practice in overseas market. Take Fidelidade in Portugal, for example. And also together with [ Louis Wood ] held by Fidelidade, we have a very good cooperative mechanism of Medicare, Plus Insurance and in China. And in our Fosun Pharma and like in the united family hospital and also for Fosun United Health insurance and also Pramerica and also our testing center. And we have also synergized our products in different format. And then in our happiness ecosystem, we try to cultivate mid- to high-end family consumers focused on the content business models and products connecting online platforms with offline scenarios in terms of our business layout, and we are also dedicated to the offline scenarios for our families. We also try to combine the industry and urban development. And we are promoting the further integration between the industry and urban development. We are also trying to boost online platforms in order to echo and improve the offline scenarios. And also in our happiness ecosystem, we have brand consumption and tourism and culture, these 2 sectors. In terms of brand consumption, it covers around 10 businesses, jewelry and also dine-in, food and beverage, and beauty and health and watch and a smart retail, luxury brands and [ pat ] and sports. Then for tourism and the culture sector, we have vacation destination and resort and hotel as well as content and service solutions. And then for our brand consumption and tourism and culture, over the past one decade of an in-depth operation, we are already entering into the time to reap the benefits. And in brand and power global C2M system, digitalization, we are moving forward. Then for the brand consumption, we want to leave a trend of Chinese culture renaissance and [indiscernible] in China and build ourself as a world-class family and happy consumer group. And our position is in brand-building, track layout, ecological synergy and chemical effect. In H1 this year and for our jewelry fashion, we can see we have bucked the trend, and the net opening of more than 200 stores. [indiscernible] products, we have acquired DJULA, and we have other set up the Damiani joint venture and also for our culture dining. We are also trying to move into the chain management for cosmetics. We also have the basic, the mix, take AHAVA, for example. And we have witnessed a 29% year-on-year growth. And for food and beverage, we acquired Jin Hui Liquor and Wine. So we have entered into the liquor business, and we believe that it is a new momentum going forward. We have also officially engaged ourselves into the pet like 5ichong and Hills and have also been working with us. And then going forward and for the jewelry and fashion, we hope that we can continue to upgrade its brand and also improve the gross margin as well as customer satisfaction. And then for the brand, we're also trying to open more stores. We also want to use smart and digital tools in order to drive the jewelry and fashion business both online and off-line to reach and touch on our consumers. And also we want to build our FC2M. And for the culture dining, like, Nan Xiang and all the restaurants, these and time-honored brands have also been expanding. And also the restructuring of Song He Lou restaurant. And for cosmetics, we have also seen the acceleration of online and off-line operation. Particularly, we want to use the online to drive the off-line. And in order to speed up our upgrading of our product mix. And we also want to set up the global R&D center. And for food and beverage, we want to continue to launch Jin Hui Liquor. And for the pet, we'll continue to incubate this project. For jewelry and fashion, here, you can see, relatively speaking, we have already come up with a very holistic brand matrix for high-end category, for example, joint venture with Damiani. So this is a very global high-end category. For Lao Miao Gold, the jeweler, and Yayi, this is about the mass brand and subsector classification. So we can cover the majority of our consumers. Going forward for our jewelry and fashion group, we will continue to focus on the customer-centric to improve on our products and services through different campaigns. And centered in China as a region, we want to build on our implementation of C2M, and we hope that we can see ongoing improvement on revenue. And for tourism and culture, our position is to build ourself as the world's leading comprehensive tourism group focusing on leisure and vacation, and we're also the world's largest leisure resort group. And we want to continue to improve our product power and the brand power and also consolidate scarce resources and the ecosystem in order to achieve globalization. For the tourism and culture, the income primarily comes from resorts and hotel, and the location is also moving on Club Med, and it's also getting more popular in H1. And our CFO has already elaborated our revenue. I do not want to repeat it. Well, in China, we can see the recoveries. And also, the growth in China is very robust. And recently, the indicators have already been proved and reaching a new height. So we're accelerating efforts to develop the touristic destination program. Atlantis, for example, it is like a role model as a touristic destination. Finally, it is through those very attractive touristic destination projects that we managed to drive a sea traffic to drive repeated arrivals for our customers, and hence, we can build brand loyalty. As we do that, we will continuously enrich our product lines with tourist products, the shopping, leisure and entertainment, the integrated model, we create multiple products. On our, let's say, wealth sector, the finance and insurance business serves as the overall basis. So on top of the finance and insurance business that we integrate with other assets, so with innovation in mind, we can have a bolt-on effect, integrating those pieces within our ecosystem. So first, the financial sector, especially the insurance business and our investment capabilities that we managed to build on our investment capacity. Then in terms of smart manufacturing, the hive property, and we form very strong basic property capabilities which will lay a very solid basis of asset allocation and investment portfolio for the long-term development of Fosun. The H1 this year, Peak Re, Fidelidade, our financial and insurance as a portfolio of businesses, those are securing very positive performance. And based on our insight into the Chinese and Asian markets and with our global presence in the networks, we have the global financial institutions. And with the support of our investment network capabilities, we are good at looking for those quality underlying targets of investment with a high potential. Regarding industrial development, Nanjing Steel, for instance, we support Nanjing Steel to acquire those upstream and midstream players on the value chain, companies like Besino Environment. So in the bucket of smart manufacturing, in addition to Nanjing Steel, we have Jiewei Power, FFT, Besino Environment. Those are a whole host of companies within this sector that can continuously promote technological innovation. On the downstream, we're continuously expanding our customer base and the channels. As for auto industry and municipal affairs industry, we're continuously building our projects as well. In terms of insurance and the person care industry, yes, indeed, we have wonderful synergy. It is through Pramerica Fosun and Fosun Care Star Castle. And it is through Fosun Care, Pramerica Fosun managed to secure 143 tickets sold. And with this premium income of like CNY 350 million premium revenue. So cumulatively, we have achieved over CNY 500 million of insurance premium income. So this is like a complementary -- mutual complementarity that we managed to achieve between Fosun Care and also Pramerica Fosun. So that's it for my presentation on industrial ecosystem.

Thank you, Mr. Chen. The next is Mr. Xu Xiaoliang, the Co-CEO, who's going to talk about the fundamental support on the bottom layer of our structure.

So our on-site dear investors, we have around 130,000 online viewers, those investors and reporters were showing great care for Fosun. Thank you very much for the care and support you put for Fosun growth. So on behalf of the management, that in the next decade, our aspiration is to become a great organization. So I'd like to introduce to you our journey. Fosun Group, it's fair to say that right now, we actually want to serve the global households and families, so we want to boost their happy lives. And the core drivers are going to be around 3 parts, namely health, happiness and wealth. We have like a 10-year goal, which is very [ lengthy ]. Right now, we are serving a customer base of close to 300 million. And in decade, we hope that we can achieve the goal of serving 1 billion family customers. But in terms of operating revenue, we can keep it at the level of CNY 1 trillion and with the profit scaling at CNY 100 billion. So with those mission and vision, we can fully pursue the greatness and serve those 100 -- or 1 billion family customers across the world. And we also want to leverage those opportunities in the area of the IoT and AI area. And we aim to create a 1+N ecosystem model for global family customers based on the lines of happiness and wealth. And we can create the ecosystem. And as a matter of fact, along different industries, we have those vertical ecosystem presence that we can add up those multiple verticals. So finally, we can create a happiness ecosystems with 1+N. I think that it is [ the 3 things ] that determine the ecosystems. And the ecosystems empower the [indiscernible] growth as well. So we have those wonderful industrial groups under the FC2M ecosystem with great brands and extraordinary products. So the core strategic pathway of Fosun is to turn the industries into the FC2M industries. F stands for 2 things: first, Fosun; second, family. That's what the letter refers to. In the journey of a C2M, on a C end, everything we do begin with the customers. On the M side, we have the product innovation, smart manufacturing through flexible link as well as universal digitalization. So products, customers, employees and management can be digitalized universally. So we're going to close the loop in organic fashion. In every industry that we lay eyes on, we need to leverage the methodology of C2M in our practices. In Fosun, we'll also lead the development model of C2M. So within the bucket of FC2M, the core of the core is to align with products. It is hoped, based on our past trajectory of 28 years of development going forward, we want to create 3 types of ecosystem products. First, the so-called physical reaction type because, through FC2M, we already have a lot of seeding projects for which the seeds have already been sown, right? But going forward, how can we achieve 1 to N, how can we build the critical mass. And now we already started the 0 to 1 journey. With the seed sown, how can we achieve the critical mass? For example, like the noodle product at the Yuyuan, the Song He Lou brand, 13 stores already opened. For each store, the annual revenue is CNY 10 million. So that noodle product is great product. How can we scale it up, right? For example, from 13 restaurants to 300, then you do the math. With each revenue, CNY 10 million, then the total revenue will be CNY 3 billion. The margin is like 30%. Then the 300 restaurants will contribute the net profit of CNY 1 billion. So we need to achieve the critical mass. Once we achieved the 0 to 1, we need to scale it up from 1 to N. Then we have like [indiscernible] inflows in Pharma and also the monoclonal antibody, a new drug. We can apply the same thinking. We need to focus not only on the quality but also quantity and to achieve critical mass. So for those products for which that we have already built a certain quantity, then we need to make sure quality can be guaranteed as well. Like the Lao Miao Gold, right now, the sales revenue is already CNY 20 billion with the 3,000 franchised operators and stores nationwide. For each 1 percentage point in net margin we achieved, then that equals to CNY 200 million contributions. So from a 1 to N, we need to cover both fronts, quality and quantity. If we have the quantity already, we need to focus on quality enhancement. Then second, the chemical reaction type, meaning between different industries and amongst different products, how can we achieve BD within Fosun ecosystems. There are many of these type of products already like the Health Plus insurance, Health Plus medicine and Health Plus insurance. At the Fosun United Health Insurance, we've launched, for example, [indiscernible] insurance category targeting chronic diseases. Horizontally, the pharma, health and medical, those different industrial resources, we aim to integrate horizontally so in order to achieve chemistry, that chemical synergy. A third type of products are those ecosystem-type products, say, how can we better connect the industry with a city. The industry town integration, after 7 to 8 years of development, there is a batch of those hive projects that are born, say, BFC, where we're now located on Bund, Shanghai. In the [ Event ], which is a cultural landmark in the Sanya Atlantis, which is a tourism hive landmark. In terms of innovation, in health care, we have a large number of hives and property projects combining multiple industries, including a link between industry and a city. And so we can better and organically combine lifestyle with important work. So those are some key products that we aim to shape within FC2M framework. And there is an investment DNA in our blood, so we have the twin wheel driver model. Investment is a new means to achieve the end, namely to help those industries to integrate resources across each and every value chain. And we cover primary market, secondary market, industry acquisition as well as the Hive City development. So we can achieve those math in a rotation effect. Then there is also investment in research systems. This year, we've put together the FC2M Fosun Industrial Research Academy or Institute so that with their work, they can take the lead in driving forward to achieve the C2M efforts. The globalization of Fosun, especially under the pandemic circumstances this time around, the internationalization capabilities of Fosun are well proved, and our value is well embodied. How good we are at internationalization, I think we can make contribution to the whole nations going global. So in the next decade, we put forward the twin-engine strategy. On the one hand, we already have global presence in different parts of the world. This is an engine. Second, there is domestic circulation within China because there is a huge market domestically. This is another engine, right? So the twin-engine strategy in the next decade. We have the global engine CEO and also the China region Co-CEOs. So in terms of product R&D design, our channel, supply chain in this country, we hope that we can close the loop within one of the engines, the domestic engine. And plus, we have the global engine, so the dual engine model, which is going to be an important strategy going forward. And of course, the key lies with organization in order to achieve those transformation. Throughout the past half year, let's say, the organizational structure and the lineups have been upgraded comprehensively. On a top level, we have the Co-Chairperson of the Board. We have 2 Co-CEOs. We also solidified our CXO functions. So at each function, we have our CXO to be the owner. In addition, horizontally, the various industries of Fosun are synergized. We have 7 industrial committees. So for real, our organization right now achieved like the horizontal and vertical synergizing and integration thoroughly. So with this organization, the next key piece is people. Starting from 2016. We had 18 global partners that year. Up till now, we have 50 (sic) [ 57 ] global partners based in different parts of the world. Furthermore, we have 278, those partners located at different functions and the levels of organization within Fosun Group. And we are going to launch the partners on different domains like in innovation, in R&D, in craftmanship, so on and so forth. So those function-level and domain-specific partners will be launched. So with those partner network that we can actually unite our efforts within Fosun Group in an efficient manner. And under the pandemic, we seized a very important opportunity in terms of the mechanism development. So that mechanism of a wartime state, so the wartime mechanism that we clarified during the dynamic from the top level to various industries, in various product lines. As we forge ahead, we need to fight the battles to address those pain points. It is through battles we fight to train our teams and measure their performance. So on the top level of Fosun Group, on May 15, we have important battle targeting global families. Then come September this year, we're going to have important battles targeting Fosun global supply chain. Then come CIIE, China International Import Expo, we're going to have a global battle targeting other industries. Then we have a new tactic to fight the battles launched by [ Fosun University ] to help various industries to shape their presence through different battlegrounds. And again, we fight those battles, and we train our people. So thanks to this mechanism, we've clarified we need to come up with the ranking. The rankings of the 2 plus 7 plus 1. And we have the timely job rotation and switching of different roles in the organization for our talents. What matters more, we look at the near term, middle term and the long term. And we have the entrepreneurial system, so we have much the inner entrepreneurial teams. So they work with one another with the help of our partners. So this is like the mechanisms and institutional support. So for a company, externally, you look at the company's products, you look at this personalization internally and you look at the mechanisms they put in place in the long term and if you look at the culture of the organization. So throughout a period of 28 years back, we've shaped our Fosun culture. The 8 things we focus a lot on in our culture, so the cultural values are deeply embedded in the DNA and blood of each Fosuner. So thanks to the cultural values, we are in a good position to pursue our great aspirations. So the cultural values, yes, we have already got our Fosun culture. We need to adhere to doing the right things, although they are hard to do. We need to do things, but it takes time to accumulate. To pursue the great dreams, a journey of 10 years, a key growth and a key point, I already completed introduction on. Thank you, again, for your attention. We are going to work hard to make sure we can meet the requirements and help you create value.

Thank you, Mr. Xu Xiaoliang. Yes, the presentation station has now concluded. Now we're going to start the Q&A session. We welcome our present investors as well as online investors. In case you have any question, please put forward your questions. Thank you. All right. We have a gentleman on the left side in white shirt, please.

Okay. Dear Fosun International leaders and classmates, I'm from actually the Black Rock -- Blackstone, sorry, in the U.S.A. And I'd like to ask you a question about internationalization of Fosun because, as we know, that in China, Fosun is one of the early-stage players going global with international presence and excellent performer. So for Fosun Global or International, and we have also seen the label of internationalism, however, globally speaking, we have also noticed, due to this or that reason, we haven't seen the process and deglobalization or even anti-globalization. And we have already seen some transformation of that trend. Well, for Chinese players, that's a huge impact. So my question is about the Fosun International's and the future footprint of globalization. Are you going to make any adjustments in order to cope with this direction? And also globally speaking, we have seen some mega trends. And how are you going to deal with this new trend in order to ensure the successful implementation of your global strategy?

Yes, Mr. Guo, please.

Yes. Due to difficulty of globalization, that's why the global enterprises are very rare and also important. And also take a vaccine, for example, without a global capacity, it's impossible to have this cooperation on vaccine. In the end, co-vaccine, who is able to be successful in vaccine. And that is about the combination of 2 things: one is in innovation; and second, it is also about the cooperation with global players. In the end, you can see Pfizer and then us in front. So you can see those companies with a global capacity, they are able to be successful in vaccine development. And because also like biotech, it is a cooperation with these innovative companies. And also in U.K., we also have VC investment. But in the end, they show how to work and join hands with global partners. Globalization is very difficult. Because it is difficult, that's why it is valuable. Second, for China, and we have a very few companies who are able to operate globally. Actually, we have blazed the trail in the world stage. So we have both the success and failing cases. And the recent where you can see some maybe bad news because it's always easy to communicate the bad news, like Folli Follie or Thomas Cook. However, we have even more success stories. If everyone says that and U.S.A. -- of course, I'm going to say that we have some failing cases. But everyone is talking about our failing cases, but I have to respond by saying that the majority of our cases are still success stories in the regional development going to global expansion. Of course, there will be some lessons, sometimes a very bloody lessons. And actually, we are blazing the trail. But now I would like to say a few more words. And because sometimes we talk about an investment flows and insurance sometimes we said and we -- China's momentum flows and the global resources. And sometimes we try to follow the Warren Buffett. Now we talk about industrial operation. Some people are thinking that it's a little bit confusing. But if you have a second thought, our logic is always consistent, our Fosun vision is always an industrial group. We hope that, and thanks to Fosun, we can make a difference. We want to provide more services. And we are going to work on this industrial group, we have different priorities in different phases. And so that's why in different time lines, we have different priorities. In the past, we always say that investment plus industrial operations, we have twin drivers. So maybe over the past 6 or 8 or 10 years ago, we put more emphasis on investment. Why? Because thanks to the years on investments, we are able to quickly set up our global network very quickly, and we are able to own very robust and industrial foundation. Without investment in the past, how is it possible for us to set up our travel, our pharmaceutical sector. Without the good investments, how can we come up with a very strong foundation of our health care and the pharmaceutical. Because we want to do ourself as a big company, the global consolidation is also quite important. So that's why on top of the investment, we were trying to combine the global resources and the China momentum. And then why we follow Warren Buffett? One is value investment; and second, insurance plus insurance. This is a very good business model. But now why we try to switch to industrial operation again? Because we have completed our global presence, and we have completed our industrial presence. Our global presence is already there. It's done. Now we have to come back. Now we can go back for the in-depth operation. It doesn't mean that we are not going to make an investment. So it seems that we are doing something, doesn't mean that we are not doing something else. I have to reiterate, investment is still very important capacity. What's the purpose of investment? Because we want to reinforce our industry. We still want to do the investment, but the majority, the core highlights will be switched to industrial operation. Investment, it will still be done, but it's going to reinforce our industrial operations. The insurance plus investment is still there because for this business model, it has already been internalized into our capacity. Insurance plus investment will also become a booster. And for our industrial operation, take the health care and insurance, for example, for some chronic disease patients, we can provide them with the insurance. And also for those with cancer, because we have the medicine, we can also provide these patients with cancer with the insurance. Together with our health care, then we can have better synergies. The insurance plus investment and insurance plus industrial are already internalized into our mega industrial operations. It doesn't mean that we are going to ignore them, maybe in different phase, and maybe we'll focus on one thing. Maybe it is too impressive. When we change the priorities, maybe our investors here are not adapting themselves to that. Yes, maybe I'm not a very good storyteller so that's why I want to add something. We are always very clear. Because in each time line actually, we haven't ignored them for insurance, and it is always a very important component, the investment plus insurance and insurance plus industrial operation. And globalization is already internalized into our own operation, and we are not going to ignore globalization. But actually, the regional expansion is not our priority more. For us, the focal point is industrial operation through the past years. And maybe I want to say something more about our R&D and product and the power and from 0 to 1 with my position on that. It doesn't mean that others are not important. Because we have completed other capacities, just like incubation, we have completed our framework. Through this point, in addition to the R&D and the power of products and from 0 to 1, and now we put more emphasis on the power strengthen of [ baseline ]. Now we want to grow bigger. We want to grow our scale from 1 to 10 to 100, like [ Mr. Huang Zhen ]. And he was working in the cosmetics industry in Jahwa. And under his leadership, now the cosmetics business is growing very dramatically like [ AHAVA ]. And at the very beginning, the focus is on the R&D. Now production, the production and scale, a larger scale and maybe one product in maybe CNY 6 billion. And then maybe we can capture the CNY 2 billion or CNY 3 billion out of this CNY 6 billion market. So in the whole process, we have different focal points or priorities. I mean the overall market is still there. Because we want to become a good enterprise, making contribution to the society, our purpose is to satisfy a large ecosystem. And now it is also clearer to be specific in the targets. And to this point, after the globalization, now we want to go deeper into the industrial operation with a multiplier effect. And naturally, it is still a very difficult time, but we are very confident especially after we make a breakthrough from 0 to 1 and we're also growing very dramatically. And I have also seen some questions by the analysts and feedback from the analysts. So I think today, I'm trying to make the investment communications with you. Thank you for listening.

Thank you. Any other question from the floor? So the gentlemen in blue sitting in the back.

Fosun leaders, I'm with [indiscernible] Asset Management. I also have a small question. Maybe Mr. Guo and also other senior executives. Maybe we can introduce for Fosun International, how about a strategy for dividend for the institutional investors? We are very keen on that especially in the Hong Kong Stock Exchange.

This is a very good question. For Fosun International, first of all, and due to the pandemic and other considerations, this time, and we are going to not distribute any dividends in the midterm. But you know that since 2015 and '16. And in terms of dividend, distribution is always growing in 2013 it was [ $12.90 ] and more than [ $20 ] last year. But this is very special. But I don't hope that you treat this year as a very extraordinary year. But this whole year and also going forward, our financial policy is to ensure a very stable distribution of dividend, then buy back, full buyback. Actually, we are always doing that. So maybe you're not familiar with some of the numbers since 2016. And based on the compliance and actually, we are doing the buyback since 2016 every year, HKD 270 million. And then in 2017, HKD 400 million, and then HKD 800 million, then HKD 15 billion. And now we have already spent HKD 370 million for the buybacks. So at an appropriate time and also at appropriate prices, we will continue and to do very big buyback in order to protect our shareholders' interests. So for Fosun International over the past several years and also in the future years, we have a very prudent financial policies in terms of buyback and dividend in order to ensure the return for our shareholders.

Well, this lady.

I'm with Citibank. Just now Mr. Guo shared and also portrayed the picture and ideal and passionate picture with us. And I think this is a very great blueprint. And I have 2 practical questions. First of all, in the interim report, and we have still seen the impact due to the pandemic in the future. And for our senior executives and for the Fosun's growth in the future, which areas we are going to see a better performance? And the second question, and you can see Standard & Poor's and also Moody's rating, they have a change in the rating of Fosun International. So it will also affect your future cost of financing. And how about the impact and what's your future financing plan going forward?

A lot of questions on the financials. And well, during the pandemic period -- and our CXO and the CEO and the Chairman have already give us the introduction. In the pandemic period, Fosun is demonstrating a very good resilience, and we try to seek opportunities out of crisis. Thanks to our globalization and the profound industrial operations, we have seen our strength and talking about the opportunities out of crisis. And we can see the online consumption by the consumers and their families. And this will be our core logic: to go online. And then in the future for our industrial operation, what I can say is that we build for our Fosun International for all these business sectors in all the marketplaces from China. And also, we are going to see the strength coming out of China to the rest of the world, for example, the consumers and especially the recovery of the consumers and also for the food and beverage,and restaurants. And although it is impacted, it is going to pick up. Take anybody for example. And in July and in August, take Atlantis Sanya, for example, and we have very good result, the record high in August for Atlantis Sanya for the day revenue hit. And CNY 8.5 million we have just in 1 day revenue for Atlantis Sanya. So thanks to the increase and we have a very healthy business model, I think pandemic is just very part of the story. And also for the health products, we try to continue to move forward. Take the health and insurance, for example, in terms of the health care insurance and premium, it rose by, if I'm correct, 70% to 80% on a year-on-year basis. And also based on the family and online business, we have also launched the online family insurance program. And the [ Fosun Happiness Plus ], we have more than 1 million subscribers for health care services and insurance,and also for other business lines. And then you can see we continue the growth. And also the governments have also launched some stimulus packages for the pharmaceutical, for the financial infrastructure in such a -- particularly the Hainan free trade port, as mentioned by Mr. Xu Xiaoliang. And you can also see the Hainan's new policy for the free trade zone. And we are also going to see the new growth drivers for our development in Hainan. So you're going to see the growth opportunities in the past. At the same time, you mentioned S&P and Moody's and the rating. Well, I think I can also give you some numbers. First of all, for the Moody's, according to their rating, well, I think that their perspective -- their judgment as compared with ours, they are more pessimistic. But of course, we can understand they're a Western rating agency, and they are actually in the center in the pandemic right now. It is understandable for them to be very pessimistic. But they fail to reflect or take into consideration the healthy business in Fosun International. Take an S&P and also Moody's, particularly for Moody's, they downgraded the rating. Because for S&P, they still give us the stable rating. After that, then we have also issued the bonds in the open market, you can see the price. So you can see, if they are using the real money to make investments in the bonds, how do they think about their rating? You can see that our prices remain stable when we issue the bond in the open market. So you can see the pessimism. And you can see the gap between the pessimistic attitude and also the real market. Well, for our future financing plan, first of all, you can see over the past 6 months, you can see the cash on the book grew a lot because in order to cope with the pandemic, you can see that we have an increase our cash reserve. In order to increase the cash reserve on our hand, we can consolidate our cash and foundation. And also during the pandemic, we have seen some new growth opportunities. On one hand, you can see that there are more and more family consumers go online. And on the other hand, we have also seen some opportunities for M&A and also catch up with others in this pandemic outbreak. We have also find some targets for acquisitions, for example, for our Yuyuan Inc., invested CNY 0.5 billion and we have acquired 29.9% shares in Jin Hui Liquor. So this is a very systematic acquisition. Thanks to the acquisition in food and beverage industry, we have a new component, and we have also boosted our systematic capabilities. So in the future, for the cash management, we are going to find more opportunities for M&A. And also for the cash and debt management, another part is to push our subsidies to, for example, have a better dividend. And also for the majority of operations, it will be supported by the subsidiaries and also for our fund management platforms and also our insurance companies to complete lease financing. So as mentioned by Mr. Guo, because the investment capability is very important component to close the loop, so our investment will continue to be focused on the current factors and geographies in order to control the shareholding. And in this regard, we are continue to improve our industrial operation, thanks to our existing investment capabilities. And also for our liabilities, we'll continue to extend our duration in order to minimize the cost of debt. You can see that it is only 4.7% for the debt ratio. And also for the USD and bond, amounting to USD 600 million with a 4-years duration, so you can see the cost, it's only 6.7%, it is even lower than our expected by 20 basis points. And when we issued 600,000 -- USD 600 million, so you can see that it has already go up by 5.8%. Because on our original plan, it was only USD 300 million for the bond issue, but it has been doubled. So for all our subsidiaries, you can see that we are continuing to improve our debt planning in order to serve our industrial operation, and hopefully, I can answer this question.

All right. We have a question from the other side.

Dear leaders, I'm from [ DongWha Pharm ]. My name is [indiscernible]. As Mr. Guo mentioned about the status of the vaccine, I've got 3 questions for vaccine, our dear executives. First, Fosun with BioNTech, for Hong Kong, Macau, to offer 10 million units of COVID vaccines. What about the China Mainland supply of the vaccine? Is there a quantity estimate? How many? Second, so the clinical trial in China, it is 162b1. But overseas, it is actually b2 product, right? According to my observation, the b2 safety and cellular reaction is superior to that of b1. So for b2 product, will you refile or reapply for b2 product with a Chinese regulator? What will be the future marketing expectation for that product? Third, the BioNTech COVID vaccine, what is like the project progress?

All right. Let me respond. Hong Kong and Macau has announced the quantity or intent -- letter of intent announced yesterday. It was already released, the quantity of supply. What about China Mainland, the efforts are still underway, so we do not have a fixed quantity yet for Mainland. But there is one thing that is for sure, the population of Hong Kong and Macau put together is 7 million. We've got over 20 million population in Shanghai and a similar population size in Beijing and other big cities. So for -- on China Mainland, the overall demand of vaccine for which we are very confident. If globally, once there is international breakthrough on vaccine trials, if we look at the U.S. government, they've already placed orders with 3 suppliers, right, with over 100 million units. And Japan placed an order to the tune of 120 million units with BioNTech. And the U.K. has placed a huge orders with the quantities that are twice or 3x of the population size of U.K. And the attitude of governments across the world, including that of the German government, they lean towards using vaccine for protection and to reopen and restore their economic growth. This is for sure all governments aim to achieve. But for specific quantities of supply, we cannot jump to conclusion for the time being. Second, b1 and b2, the 2 products of BioNTech, their products, there are first [ waves ], as a matter of fact, which I'm sure you may know about already. The first [ wave ] include b1 [ wave ] and b2. For our China clinical filings, we have to apply for one [ wave ] after another. It was b1 that we completed filing earliest. If you look at Phase I clinical data, which started the trial in March in the States, their clinical Phase I data was released. Then upon comparison between b1 and b2, so they launched b2 for Phase III. But in China, there is no Phase III clinical trial condition. So going forward, of course, the b1 Phase III will not be done. The Phase I of the b1 is still ongoing in China. And the b2 clinical filing is still in the progress. Of course, we're going to align our efforts with the rest of the world of the b2 filing going forward. Then what about the overall progress, you need to look at the synchronization with the rest of the world. The clinical trial, it is estimated it will be concluded in October in the United States. In China, with NMPA, CDE, we're still having dialogue with the regulator in China. But basically, we will follow a similar timetable of the global, then we can make some small fine-tuning according to the China local regulatory requirements. But basically, we're going to get aligned with the global progress.

All right. We've got one more question from the gentleman in blue shirt.

Dear executives, I'm from [indiscernible] securities brokers. I've got a question for intelligent manufacturing. Because relatively speaking, there is like industrial wastewater, flexible manufacturing and EV batteries. So I wonder, in the sector of intelligent manufacturing, what is going to be the future planning of a Fosun and FFT project? What is the future outlook? Is there any technical barriers or know-how it enjoys? And what about future IPO plan?

All right. Let me respond. First, thank you for your questions. First, the core strategies of Fosun is FC2M. It is the core strategy. In addition to C and M, it is the intelligent manufacturing that is essential. In addition to the C side and M, because we are innovation-driven, to provide services to family customers, so the intelligent manufacturing is part and parcel of what we do. FFT, we invested in, is a global leader in providing smart manufacturing solutions. It is a state company based in Germany, a worldwide leader in this regard. So in the past, it was mainly focused on automobile industry and aircraft manufacturing industry. And we made investment in this company. We support its global development. In addition, we also support FFT to achieve business development in China. So as we do that, we adopt a dual-engine strategy. What about it? For instance, originally, the R&D the talent -- although, of course, by the way, the customers are globalized, the sales are global, but their R&D used to be combined to Germany in the past. But right now, in addition to Germany, we aim to solidify the global R&D talent. We have had the Jiading manufacturing center or base that we're building. And not only are we going to build those manufacturing but also R&D activities. And we want to make R&D more efficient and cost effective to reduce the cost of the production as well in order to make the FFT and Fosun more competitive. And from the Fosun perspective, as I alluded to already, for each production line in a product line, we need to do the same thing, namely transformation toward intelligent manufacturing and to build its capabilities. Therefore, FFT has already begun to work with our pharmaceutical portfolio of businesses, in gold and jewelry portfolio companies and those companies within the happiness sector with manufacturing muscles and also partnering from within Fosun Group with Nanjing Steel as well. But in addition to those internal partnerships within Fosun Group, there is external partnership as well. For instance, you mentioned like EV batteries. We are strengthening external cooperation as well in addition to the internal partnerships. FFT is making efforts to [ strengthen ] like those product lines. And we want to improve the capabilities of Fosun smart manufacturing. If you look at Nanjing Steel, we already got a smart plant for Nanjing Steel. With the same capacity level, now we only need 10% of the labor that used to be needed. But now we reduced the labor requirement by, say, 90%. We've already built a role model, a template kind of a shop floor that smart factory at Nanjing Steel. Third, let's come back to FFT. FFT is a technology-based company. Going forward, yes, the direction to go is to get listed on a star board, for instance. But what would be the specific point in time of the listing, we're not in a good position to review the specifics now. But you can watch some of the progress of the timing, of the change, of the real control person, right? We are working hard for future IPO. As per those legal procedures, the efforts are ongoing as we speak. The next, well, still, the smart manufacturing sector. In addition to FFT and in addition to our industrial chains, there are some other topics like EV batteries you spoke off. We're making active efforts. Say extraordinary EV battery suppliers globally, we are partnering with those suppliers. Thank you.

All right. We have a lady in blue shirt, please.

I've got a couple of questions. First, about Hainan free trade zone, there are a whole host of new policies promulgated. I'm sure Fosun has a strong footprint in the culture and a tourism sector. So dear executives, what will be the future plan and investment plans in Hainan? Second, the happiness sector, as we know, in terms of the products, you've got different product lines and brands. You've already did a strong lineup of those products and brands. Can you achieve more synergies across your different products and brands within the happiness sector? Are you going to launch some new product lines or make some investment in launching newer products.

All right. Thank you. The Hainan free trade zone, yes, there are very important policies that are promulgated previously. We have been deeply rooted in Hainan in our operations. We focus on 3 dimensions. First, according to our planning, all industries of the Fosun Group are producing strategies for Hainan presence especially. Regarding our financial investment, industrial investment, yes, we are making a lot of hard efforts for future strategy making and planning. And we've already got some companies that already have a presence in Hainan. You need to accelerate -- but we need to accelerate our efforts like Foliday, Atlantis and Club Med products. So on the one hand, we need to upgrade our product from version 2.0 to 3.0. On top of what Atlantis already have. And we're talking about upgraded version, like a [ Foryou Town ], the version 3.0. In light of the free trade zone and policies associated, as a duty-free is a popular concept, and our portfolio of companies are applying for a duty-free license actively with the regulators. Right now, we are partnering profoundly with those companies with a duty-free license as well. Hainan Mining, we're deeply rooted in Hainan for Hainan Mining, so the trade in those operations and on the mining sector are developing as well. Then we hope we can achieve the clustering effect across multiple sectors and industries in Hainan because different industries aim to serve those family customers, right? We definitely have room for synergizing. Especially we want to build a tighter tie between tourism and health on top of the traffic and networks we've already built. So health and the senior care and tourism, those different pieces we want to connect with synergy to be achieved. Yes, as we mentioned, we are trying our best to build dual engine, manufacturing and R&D. We can extract more synergy, capitalizing fully on the policy of dividends. Thanks to the free trade zone initiative in Hainan, we're going to expand our deep operations there and continuously shaping our product strength and competitiveness. Let us zoom in on happiness sector. Yuyuan is a brand driven after 3 decades of efforts. And in recent couple of years in particular, there has been restructuring and strategic iteration of Yuyuan. And we have completed our layout planning, and we have already built our presence with the seed brands in different battlegrounds. We've got the [ DJULA ] and also the Seagull Watch and Shanghai Watch. Based on, let's say, food and also clothing, travel, within the Happiness sectors, we not only focus on quality but also quantity. If we already got the quantity, how can we enhance the quality? So we need to walk with 2 legs. And for sure, there is room for more synergies to be achieved as we make efforts along the way. A case in point, like the Chinese Valentine's Day, which took place several years -- several days ago, we worked with Baihe dating service and also Lao Miao Gold. We have this online and off-line collaboration. We seized those opportunities from the Chinese Valentine's Day, and we have achieved very positive results. So based on tourism, holidays or game, I'm sure those different battlegrounds, we will continuously expect more synergy based on good products, those with high gross margin. Thank you for your question.

All right. Finally, we've got one more question from the gentleman at the back.

My name is [indiscernible]. I'm from [ Zhao Xi Investment ]. We're a PE fund manager. I've been interested in Fosun for years already. I've learned a lot from Fosun's practices in the years in the past. I really adored the great vision and strategic capabilities of Fosun. In the recent 3 years, centering around the concept of deep industrial operations, Fosun has scored very great progress. In recent couple of years and this year in particular, great progress you've achieved. Congratulations. I used to work with Danaher. In terms of operations and organizational management, yes indeed, I think you may refer to some of the Danaher business system experiences. So congratulations, you've come this far with positive progress you've achieved. But in terms of market cap management, what factors do you consider there? I mean in addition to investment and the fundamentals of your company, you may also consider the factor of the value realization or value actualization, right? So market cap management, is there any thoughts you would like to share with us on that topic?

Yes, this is a great question. We'd like to respond to this question. We have 3 focuses. First, like Mr. Guo mentioned, we aim to become a great company. And through the products and the services we provide, we want to change the society for the better by bringing about health, wealth and happiness for each and every household. So Fosun International is the core product we have. But the product is not enough. We also need communication, right? Then for market cap management, as far as the recent years are concerned, on this topic, we're reflecting, and we're making progress. Our strategy layer, implementation layer, we need to interact more and more with investors in the market. There are several points I'd like to highlight here. First of all, in terms of the frequency of communication and the way to communicate with the market, so you can see we are making evolution for Fosun International and also for our -- when we have [indiscernible] from our IR department, our investment relation department, and you can see we have more frequent and more dynamic interaction and communications with our investors and shareholders. And based on our strategic positioning to build ourself, finance and innovation driven and family consumer group, it's not just about the financials. So we have considered to have more communication in terms of the product and services. So this time, in addition to our CEO and our CFO and also CTO and also our Partner Committee and also CHO, and in this announcement as well and also this afternoon, we are going to have different topics about smart manufacturing and also innovation and product and also asset management. And you can see that these senior executives in charge of different business lines will also give us some more presentations in the afternoon session, and then you can have a better understanding of the whole picture of all our business lines. So we want to have more communication. And next, we would like to have more communications with the shareholders from home and abroad and also from London, Singapore, New York. And we would also set up our investor relationship centers. And with these and international investors, especially we want to have more communications with the different types of shareholders, so whether you are a PE or investment banker or smaller financial institutions, so other types of investors. And also next, based on our internal improvement, we would like to continuously communicate in our day-to-day progresses. We don't want to wait until 6 months or 12 months to announce the results. Now we want to have more dimensions of communication channels. So for our shareholders in the future, we want to have some communication plan on the product and power. And also, we want to have some day-to-day communication and approaches. And also next, for our financial policies and dividend and also buyback, for those on market cap management, over the past several years, we will continue to keep these policies for the buyback and dividend. So this is what I would like to say.

Let me add a little bit. For us, we hope that for our Fosun International, based on Mr. Guo and other senior executives said, for our future directions, we are going to be centered on family consumers, and we will continue to go deeper into industrial operation. First of all, the performance will continue to be improved, thanks to the efforts by our all staffs and also partners. And now we've already seen a lot of breakthroughs from 0 to 1. We will continue to accelerate from 1 to 10 to 100 and even more. And recently, our CFO and also [indiscernible] and based on all the compliance and somewhat good data and data and indicators will be better communicated because the numbers can talk. We want to communicate more numbers to our shareholders, investors in the future. So this gentlemen in light green T-shirt.

So I have question which are very specific one. Because recently, and you have a controlled and also Jinhui Liquor. So what is your core logic to acquire Jinhui liquor? What are the resources in Jinhui Liquor you can leverage here and because I'm a retail investor because for the wine and the liquor. And of course, we can see so we have a different culture dimensions and around the wine and liquor, because for Jinhui Liquor and in terms of brand and empowerment is -- what resources Fosun can empower to Jinhui Liquor? And what the benefits does Fosun can provide Jinhui Liquor?

Yes. Thank you for your question. For Fosun, and after we have upgraded our strategy based on the family consumers, we want to put ourself in family-consumer group. Well, you know that for the families, particularly for the Chinese families. The wines and liquor are very important for Chinese and family consumers. So we think that the wine and liquor will be very important to replenish our product mix. Take the liquor, for example, can help us to obtain the loyalty and viscosity for consumers. And liquor, in China is a very important at culture founded day because now we are advocating the right on Chinese traditional culture for the Chinese liquor and also compared with the brand development of it. They are quite aligned with each other. And maybe we can go back to its product to power. We have also do the DD Jinhui wine and liquor. And actually, in terms of quality and also the team management and also operating capabilities, and we really recognize that. Because Fosun and we are always trying to upgrade our industrial operation capabilities. And we believe that the north, west part of China, which is a very suitable place. And in North western part of China and the Jinhui Liquor has seen a very strong capability of operation. Also the capabilities to make improvement. And we have also invited some experts to evaluate the liquor. And also the results also well received. And I don't know whether you have drunk Jinhui Liquor. And for the 28 year, Jinhui Liquor and a lot of people I would like to take it again. And also, after the integration of Jinhui Liquor in to Fosun, and I be that we are able to empower Jinhui Liquor in terms of improvement on the quality and the packaging and also regional expansion and also in terms of the product diversification. So we believe that we can have the enabling power [indiscernible] in the liquor. And I think we are quite aligned with the each other that we can also empower each other. Thank you.

So for me. I would also like ask a little bit. And I told them you cannot increase the sales volume so much. Why not?

Because for liquor, especially for liquor, it takes time. The increase in production output, it takes time. And I request them not to increase the sales of our too much because if you increase the volume too much, then the quality will be compromised. For liquor, it's different from others. And if the output goes up too much, and then it is not good for the quality. And we cannot let the consumers to buy the advertisement that they are buying the liquor. So we cannot make investment on the advertisement too much. Because why there are so many failure cases in the liquor because you are paying for the advertisement, not for the liquor. Sometimes we can see so many advertisements on other brands on liquor. So the consumers are paying for the advertisement, not for the quality. So this is what we want to do to improve the quality. Another answer, it is about the market cap. Yes. I feel very sorry for that. I feel very sad about the market cap because we are working very hard, but sometimes it is painful when I see the market cap. Sometimes -- then I was actually a live at a loss. We are making a lot of improvements, we're making efforts. But I think the patience matches more. Because if you want to change something because you are making efforts and more and more. But sometimes you are not recognized that, but maybe one day, and we are going to see that. And also for [indiscernible] insurance, they also had a very painful experience. They have very good performance, but the market capital was not very good. And Mr. Ma from Ping An Insurance was also anxious. But all of a sudden and the Ping An Insurance was recognized by the capital market. So that's why I say that I was feeling people sometimes, but as an entrepreneur -- but -- what can I do then continue to work. So we always give us a reminder that you have to do the right thing to do the difficulty thing, to do the things which requires and time for accumulation. Once we are to the point of accumulation and then we are going to see good result. So let's be patient. I think it will be very quick. We are making the strongest efforts and we keep working hard, and I believe that we are going to see a good day. Okay. The final question. The gentlemen in yellow shirt.

I have one more question about the innovative drug because for the innovative drug and also for the medical diagnostic equipment and also in your interim results, we can see that they are a very good products and then for supporting your business. So for Fosun Pharma and how do you think about your future planning for the innovative drug? And the second question about the intuitive surgery. So do you have any risk kind of the renewal of intuitive cooperation?

Well, this year, due to the pandemic for the innovative drug and also for the medical diagnostic devices, thanks to the past 3 to 5 years and efforts and also the national policies are also promoting the pharmaceutical industry to be more innovative. And naturally, we also have this and planning exactly to be more innovative. In recent years, and thanks to the government's national policies. And we have seen the acceleration of the innovative drugs. And due to the pandemic, and you mentioned about the medical and diagnostic equipment, they are all related with innovation. They are all independently developed. And we have developed in a system to quickly responding to the supply chain and innovation. And also for the R&D, last year, our investment on R&D was CNY 3.6 billion. And you can also see the investment in R&D in H1 this year grew by 25%. We will continue to keep the growth rate for the R&D. And of course, the top priority is always the innovative drug. For the innovative drugs going forward, and the focal point for us, and will be given to the other large molecular drug and also the cellular therapies. And also for the small molecular drugs, how can we become one of the first-class and want to create more values. And of course the large molecular drugs. And we have also seen more probabilities compared with small molecular cellular therapies. And based on our previous VC investment across the road, and we will try to find relatively world-leading technology like CAR-T and also mRNA. And at the same time, at the same time, in parallel, we have to maintain dependent R&D as well. In those latest and also highly potential projects, and we want to have the lowest risks because a totally pioneer in domain. If you want to make innovation independently, yes, it's going to take 5 to 10 years. It is very long. And also the risks are also very high, if you want to do from the scratch. Well, in the future, well, there will be different business models, and for the surgical robotics and also the high-value generic drugs. And then is the large molecular drugs and also the CAR-T cellular therapies, and we are going to see the contribution and also the innovation of the larger molecular. And also going forward, we will make further innovation on the smaller molecular and also for the Davinci and Intuitive. And our agreement with Intuitive goes like this. So starting from next year. The China's sales will be switched to our joint venture. And the cells already started in JV, and the benefits stayed in the joint venture in Fosun. But in the future, and we are going to follow the joint venture percentage that is [indiscernible] So anyway, then one more question.

Good morning. And with [indiscernible] Securities. And according to what Mr. Chen said, then I have another question about strategies for Fosun Pharma. And so we can also see that in the past and for the investment on pharmaceuticals is quite successful. But over the past the years of development and for the pharmaceutical business is also quite a diversified. It is also one of the reasons for the market CapEx -- valuation.

Well, at this point, at this moment, for Fosun Pharma in the next 3 to 5 years, and what's your imaginations? And how are you going to lead Fosun Pharm to the future? And also, globally speaking, for those bigger players [indiscernible] no giant can cover both the services and then also the devices and pharmaceuticals and other products or supply chain. So my question is that in the next 3 to 5 years in Fosun pharma? And where are you going towards? And also based on this topic, I have a second one because for [indiscernible] so grow very rapidly. In the future, for the pharmaceutical production, we will always be more innovative for [indiscernible]. And then under your organization and HR and also the allocation of resources, so are you prepared for the innovative pharmaceutical production in the future? So these are some other questions for you?

Yes. Thank you. Yes. So let me answer the question first. In terms of strategic direction, Fosun Pharma over the past 6 months, we tried to sort out our strategies. First of all, for the drug itself. And there are 2 categories. One is innovative one. And the second generic drugs. And for example, investment in R&D, amounting to CNY 3 billion, 70% for the innovative or the biosimilar drugs in the future, the percentage will rise, and for the innovative drugs and its pipelines. And also, based on China innovation to global market has also been transformed. So we need to evolve, and we have invited BCP Gizan firm to put ourselves into the global landscape and also take a look at the China's operation. So we want to sort out our organization structure. Second is generic drug, because for the Chinas and generic drugs, and also, we also have Gland Pharma, which is an excellent CDMO and also highly valued generic drug. And also in the United States, and we also have our own team for 05B2 team. And then we are going to make further judgment to see how we are going to nurture our competitiveness in the generic and drug market. So we are going to sort out these 2 categories, recently. And next and for the diagnostic medical devices or equipment. For the medical equipment, we already have some foundation. How can we create more values? How can we create our global footprint, and we're also going to sort of our organization. Then for the Medicare services. Well, for the pharmaceutical and also for the diagnostic equipment. Health care services will be different. So for the medical services, we'll be more independent. And for the medicare services, more about the health care insurance or the Internet-based insurance. And in terms of the benchmarks, we still have some, like Johnson & Johnson, except the medical services. Because for Johnson & Johnson, they have pharmaceutical and diagnostic equipment, and they are having the largest in the market cap for a long period of time, and we benchmark with Johnson & Johnson. And of course, for different business lines, and we want to strike the balance of the growth. So for the medical equipment, we want to grow this business line. In particular, medical and diagnostic equipment. We all know that for the medical equipment, it is very recommended and diversified in the market. And at this moment, compared with the pharmaceuticals, the potential will be even higher. So at least some moment, we are going to consolidate and restructure the business line.

In term of innovation efforts in terms of our resources preparation, we're ramping up efforts. On that [indiscernible], we're also accelerating efforts to adjust work structure and to promote internal talents and to hire global extraordinary innovative minded talents. We're improving our incentive system as well. If you look at the list of co of Henlius, we're going to ramp up the financial resources. We've also set up a new drug for innovation drug R&D. In Suzhou and [indiscernible], we've set up a novel drug innovation funds. So because 10 years ago, we incubated [indiscernible] capital [indiscernible] and also the closing kite business structure we can refer to. So it is through the innovation funds that we can make more investment. All right. We have a lot more questions from the floor. But in the interest of time, we have to conclude the morning session and during launch break, please feel free to interact with one another. So our investors... [Break]

Good afternoon everyone, welcome to our Interim Results and our seminar. So first of all, we would like to invite our shareholders to take a look at our innovation session. And we are very honored to have Mr. Chen Guoping, the CEO of Pramerica Fosun; as well as our Senior Vice President in the [indiscernible]; and also CEO of [indiscernible] with us. First of all, we would like to invite Dr. [indiscernible] to give us the presentation on the development of the new drug at Fosun Pharma.

Thank you all. And dear friends and shareholders, good afternoon. First of all, I would like to thank you for your support. And next then, I would like to give you the following presentation about Fosun Pharma's R&D and also the latest progress. And first of all, let's take a look at our R&D strategy. The structure and our policy is crystal clear and patient-centric and clinical needs driven, which means that [indiscernible] at a time and we will take into consideration what technologies are required and what products are required to address the patients' needs and we would like leverage the high tech and also the innovative technology in order to improve our R&D at the beginning of this year for Fosun Pharma, and then we have also set up a global R&D center in order to harmonize our global R&D initiatives including the clinical and also the preclinical coordination with the head office and also the subsidiaries and also the coordination between the domestic and international R&D centers at the same time. And we have also [ enclosed ] in our scientific management, we set up the scientific committee, R&D management committee, technical committee, clinical and [ RA ] review committee in different dimensions and levels and we try to manage our R&D. And under our global R&D center, we have 10 divisions. And from the left side, you can see we have a strategy and portfolio management. It is in charge of defining the R&D strategy. And we also have innovative and biological center and we also have external innovative office. And together with the external scientists and the research centers to be working with our internal R&D and the regulatory and also global clinical divisions center. So we have both domestic and the international teams and also for the medical affairs. And CMC is designed to address the issues, particularly some technical difficulties. At the same time, we have the generic and project management, as well as the project management center. Well, in the whole process, you can see we have 3 highlights. First of these, to strengthen our globalization and the Chinese-American and European teams for our clinical trials in the global dimension. We are very dedicated to more clinical trials. And we also have both internal and external innovation and internally and we put offices on the licensing and also incubation and co-development as well as the M&A. At the same time, we also put a lot of emphasis on our intelligent R&D as well as intelligent technological development and management. And in innovative and tech and for the small molecular, so this is in our bases. And based on the small molecular drug, we put more emphasis on the innovative drug as well and also best-in-class drug. At the same time, we are also very keen on the protein therapy and the cell therapy, and these are the new domains. For the protein therapy, we have our ADC and also our monoclonal and also bispecific and also CAR-T. For the gene therapy, we have CRISPR, that is in gene editing. And also mRNA, broadly speaking, mRNA is also part of gene therapy. And in terms of disease focus, we have oncology, immunology and neurology and also the chronic and also the rare diseases. And next, let's take a very quick review about our history over the past 3 years. And I can share with you 3 numbers that you can see on the chart: In terms of innovative and in terms of the innovative drug NDA trial, and the next is the IND approved and submitted. And in 2017, '18 and '19, in terms of IND, so you can see from 2 to 5 and to 8. And then for the NDA, you can see from 1 to 8 to more than 20. And also for the application, in 2019, we have to see the breakthrough. So that is the change in our numbers. In terms of the qualitative changes, we can also see over the past 2 years, we have made some breakthrough in 2018. And in the overseas market, where we have our first clinical trial in 2018 in the United States and in Australia and in 2019, we have the first-in-class, and it is already entered into the clinical trial. And we also obtained a Fast Track designation by FDA on -- in the same year. And for our 1501, we have also received the orphan drug designation. So behind all of these achievements, it is thanks to our R&D center as well as our improvement capabilities. And over the past 2 or 3 years, we have doubled and tripled our head count at an R&D center. In Boston, we have also set up our drug registration team. And this year, in Europe, we have also set up our own R&D center. So in the recent 3 years, that was the trajectory, as I introduced already. Next. The recent 7 months, upon entering 2020, some of the work we've been doing in the past half year, of course, the pandemic has a huge impact on our R&D. But we leveraged the virtual platform and also the time gap between China and the rest of the world. The first 3 months, the China was pandemic-ready; then later on, the rest of the world. So the clock was ticking. We submitted 10 INDs in the past 7 months. We've had also quite a number of INDs approved, 10 approved, 8 among which in China and the United States, including the first-in-class 1001. So right now, the dose was pretty much explored. In China, we directly started the Phase II basket trial, the 2 new drug applications already submitted. But then we have a novel drug, for example, the Avatrombopag Maleate approved to be marketed. This is the real breakthrough, the first small molecule innovation drug that gained approval in China. This is an innovation drug we brought in from the United States. The indication is like the thrombocytopenia, which was already approved. Due to the chronic liver disease, second indication of the thrombocytopenia due to chemotherapy, for that indication, we're making follow-up in the clinical trial because the Phase III globally already completed enrollment for that indication. The next vaccine are the joint research between Fosun Pharma and BioNTech in Germany, the mRNA vaccine. At the end of January, at Fosun International and Fosun Pharma, with the leadership support and guidance, the global R&D center actively launched our efforts into the R&D of the vaccine. Because we assumed great social responsibilities, we decided to promote the vaccine development. We were aware of the advantages of mRNA pathway. We locked in on BioNTech, a company in Germany, which is a technical leader in mRNA vaccine development. We also combined their resources with our capabilities of our R&D, and we started on one of our partnership with the German site. The characteristics of mRNA vaccine. To be brief, the R&D cycle is very short. If you look at the SARS-CoV-2 virus, upon genetic sequence detected, after 4 weeks, the first mRNA vaccine already finished it with design and already started the animal model trial. Second characteristic, mRNA, there is dual antiviral mechanism. So in addition to the traditional pathway, the humoral kind of immunity, the antigen reaction, in addition to that, it can stimulate the T cell reaction. So there is a dual barrier of feature, very strong antigenicity and one of efficacy. So it does not need those adjuvant. So it's adjuvant-free. It's a nucleotide. There's no microbial element at all. Therefore, it is safer than a traditional kind of vaccines. Another characteristic: straightforward, simple process despite the high technical interest, but the process is pretty straightforward. But as long as you get the hang of it, it enables mass production, which is very important. Why we chose BioNTech? There are several highlights. First, diverse mRNA technologies with comprehensive R&D muscles and effective, let's say, transfer system, that, therefore, [indiscernible] resistant. Right now, they've already got over 300 cases data based on the clinical trial. Of course, they worked a lot on oncology vaccine, and their own production capacity is pretty good. But then with Fosun Pharma, there is extensive potential for future expanded partnerships. And of course, on the bottom right corner of the slide, we really approve of their diversified technological platforms like for example, their nucleotide modification mRNA, self-amplification mRNA, different technologies. So we partner not only on 1 single product. But there are 4 vaccines from 3 platforms that already entered the clinical trial, among which 2 already gained Fast Track status from FDA. And we chose 1 of the 2 for entering global Phase III trial. All right. This is a review of the trajectory at the end of January. We interacted with BioNTech. 6 weeks after that, we signed the agreement. Compared to the Pfizer global partnership with BioNTech, we completed the agreement 3 days ahead. So we actually secured the Greater China region rights. The rights now belong to Fosun for the Greater China region. Before signing the agreement with the German company, together with the China CDE, there was a meeting conducted. Then we also invited the German regulatory agency. There was both party meeting with the support of the CDE China. So finally, we got IND acceptance. 3 days after that, in Jiangsu, Taizhou City, we initiated or launched the clinical center base. On July 28, formally, in China, the Phase I trial started, and it kicked off. The vaccines got cleared through the custom in Beijing. 18 hours after custom clearance, the first subject in Jiangsu was vaccinated with the study vaccine, yes, indeed. Then furthermore, on the same day, we vaccinated -- let me rephrase. We vaccinated 36 cases and another 36 on day 2, 72 subjects. Then Phase I trial, the vaccinations are altogether 144 cases or subjects already completed. And as we know that Pfizer and BioNTech launched the global Phase III clinical trial already outside of China. All right. Some latest news. Yesterday, closing Fosun Pharma and BioNTech already signed an agreement with Macau and Hong Kong. The intent is to provide 10 million units of the vaccine products for Hong Kong and Macau. The next, the BioNTech vaccine, the U.S., U.K. and Japan, with BioNTech and Pfizer, have already placed orders with them. So up to now, our cooperation has been ongoing in a smooth fashion. The domestic global clinical trials are on track. Thank you.

All right. Thank you, Dr. Hui. The next speaker is Scott Liu, CEO of Henlius, who's going to deliver a presentation about Henlius and novel drug development and future planning.

All right. Our dear friends from the investor community, hello, everybody. I feel very happy to have this opportunity to walk you through some of the R&D results of Henlius and our innovation system strategy. Next slide, please. Next. Next. First, the innovation achievements. Our mission is to improve patients' lives by timely providing them with one of the protocol protein therapeutics through technical innovation and operational excellence. Our vision is to be the most trusted and admired biotech company providing innovative and affordable medicines to all patients. We aim to be a global player. It is through innovation that we aim to develop quality biologics. We hold dear the principles of reliable quality, affordable innovation, biosimilars plus bio-innovatives plus combo. One of the focus was global footprints. We achieved the first biosimilar IND and NDA filings, that is the domestically manufactured [indiscernible]. We also have the first China manufactured biosimilar entering global Phase III trials. We have the [indiscernible] with the filings of both with EMA and a general regulator. We also adapted like single-use technologies. We are one of the first players with this kind of adoption of the technology in China. And we are a, let's say, [indiscernible]. We produce antibody drug, and we are approved by EMA for biosimilar development. And we are the first to develop continuous bioprocessing technologies as well. If you look at our strategy for product development, this is an evolutionary journey. We start from a biosimilar, then bio-follower and bio-better and a bio-novel. So this is the risk ladder, and we actually achieve those kind of strategy in a gradual manner, in a step-wise manner. After 10 years of efforts, we've come up with a very rich product line, 10 biosimilars and 20 to 30 innovation drugs already here and over 30-plus products in the pipeline. Over 90% of them are proprietarily developed, and some -- a few of them are licensing. And those that are marked with a star or asterisk sigh are those with a high potential. Next. The first half of the year, the progress we've achieved in R&D and core projects got clinical approval letters, including 13 and 14, which is RANKL, treating osteoporosis. And again, we also have a drug, [ 556 ], treating oncology diseases. We also have 6 kind of projects we already initiated. And in the second half of the year, there are going to be 4 to 5 applications. One of them is the antibody project, and we have 2 I/O target-related drugs that are related to the oncology and immuno-oncology. So we have a very rich product reserve and pipeline. This is a permit model. We have many products in the early stage, around 20 compounds in early stage. And we also have many IND-enabled compounds, over 30 of such compounds. And again, we have less number of those products in clinical Phase II and Phase III. Every year, we hope there are at least 2 to 3 products for which we're able to file for an NDA because there is high failure rate in respect for new drugs development. But we stand a chance to actually start the latter phase trial. And finally, we make it to NDA if we have many candidates in our pipeline. But then pivotal trials for PD-1, we adopt a combo strategy. For example, the combo with the current monoclonal antibodies like EGFR, 07. And HER2 in CD-20, we consider combining with our PD-1 and a whole host of IO antibodies. So therefore, they stand a chance to be combined with our PD-1. And internationalization, half of our trials will be conducted simultaneously not only in China but also in Europe and America. So we're aiming for those international markets, including emerging markets. This is the immunotherapy in I/O combo therapy. We've already got multiple pivotal trials that are ongoing. The next slide. During pandemic, the first 2 months of this year, we started our R&D plan 71. HLX71 is a fusion protein, the ACE2-Fc receptor fusion protein. The beauty of this kind of a protein is it is a broad spectrum. No matter how virus has mutated, it has to be binding to the receptor in order to gain entrance to the cell. This is a decoy receptor, as a matter of fact. So from this perspective, the virus will prefer to bind with this decoy receptor rather than real receptors. But then from that perspective, through vaccination, the antigen will activate the antibody. So antibody can generate the outcome at a faster speed. Several minutes after vaccination, there is a high blood concentration. But if it's the vaccine, you have to wait for a longer period of time compared to antibody therapy, right? It may take multiple injections. But here, if we adopt the combo therapy, the efficacy is even better. We're about to file for IND in the States and in China as well, and we're about to do that in the next couple of months for this kind of fusion protein product. The next slide. The next is strategic focus that multi-targets therapeutics. So based on I/O, then we have a bispecific or multi-specific therapies and combo therapies. The bispecific antibody, we have over 20 pipeline programs that are ongoing. So following PD-1, this is going to be the next front of our product development efforts for bispecific antibodies. Then next, why we follow multi-target therapeutics? PD-1, PD-L1, the main advantages are, they work on different tumor types, but maybe only 20% of the patients on whom they work. You have to combine those compounds with other products, right? You have to adopt the combo therapies instead of monotherapy. So we believe that combo therapy and a bispecific antibody will be able to have synergy, especially to make sure the products can work on those people that are poor responders to PD-1 and PD-L1. This is the current progress of the bispecific antibodies. 3 or 4 of them will be filed with the clinical, including 301, 35, 303 and HLX36. The targets have not been fully disclosed yet because most of them were first-in-class. So we are like very innovative not only in China but also in the rest of the world, and we've already built an in-house R&D platform. The next side, the R&D technical platforms. So our research platform includes the antibody screening platform, like the phage display library and also hybrid [ dome ] technology and other libraries. The libraries play a key role in the development of quite a few bispecific antibodies. We also have the animal model platform and the cell line development platform, the upstream process, the reagent. But we are blessed with a full-fledged technical R&D platform and system. So this is a library, antibody library, as an example. Thanks to the huge data here, it is easier for us to find an antibody that is likely to be working. So we can come up with both monoclonal antibody or bispecific. It is huge in size. So from this perspective, as we know that more than 12 different items of a bifunctional antibodies have been successfully obtained, so for bispecific, there are 3 to 4 platforms which enable us to carry out efforts developing a large number of those innovative bispecific antibodies. This is an animal model for in vivo research. We have over 70 MICE models, including xenograft, transgenic, various types of tumor models. We developed these models in-house. So this is very important for pharmacological research. So in a cost-effective manner, we can screen the candidates. Then we can advance our efforts from a pharmacological perspective. The process. There are 2 key drivers for innovation: The product and the production process. For the latter type of innovation, as we make sure about quantity, how can we reduce the cost of production? But we reduce the cost and never at the price of quality, as we adopt a whole host of innovative production process as a means to reduce cost, for example, by using single-use production technology. So the overall production cost can be reduced by like 50%. And we are trying to develop a continuous production process so that we can further reduce the production cost, which is essential for development of a next-generation biologics. And what about our R&D strategy? Next slide, please. As Dr. Hui already mentioned, to a certain extent, we adapt a balancing strategy between risk and innovation across different points in time. We have a go or no-go decision-making system at the very beginning of the part and also in proposal and also for the molecular construction and also in the clinical stage. And actually, we also have the go or no-go decision. And in order to make sure that well, it is actually aligned with our design and then also, it is based on all the scientific and also whether it is a first class. And then we have the PCG, and then that is our portfolio committee. And we are going to evaluate its performance results and also its value. We have to make sure that strategically speaking and also in terms of scientific innovation and also in terms of the future market competitiveness, and we will take a very holistic factors such as whether it is suitable for us to move forward and how we are going to follow up. So here, we have a very clear strategy. For us, the focal point is biosimilar. It is not an easy job to welcome the biosimilar. And of course, we hope that if we can really put emphasis on the processes, and then our success rate can be improved. So currently, the result of our biosimilar is very good. And then also in the future, maybe we have different targets. When compared with biosimilar, maybe the success rate is only 50%. And in the next stage, and therefore, we can have better financial resources and the revenue in the future. And when we are more robust, and then, of course, we want to work on more first and also best-in-class drugs. So in our pipeline, you can already see some of the first-in-class. And we have then our drugs to be independently researched. And for our Henlius, and based on our vision, we hope that with our efforts, we can provide very valuable drugs. And also, we can provide affordable and also Chinese independent brand for our patients. And we have already made a lot of firsts in innovation. And in the future, and based on vision, we hope that we can make more innovation, and we can also make more breakthroughs in order to serve more patients. Thank you.

Thank you very much, Scott. Next, we would like to invite Mr. Chen Guoping to give us the presentation on the Pramerica and Fosun, particularly the golden sales unit and also its BD.

Shareholders and investors, good afternoon, everyone. I'm Chen Guoping with Pramerica Fosun Life Insurance, and I'm very honored to share with you some of our difference and innovation. For Pramerica Fosun, so we are a joint venture between China and Western countries. And Pramerica has a history of more than 140 years in the United States. And it's also one of the most time-honored insurers in the States. And then for Fosun, it's a famous Chinese and private enterprise. So first of all, I would like to share with you some new developments in 2020 and to now. In 2020, our values have been greatly improved because we adhered to the strategic guideline of long-term and sustainable and valuable growth. And we have 4 focal points: focus on the teams, regular pay and business and technology and ecosystem in order to pave a new way for our business development. And we focus on individual business. And then we have the management system with the golden sales unit in order to make every effort to develop a professional 3 high marketing team. The manager process closely relies on the closeness on the regional ecosystem, including the health management, high-end and single-care community and quality services to build a plentiful and active ecosystem. Our development vision is with insurance as a tool. We would like to cooperate with quality life service providers to provide customers with the insurance-related and high-quality life services, ensuring customers to enjoy value-added services and beyond each insurance policy. Today, I would like to share with you 2 parts. First, I would like to report and how we can come up with a different team based on the golden sales unit as our core team-building strategy. Talking about the golden sales unit and that is our mechanism. We would like to set up a large BU team. And we hope that our team can have a high income, high productivity and high retention. In the end, we would like to adhere to healthy and sustainable development. And for our golden sales unit, there are 3 characteristics. One is to protect the property rights of supervisors; and second, to expand director sales units; and thirdly, to improve payment related to supervisors. And for this system, it can be divided into 5 parts. First is to protect the property rights. We have to raise to the promotion standards. And also, we have a group-in-group desire in order to support the promotion within his junior agents. And next is high-potential new agents in order to improve the quality of the sales team. Then in the incentives for excellent agents, and we continuously to build a high [indiscernible] and also highly productive sales talents. And then fifthly, management policy, we would like to strengthen our basic management and to reshape our training system. So I would like to share with you some more preliminary results. And we can see our health indicators. And Asian team improved significantly. And you can see that we have seen the golden sales units from 8 to 24. You can see in terms of the productivity, then we can achieve from 169,000, up by 635% in terms of monthly capacity. And for each team, we have seen substantial increase for the per capital income, more than 200%. And for the director level, so you can see from 26,000 and they're now up to more than 109,000 each year. So now we have also stabilized our team. So just now I have shared with you what we have done in terms of our teams. And teams is only one of our perspectives. And then second, how we can really manage our customer services. And we have a fully utilized and frozen the entire ecosystem. So you can see our business is fully integrated into the whole ecosystem. In the future, the completion in the insurance industry is more about the ecosystem based on the happiness and wealth and also health and also based on C2M. And we would like to incubate and integrate global and quality manufacturers and the supply chains to provide each family within a one-stop happiness solution which covers the entire life cycle. So this is the mission of Pramerica Fosun Life, and this is our commitment. And I would also like to share with you some of our achievements. For example, through diversified ecosystem, we would like to build our own competitive edge. Our purpose is to create the scenarios. Second is to acquire customers, and third is to serve high net worth clients. In terms of scenario, we are working with [indiscernible] and we are selling genetic testing. And we have already sold 3,592 policies according to the estimation. The conversion rate is as high as 20%, which brings motivation for our agents. With our scenario and the sales, we are creating the scenarios in order to create more business opportunities. Second, to acquire customers. Together with the Starcastle, we have already accumulated total premium of CNY 440 million. And also, we can see that, together with Yuyuan Jewelry, we have also attracted a premium of 100,000 on average. And in terms of services for high net worth clients, we are working with [ Joyful Way ] and MJ Healthcare. And since May, we have already issued 3,000 service cars. In the next step, our goal is to serve 3,000 clients in 2020, 10,000 clients in 2022 and 50,000 people per year in 2030. Our system and planning is to ensure that we can have the health and senior care, high net worth client happiness and car owners in our ecosystem. And we would like to mobilize our e-coaching. And in the first half of this year, we have already seen the new values that we created, particularly from our new businesses. In the whole year, in general, we would like to see the new height. Thank you very much for your listening.

Thank you, Mr. Chen Guoping. So on the site and also on the line, our shareholders and investors and analysts can start to raise your questions. So now the lady over there. Any questions?

And I think have 3 questions. First of all, I would like to know currently, for the life insurance and going forward, how you're going to integrate the life insurance with technology? Because now you are driven by technology. How is it driven by the technology? And second, for the market insurance, what is the future growth driver? And then thirdly, it is about the health insurance. How do you differentiate the life insurance from the health insurance?

Well, thank you for the questions. Pretty good. First of all, it's about the tech. Well, that will be the future mega trend. And for the future life insurance company, if we are not going to combine ourselves with the technology, then this life insurance company will have no future. As we all know that how or where the technology is now moving forward, we know what to do and how to do it. However, for various life insurers, what they are lacking is the talent, who are going to do this. And in our insurance system, and of course, this is also one of our dilemma, but now we have a good piece of news. And from a very famous and Internet-based insurance company, they have a very core talent and who is now working here as one of our leaders. And then recently, we would like to provide better services from our agents online and off-line. We want to integrate online and off-line services for our clients. I think it's just a starting point. We need to make more efforts in that. I think in the next press conference, you are going to see more achievements with better results, and I think the core issue isn't about the talent. Well, the second question, what is our future growth driver? Well, talking about our drivers, we have very robust growth drivers and primarily coming from 3 parts. And the first driver comes from the fact that, in actual, we are always making expansion for Pramerica Fosun. And you can see, we only have 5 licenses for our branches. So in China, which is such a vast market, we haven't started yet like in Sichuan and Guangdong provinces, and we haven't started our business there. This is one driver. And a second driver lies in the way -- our team building. Because for our current teams with license, we are still a very small team. So in the future, it is a high potential for our team set-up. And the third growth driver is more related with improved capacity. We still have a very large room for future growth. For the future growth drivers, these are the 3. Well, certainly, for the health insurance, so in order to improve our product and capacity, we have to sell highly valued policies. And it is important for all the insurance companies. And we are no exception to that. And in Pramerica Fosun, we have been engaged in a world-leading consulting firm to fully push forward the growth in health insurance. And as a truly health insurance company, I think that it should be no less than 40%. And for our health insurance, the comment is also established in order to make more breakthrough in terms of the health insurance in the future. Thank you.

Another question. Another lady over there in black shirt.

And good afternoon, everyone. Thank you very much for giving this opportunity. I'm [indiscernible] from [indiscernible]. I have 2 questions for Dr. Scott and then also Dr. Hui is also here. And for the Fosun Pharma, we can see the increase of R&D investment. I know that most of the R&D investment is used to Henlius. In addition to the biosimilar, I think that you need to have more investment in addition to the biosimilar and also for the bispecific drugs. And then you're going to have more investment on R&D. So my question is that for the group and also for the subsidiaries and for the future R&D investing, how can you ensure the alignment with each other? And also for the sales, we know that for the head office, it is more focused on the rheumatic and also for the breast cancer. And once the new drugs are developed, how are you going to coordinate yourselves and process? And for Jiangsu and [indiscernible], it is a very strong subsidiary. And you also have very good sales foundation in rheumatic diseases. And I'm asking that for R&D. And you also were going to work on some other type of disease related with rheumatics.

Yes. Dr. Hui, can you answer the questions first?