Fosun International Limited (656) Earnings Call Transcript & Summary

[Translated] Distinguished investors and analysts, good morning. Welcome to the 2022 First International Annual Results Announcement. I am the General Manager of Investor Relations at Fosun International, Lucy Sun. First of all, I'd like to present to you the management team. We have Chairman of International, Mr. Guo Guangchang; Executive Director, Co-Chairman, Mr. Wang Qunbin; Executive Director, Co-CEO, Mr. Chen Qiyu; Executive Director and Co-CEO, Mr. Zhu Ruirong; and we also have Executive Director and Executive President, CFO of the group, Mr. Alex Gong. Today's event will be split into the morning and afternoon session. In the morning, the management team will brief you on our financial performance and our strategic developments. In the afternoon session, the heads of the 4 business groups will present to you their performance and strategies, respectively. First of all, let's give the floor to the CFO of the group, Alex Gong, to present to you our financial performance. The floor is yours.

Distinguished investors and analysts, good morning. And also good morning to our online guests. Welcome to the 2022 annual results announcement. It's my great pleasure to meet you in person after the pandemic is over. Last year, we had very complex and volatile situation around the globe. We have rate hikes and subsequent volatility in the market. So against this backstop, we stay committed to our strategies and improve our performance. First of all, let me present to you our financials. In 2022, our total revenue is standing at CNY 175 billion, an 8.7% growth. Thanks to the rebound in FTG, which is around 49%. And our overseas revenue is standing at CNY 77.4 billion, a 44% Y-o-Y growth. And overseas revenue now takes up around 34% of our total revenue. And because of the volatile situation in China and also capital market turmoil, we suffered a lot in our net profit. The net profit attributable to earners of the parent is only at RMB 0.54 billion. Our Industrial operation profit decreased by 33% and enterprise operation profit decreased by 23%. Yet we take a long-term view. We stay committed to innovation even though we have lot of challenges in 2022, we invested over CNY 10 billion in technology and innovation. We have 50.8 million new registered members. We believe in continued investment in investment. We will generate the multiplying effect that will lay the solid foundation for our future growth. Next, let's take a look at the 4 business groups. Their overall performance was very steady against the very worsening trend. In the health sector, the wealth -- happiness sector has a 5.7%. And in the second half of the year, it has a 20.6% increase. For wealth sector is now selling out to CNY 47 billion for Intelligent Manufacturing, thanks to our performance in Easun Technology. Its revenue is standing at CNY 10.36 billion revenue, a 33.8% increase Y-o-Y. Overall speaking, our core subsidiaries have been performing very stably. Yuyuan has revenue around CNY 50 billion; Fosun Pharma, CNY 43 billion; Fosun Insurance Portugal, CNY 17 billion; for FTG, it rebounded against the trend and registered CNY 13.78 billion revenue, a 48 -- up by 48% compared to last year. And the top 4 subsidiaries contributed 72% of our total revenue. And it goes to show that our core subsidiaries are very resilient. On capital, even though last year, we have -- would be set by a lot of challenges, both at home and abroad. We've maintained very good performance. We've raised RMB 17.7 billion in public markets. That goes to show the recognition from investors all around the world in us. At the end of this end reporting period, we have over RMB 100 billion in cash and bank balances. And our leverage ratio has been very stable. And the cost of debt even went lower. The adjusted NAV per share is still very strong, around HKD 21.6 per share. If you look at our credit rating, it's been very stable against all the yards in 2021 and in 2022, we started asset disposal in nonstrategic and noncore assets. We've been very consistent in that strategy, and we strengthened this strategy. On the condition of very strong performance in our subsidiaries, we strengthened our capabilities to pay dividends back to the group so that we can better navigate through this very difficult period. And we continue to optimize our asset portfolio and to access those noncore and nonstrategic assets to reduce the total amount of our debt. And we have a holistic view of credit rating to make sure our subsidiaries will do the same. In 2022, building on our strategies in -- since 2020. In 2022, we actually accelerated the cash recovery, we have CNY 40 billion assets disposed, and we've received RMB 30 billion back in 2022. And we have a very smooth financing channel and we have syndicated loans around CNY 875 million and CNY 1.66 billion, respectively in 2022. All the Big 4 [indiscernible] banks and many commercial banks gave us a CNY 12 billion syndicated loan. So since last year, when the central government proposed that we need to strengthen the performance of private companies, this has been the biggest syndicated loan to a private company. And that goes to show all the institution players' faith in Fosun. And we're also carrying out equity investment to make our asset portfolio more transparent. Fosun Pharma completed nonpublic offering of A shares and they raised CNY 4.84 billion for innovative drugs and also the construction of a new facility. We have an AI-powered medicine -- medical platform called Fosun AITROX. It also raised CNY 100 million. Yuyuan also raised no more than CNY 8 billion for the core business, such as gold and jewelry. What's noticeable is last year, Lanvin became a public listed company at New York Stock Exchange that raised around USD 150 million. Wansheng raised CNY 1.475 billion for their new material. There are too many examples to show. I'll leave the specifics for the 2 co-CEOs to present. Against a very volatile backdrop last year, we maintained a very high level asset quality. We also strengthened our positions in asset-light business. We -- the adjusted NAV was very stable, even though we are under pressure, net profit wise, we have very good dividends. Since we became public listed company, in the past 16 years, we've paid dividends worth of HKD 25.3 billion altogether. So that's the end of financials. To summarize, we've maintained very steady performance against a very harsh environment. And in January, February and March this year, you can see a holistic rebound of all our subsidiaries. And that's why in this afternoon session, we have the heads of 4 business groups to present to you the specifics. And we also extend our coverage, we strengthened our R&D capability. If you have more questions, I'll -- we can talk about that in our Q&A session. And then I will leave more time for our 2 co-CEOs. Now let me pass the mic to Mr. Xu Xiaoliang.

Hello, everyone, online, offline investors and analysts and media coverage. For the past year, as we know that we have faced a lot of challenges and uncertainties in the global. However, Fosun -- all segments in Fosun have shown resilience and steady development. So next, I'll present you our business highlights in health, happiness, wealth and intelligent manufacturing business groups. Let's first talk about the Health Business Group. So for 2022, the total revenue was RMB 48 billion, up by 9.1% Y-o-Y. For Fosun Pharma, the revenue was RMB 43.8 billion, up by 12.73%. Thanks to the Han Li Kang, Han Qu You, Comirnaty and other innovative drugs, they have contributed greatly to our revenues. So for Fosun Pharma manufacturing, the revenue has -- up by 6.6%. And for the Fosun Pharma devices, diagnostic revenues was RMB 6.9 billion, up by 16%. For Healthcare Service, the revenue was CNY 6 billion, up by 47%. In 2022, Fosun Pharma has strengthened our R&D investment, the investment was CNY 5 billion, and the pharmaceutical business was CNY 5 billion, accounted for 16% of pharmaceutical revenue. So for the overall, we have seen the growth from the pharma for some form of revenue, that's because we have a sustainable and innovative product pipelines. The revenue from new and recently launched products in 2022 accounted for more than 30% of the total revenues. And also, we have many products that has achieved over RMB 100 million, 5 of them achieved over CNY 1 billion in sales and 3 achieved RMB 500 million to RMB 1000 million. And we have also overseas revenues accounted for 13% of total revenues. So right now, the Fosun Pharma has already established a very good foundation for global business presence. We are promoting our superior products to overseas markets. In the U.S. market, we have initiated the head-to-head bridging trials of ES-SCLC in the United States and also started the commercialization preparations. In the Sisram, the direct sale business in North America achieved the revenue of CNY 143 million, up by 28% Y-o-Y, accounting for 40% of total revenues. In Africa, we are speed up our construction in the Côte d'Ivoire distribution center for manufacturing and supply in local markets. And also, we have seen -- the first project from Gland Pharma was approved in China, and we will also have many competitive products will be licensed into China. For the devices and diagnostics, we have covered the medical cosmetology, professional equipment supplies and ventilators. And we have a deep -- we have Intuitive Surgical robots and also Breas ventilators. And for the diagnostics has covered a lot of segments and provide a whole package for our customers. For medical service and health care management model, we are exploring the one-stop managed health ecosystem and full-cycle closed solutions. We have around 9 million new registered users and has achieved 28 million in total in customers. So in the future, we will continue to innovate and to R&D and marketing sense to promote more high products and to optimize our structures and to drive our growth. Next, let's move to the Happiness BG. For the Happiness BG, the total revenue was RMB 70 billion, up by 5.7% Y-o-Y. To parent was CNY 1.56 billion, and turning the losses into gains. In Yuyuan, the revenue was RMB 50 billion. Fosun Tourism Group was RMB 13 billion in revenue. Lanvin Group revenue was RMB 3 billion. And we have also seen that -- as for the Yuyuan Garden, it has faced great challenge because of the COVID-19 last year. However, it has improved in the second half. Although the revenue was down a little bit, but the net profit has improved -- net profit to parent has been improved. And also the revenue structure has been optimized. The consumer business has been up by 16% Y-o-Y. And the consumer industry has accounted for 77% in revenue. And for our Jewelry Fashion, the revenue was CNY 331 million (sic) [CNY 33.1 billion] up by 20% against the headwinds has opened over 600 new outlets last year, 4,500 outlets in total. The Songhelou Noodle Place opened 86 outlets. 160s in total outlets. For Shede Spirits reported over CNY 6,000 million in revenue, up by 21%. Net profit to parent was CNY 1 billion, up by 35%. And also, we have seen the Yuyuan has worked with our partners and taken a very precious lot of Foyou Road site in Shanghai. The Phase 1 and Phase 2 will reach over 1 million square meters as the Grand Yuyuan and also we will build a fashion hub for the Oriental lifestyles aesthetics. And in the Chinese New Year, we have held a Yuyuan lantern festival based on "the classic of mountains and seas," which has been welcomed by all the tourists with over 4 million visitors and has been a hit topic in the social platforms with over 3.8 billion views. It has also been reported by the mainstream media and also the foreign media. Because of the rebound of the overseas travels, FTG suggested EBITDA has been grown by 10x. And the operating income is CNY 594 million net profit. Net loss to parent has been greatly down. And we have also seen the Lanvin Group was listed in the New York Stock Exchange. And its revenue has achieved a new record of EUR 425 million in revenues, up by 38%. All the brands has received the revenue growth. Lanvin has been -- the revenue has been up by 67%. And also, we -- as for the Sports group, the revenue was CNY 1.6 billion in revenue. The Baihe Jiayuan was CNY 1 billion in revenue, and we will -- depending our operations and improve our globalization operation, we will focus on FC2M model. In -- also in 2022 for wealth business, in total have revenue of RMB 47.72 billion, up by 9.2%. And for insurance, as said, revenue RMB 32.43 billion. And also for the Asset Management, revenue is RMB 15.29 billion. For Fidelidade, the total premium revenue is EUR 5.12 billion, up by 4.2% Y-o-Y. Also, China's -- for the HAL, the revenue is EUR 416 million, up by 14% year-on-year. In the past 1 year, as we can see for the insurance business, some highlights. The insurance premium has an increase of 3.4%. the total is RMB 60.3 billion. The investable assets is RMB 160.7 billion. Also, this time for the overseas revenue has exceeded EUR 1.5 billion, and an increase by 30%. The Fosun Health has an increase for 4%, which has been profitable for 2 consecutive years. And also due to the business growth in 2022, regarding our asset management, the total AUM is almost RMB 2 trillion, which has Y-o-Y increase of 10%. At the same time, the asset management of 5 properties, the total is -- the total -- as we can see by the end of June -- at the end of June of 2022, it has an increase by 7%. The total is RMB 283.2 billion. And at the end of December, RMB 303 billion. And for the next step, we will continue to improve our capital efficiency. And through our globalization, we'll continue to explore more growth opportunities. Next, about the intelligent manufacturing. The performance in 2022, we have realized significant growth driven by Hainan mining. And in total, the revenue is RMB 10.33 billion (sic) [RMB 10.36], which has an increase by 33.8% Y-o-Y. For Hainan Mining, the total revenue is RMB 4.83 billion, has been up by 17.26% Y-o-Y. Also for Hainan Mining, in 2022, on some major projects, they have achieved significant progress and made breakthroughs. Let me give you some examples. Like the Shilu iron mine, it has achieved its annual targets. At the same time, it has already begun to construct its 20,000-tonne lithium hydroxide project and will put it into production in the near future. Also for some nonlisted companies, they have achieved rapid growth in their business. For Easun technology, they have a Y-o-Y growth by 40%. On the one hand, it is a leading player in auto industry. At the same time, it has expanded its businesses into other industries. For JEVE, it has a 130% Y-o-Y increase, which is a record high. Also, it has launched its very first 4D millimeter wave radar Columbus series. And in future, we'll continue to focus on the pan-industrial businesses especially to focus on the research and development to become environment-friendly also to adopt those latest technologies. In the past 1 year, Fosun has been stick to optimizing our asset structure to focus on our core businesses. On the one hand, we made great efforts in financing and have finished the bond issuance, together with our partners. And we have received RMB 12 billion syndicated loans. At the same time, we speed up our divestment from those noncore businesses, and we have collected back the cash for over RMB 30 billion. At the same time, we continue to consolidate our business foundation to face with the challenges and to embrace the future. In future, we'll continue to stay focused on our core businesses to optimize our asset structure at the same time to popularize the oriental lifestyle aesthetics embraced by the younger generations and to create more good products for the global families for their wealth, health and happiness. And next, Brian Chen will take you through our strategies. Thank you very much.

Now let me present to you our strategies going forward. First of all, in 2022, as we all know, the year was sort of volatility and challenges. We have geopolitical situation and the following rate hikes, inflation, turmoil in capital markets and also resurgence of COVID-19 and the disruption in our supply chain [indiscernible]. Now during 2023, we're approaching April. So it's almost the end of the first quarter. And the 2 sessions have already helped, so as the 20th National Congress. So all this milestone marks that China is entering a new phase of economic development. COVID-19 has been classified as a Class B infection diseases in our management and China will -- we're focused on economic development now. For the first quarter, the trending topic is AI and how it will impact industries going forward. During this process, Fosun is staying committed to our globalization strategies. And in 2023, we believe that we will have a strong recovery in our businesses, especially in tourism sector after COVID-19. I'm sure there will be a very fast rebound, and we will continue to support them to -- we will continue to be innovation-driven. And we also value the oriental lifestyle aesthetics and so on. We will use these concepts to lead our growth in the next phase. It's been 30 years since we established Fosun. We went through different stages. And since 2008 to 2018, the decade saw us building global presence. And in 2019, we kept strengthening our industrial operation. During this process, we've come a long way, not just in size, but also in our global capability, we keep strengthening ourselves. Around 2007 and 2008, overseas revenue only took up 2%. Around 2014, it went up to 16%. And in recent years, is standing at 40%. It's not just a proportion of overseas revenue, but the quality is what I want to focus. We have also increased our competitiveness in our overseas markets. So we need to stay committed to our strategies and to have a more focused strategy. And of course, our strategy is to build an innovation-driven family consumer group. And that means we are very clear in our business. We will dedicated to health, wealth. And we were focusing on those high business with high multiplier effect. We're trying to play to our full strength and keep working on those areas that is relevant all around the world. So going forward, you will see China -- sorry, Fosun will be very good at our global operation. And another thing is we will use innovation driven to improve our competitiveness, especially in the pharmaceutical industry. And in consumer industry, we need to invest in the R&D too, so is intelligent manufacturing. And fourthly, we need to keep building FES, this sustainable management system. And of course, we need to take advantage of our ecosystem to achieve multiplying effect. But the prerequisite is -- of all these developments is a very sound and health financial and we need to deleverage ourselves and to reduce the size of our interest-bearing debt and improve our cash flow so that we can have an orderly investment and divestment, we will gradually access those noncore assets and strengthen market cap management. That way, we can ensure our future direction and also our dividend paid to shareholders. And we focus on 4 capabilities: first, very profound global operations in the past 3 decades, especially in the past 20 years, this is something we've been keep working on. We want to combine Chinese resources with a global presence. And the second capability is innovation-driven. We hope to lead with innovative products. And we need to be driven by digital intelligence innovation and management innovation. And the third point, the third capability is, of course, the FC2M capability. We try to build -- create more Fosun species and to create this Fosun ecosystem for multiplying growth. On FES, our last capability, we tried to -- took advantage of our global presence to draw a systematic methodology or toolbox and to strengthen the capabilities at each and every combat unit level. In profound global operation, actually, we've been doing this for several years. At each and every business line, be it pharmaceuticals, medical appliance or casino goods or fashion or the wealth sector or the intelligent manufacturing center. All we want to do is to materialize, is to build our global operational capabilities that is rooted in China with a global coverage. During this process, we tried to build a worldwide supply chain and distribution system last year, and our Comirnaty vaccine is now available in Hong Kong, Macau and Taiwan. In the United States, our pharmaceutical industry is now taking to shape. We are using our own -- we were trying to make the very first innovative drug happen in America. That's the Han Si Zhuang. Also, our medical equipment area is also very strong globally. Fosun Trade also registered over CNY 10 billion of revenue. And during the pandemic, Fosun trade is -- came into being during pandemic. And for Henlius, their H drug has been approved by EU and it's been granted the Orphan Drug. For our biosimilar drugs, we have licensed out to many different companies -- different markets and countries, including the U.S. For future rides, we've set up R&D center in the U.K. and Germany. They'll work in close -- in tandem with the Chinese R&D center. For our intelligent manufacturing, we have projects in Indonesia. We also have Côte d'Ivoire development park for Fosun Pharma. For Easun Technology, they've completed the acquisition of FeRe, an adhesive maker in Germany. Our overseas subsidiaries are also strengthening their capabilities. For example, Kiroro in Japan, and they had a grand opening during the snow season of 2022. So all these overseas business actually contributes to our business in China, for example, Club Med and Lanvin, they have huge presence in China. In 2022, we have RMB 77 billion of overseas revenue. We have 47 overseas business with 45,000 employees. Now on innovation. On our investment in innovation. We've invested altogether RMB 10.4 billion. We have around 1,700 licensed patents being granted. And we've set up over 10 global science and innovation centers. In health sector, the individual drugs or vaccines or medical devices, we've been investing in these areas with more and more quality products coming out. In 2022, Han Si Zhuang been approved as the first small molecular first-line treatment for lung cancer. Our CAR-T product has been now used for second-line treatment has been granted. In Happiness sector, our R&D in oriental lifestyle aesthetics is in progress. We tried to build a 4-dimensional area to better design our products in a digital way. While we're doing this, we have a wide range of innovative products at Yuyuan and Shede Spirits, including the very first skin care brand for sensitive skin. And also, Shede Spirits has made a technology breakthrough. On our insurance business, we go digital to enrich the customer experience on intelligent manufacturing, just like what Mr. Xu Xiaoliang just said, Fusionride designed an L2 automotive driving solution and also their 4D millimeter-wave radars are now going to market. Hainan mining invested in the lithium hydroxide projects. On FES, we've been building this project for years to improve our capabilities. The FES, there are 2 core cause of FES. First, we need to improve the entrepreneurship and also integrate horizontally our ecosystem. How do we achieve growth? How do we have a lean management and how can we better match our management philosophy with the stages of development of each and every company. In 2022, we've made a series of progress. And 2022 was the first year that we doubled down our efforts in building FES. We have released lots of tools. We've certified over 500 people, and we have drawn over 100 cases for learned lessons. On FC2M, our goal is to achieve the multiplying effect. On the strategic goal, we need to focus on the family's needs in health, happiness and wealth and keep building the FC2M happy ecosystem, linking internal and external ecological resources and to take full advantage of our multiplier effect in our ecosystem across different industries. And we also -- we need to continue to evolve our Fosun species. And we have over 50 million newly registered members. On supply chain, they reduced cost by RMB 4.1 billion. We have 133 quality products with revenue over CNY 100 million. And we have over CNY 2.4 billion revenue from sales in our inside our ecosystem. But all of that is based on a very good organization. So on organizational building, last year, we've carried out a lot of work, especially in -- and when it comes to global operation, we are setting up regional centers and also national operation committees across different countries. And all the efforts have been paid off. In Portugal, France, Germany, the United States, Japan, India and Southeast Asia, we've set up lots of national operation centers to better coordinate resources and to create an ecosystem locally and empower local businesses. And that way, we can strengthen our global operation capability. But of course, at the top, we have 5 different committees. Overseas operations, science and technology innovation, ecosystem, FES, digital intelligence. These 5 top committees are empowering each and every PL. And also recently, we've set up this digital intelligence committee. We've been exploring very actively how we could take -- we make our digital-related work more efficient so that we can better empower our business and ChatGPT and some implications need to be taken into consideration. And also, we need to leverage it at the group level to better benefit our portfolio companies. In our organization, the mechanism of partnership is very important. At Fosun, we have a pyramid-shaped partnership mechanism. At the very top, we have around 300 global partners. And a large proportion of that are actually overseas global partners. And we also have industry partners or partners at functional lines. And that includes almost 3,000 future entrepreneurs, and that also includes the -- our scientists. And the bottom, we have partners at enterprise level, and we go all the way down to the minimum optimal business unit. So the partnership mechanism is a very holistic and comprehensive mechanism. At the same time, we need to build a multilevel co-entrepreneurship or incentive scheme so that we can attract more talent into Fosun. So apart from those short-term incentives closely related to KPI OKR, we need to roll out more long -- mid- to long-term incentives. There's -- and these incentives not just includes equity, but also cash and an incubation stage at evolving stage and also at the maturing stage, we need to have different tools matching the needs of different companies. So during 0 to first or the incubation start-up period, we need to give them more resources. And during the evolving stage from one to N, we have equity plus cash incentive package to stimulate and motivate the team to grow even faster. And as for the ESG, this is also one of the work that we focus for the past few years, especially the investment. The capital market has set a very clear requirements and guidelines for listed companies. So we also enhanced our ESG capabilities. We already have the ESG guidelines is in line with our ambition and our mission. In the environment side, we have carbon neutrality target by 2050. Carbon -- peak carbon emission by 2028 and carbon neutrality by 2050, and we have EHS management framework. And on the social -- society side, we have rural doctors programs. And also during the COVID-19, we have facilitated a lot on the fight against the epidemic. On the governance side, we keep improving our corporate governance and incorporate ESG into our evaluation systems. And we based on the GIS system and also the requirements from the global, we disclosed our numbers. And also, we have received a lot of the rewards and recognitions from the -- from many institutions. We're the only conglomerates in Greater China with the MSCI ESG rating of AA. This is a very high recognition for us. And also we hope that with the ESG guidelines, we will move further on our future. Thank you everyone. That concludes my reports.

Thank you for the management's report on financials business and also the strategic report. So that concludes our report session. We will move to the Q&A session. We have online live stream and also the off-line sessions. So we will first turn the camera to our off-line guests. If you have any questions, please raise your hand.

Mr. Guo and management team, I'm from Guotai Junan Securities. My name is [indiscernible]. So my question is to Mr. Guo. Fosun as a company that has a global presence and deepening industrial operation when we are seeing the improving economic indexes in the macro economy, what's your view on 2023 performance?

Thank you for your question. I want to first talk about 2022 first. 2022 is the 30th year of our -- since our establishment. And it's a very special year for us. So for the last 30 years, we have experienced several cycles, but 2022 is still a very special year for us. It is the perfect turmoil for us. Not only for Fosun, but also for all the private sector companies, 2022 remarks very special year for all of us. We have seen a lot of companies has gone bankruptcy. But luckily, Fosun also had a lot of losses, but we have hedged against the headwinds, and we have survived and survived and also we had a lot of opportunities ahead. So in 2022, we have repeatedly said that we need to survive first. We need to move through the cycle, move through the risk. Second thing I want to talk about is that in 2023, we have seen the rebound in all business sectors. For the past 3 years, travel has been impacted greatly. However, at the end of the 2022, in the beginning of 2023, I won't show you the result -- the actual numbers, but we have seen the rebound in travel and also in outlet sales. So we are very -- we have a lot of confidence in our future development. I think we are moving into the right track, and we will see fast growth. And also thirdly, since 2022 or 5 years before 2022, we have been -- we are trying to be more focused. But because of the 2022, we have seen some of the challenges, we have speed up our focused strategy, and we have moved greatly. And just like the management has reported to you just before. So we will keep our strategy of divestment and investment. We have a very clear goal for our divestment and investment. In March, we have held a Global Partner Conference in Shanghai, and we have set up a very clear goal for what we should do and should not do. So for what we should do in the future. We need to keep move in the business that we have the advantage and other companies that cannot do. If the business that can be conducted by other companies and by other SOEs and for business that we don't have the advantages, we need to divest and move out from those business segments. And for the private sector companies, we have seen the cost of the financing would be higher than SOEs. So that means that for us, we need to focus our resources and time and capital into the business segments that we have advantages in. So what are the business sectors that we have advantages. We focus on global operations. We focus on R&D innovation, oriental aesthetics products. These are the business sectors that we have advantages. So we will improve our investments in these sectors. Why we try to be focused strategy that because we want to empower the sustainable growth. So that's the first question that we asked us what we should do and what we shouldn't do. The second question that we asked ourselves is that whether the business or the talent is suitable for Fosun. If it's only a financial investment, we would rely more on our [indiscernible] insurance companies because Fidelidade has the over EUR 20 billion to EUR 30 billion that can be used in investment. So for all the companies in Fosun, they need to contribute to the ecosystem of Fosun. If they can only contribute -- make financial contributions, then that's meaningless to us. And also what kind of the responsibilities that you can shoulder in our ecosystem. We need to think about these 2 questions so that our whole ecosystem can be more with it. After asking ourselves these 2 questions, we have thought very clearly what kind of business the group needs to do and how we should move forward for all of our subsidiaries and ecosystems. We need to focus on the right thing, the hard thing and the things that need -- that's time consuming. But as you can see, not all the things that we have done can make money for our shareholders. But if we insist on the right thing, I think that we can always make the profits for our shareholders and make values for our customers. We have been working hard on creating values for our shareholders. And every employee and global partners have been working very diligently to provide good service and products to our customers and shareholders. However, for the past few years, I think we have seen that not all of our shareholders have made enough money or has been received enough values from us, but I want to say thank you to all of you for keep trusting Fosun, but I think all the -- if you keep insisting on us, then you will receive the paybacks. Thank you for your question.

Thank you, Mr. Guo for your sincere answer. So we now can -- is there any questions?

Mr. Guo and Mr. Wang, I'm from Tianfeng Securities. My name is [indiscernible]. As Mr. Chen has said that the capital market has been focusing on ESG. So my question is that can you elaborate more on the things that we have done in ESG for the past year.

I'll answer your question. Thank you for your question. As Mr. Chen Qiyu has said, Fosun has paid great attention to ESG. It is incorporated in our mission, in our regional aspiration to help the society. We have contributed a lot to the welfare business. So for Fosun, ESG is something that we have been doing since our establishment. As of the end of '22 or as of the end of March 2023, our ESG work has been well recognized by society and also international institutions, including the MSCI ESG rating was AA as of the end of March, it is the only conglomerate in Greater China with MSCI ESG rating of AA. And also we have been selected as a constituent of Hang Seng ESG 50 Index. And selected as a constituent of the Hang Seng Corporate Sustainability Benchmark Index. And we are also being selected as a constituent of FTSE4 Good Index. And not only we have improved our ESG score. And last year, we have been -- it is -- it was also the first time we have been selected as a constituent of FTSE4 Good Index. And also our S&P ESA (sic) [ CSA ] ESG score has been greatly improved and ranked above 19% of its global peers. And not only the ESG ratings for Fosun has been conducted in the Fosun Group, our core subsidiaries has been working hard on improving their ESG ratings and promoting their ESG-related works. For example, FTG Fosun Tourism Group in March this year, they have received the MSCI ESG AAA rating. The only one in Greater China with AAA rating. We also focus on TCFD report. In 2023, we will publish our first TCFD report. Not only that we have been focusing on ESG work for the past 30 years, but we also have organizational support. We have ESG committee, management committee and also a decisive committee and also working groups in -- at the group level to promote all the measures of ESG work. And also, we have incorporated our ESG work in our KPIs of our management team. Their package, 1 part of the management's package will be related to ESG work. So in the future, we will keep focusing on our ESG ratings, ESG work. This also -- this is also in line with our ambition, mission and regional aspiration to show the more social responsibilities and help the world. So not only for Fosun Group and it is also our core subsidiaries, we will benchmark with the top-tier global companies and keep improving our ESG work. Thank you, everyone. Thank you for your support.

Thank you for the specific answer from Mr. Wang, and let's see if there is any further questions.

Thank you for giving me the opportunity to raise a question. I'm from [indiscernible] and we found that the new products and -- some new products have been created great value. So could you please elaborate on the progress of the new product development?