Fosun International Limited (656) Earnings Call Transcript & Summary

Dear investors and analysts, good morning. Welcome to Fosun International 2025 Interim Results Announcement. I am General Manager of Investor Relations of Fosun International, Lucy Sun. I will now introduce the management team attending the results announcement today. We have Guo Guangchang, Chairman of Fosun International; Wang Qunbin, Co-Chairman of Fosun International; Chen Qiyu, Executive Director and Co-CEO of Fosun International; Xu Xiaoliang, Executive Director and Co-CEO of Fosun International; and Gong Ping, Executive Director, Executive President and CFO of Fosun International. We will divide today's announcement into two parts, the morning session and afternoon session. In the morning, Fosun International management team will talk about the business and strategic development for the first half of 2025. And in the afternoon session, the head of the business groups will talk about the business results for the first half of the year. Now let's give the floor to Gong Ping, Executive President, Executive Director and CFO of Fosun International, to talk about the financials.

Dear investors, both online and in the room, good morning. Welcome to Fosun International 2025 Interim Results Announcement. On behalf of the group management, I will report on the group's financial results in the first half of 2025. In the first half of this year, the group reached RMB 87.3 billion of total revenue, slightly down compared with the same period last year, mainly impacted by some business, but we see strong growth for overseas revenue, and the proportion increased from 43% to 53% of total revenue. The industrial operating profit maintained stable, reaching RMB 3.15 billion, and we achieved RMB 0.66 billion of profit attributable to owner of the parent. The adjusted NAV reached HKD 18 per share, reflecting our continuous improvement, and we are seeing strong dividend payments from the core portfolio companies. We invested RMB 3.6 billion in technology and innovation, ensuring stable business growth. Apart from stable business foundation, we have an improving revenue structure in the health business. We see a strong contribution from Henlius innovative drug. In licensed out deals, we signed USD 1.4 billion, and 32% of the total revenue comes from innovative drug, and the CEO will talk about that later. In terms of wealth business, we are seeing solid growth. While divesting HAL, we still ensure stable growth in different business contribution. Yuyuan's golden jewelry business had some slight downturn in the first quarter. But in the second quarter, they are strongly bouncing back, and the tourism business is also improving significantly. In Intelligent Manufacturing, we are seeing double-digit growth in oil and gas. And excluding HAL business, the main revenue contribution maintained strong. Our 4 core business, the revenue maintained stable for Yuyuan due to its consumption downturn, that slightly decreased, but we are very confident in that. Especially for golden jewelry business, we are seeing strong recovery in the second quarter, and we are very confident in the second half of the year. In terms of the financials, in the first half, we completed RMB 13.62 billion of public market financing, and cash, bank balances and term deposits reached RMB 67.83 billion, remained stable compared with the last year, and the average cost of borrowing decreased from 5.6% last year to 5.3% this year. When we compare with the same period of last year, we have a 50 bps drop with rate cuts in the U.S. and our own financing cost management activities, we'll further reduce our average cost of borrowings. And S&P Global Rating affirmed our stable outlook. On May 29, 2025, S&P completed its annual review of Fosun Group and maintained the BB- rating with a stable outlook. And S&P reaffirmed the improvement in Fosun's overall credit indicators, highlighting strengthened liquidity buffer and steady debt duration. And we have been emphasizing our finance strategy. First is global operations with enhanced quality efficiency, growth driven by technology innovation. In terms of Fosun Pharma, we are actively promoting the overseas expansion. From early 2025 to August, 2 license-out deals were signed with a total value of USD 835 million, including an upfront payment of USD 42 million. As for Henlius, in the first half of 2025, overseas product profit grew over 200% year-on-year with strong growth expected for the full year. From early 2025 to August, 3 license out deals were signed totaling over USD 543 million, including an upfront payment of USD 69 million. We are also accelerating global expansion of consumption business. For Club Med in the first half of 2025, global business volume reached new high, up by 3.8% year-on-year. Operating profit continued to grow, increasing by 11% year-on-year. As for Shede Spirits, its overseas sales exceeded RMB 10 million in the first half, up by 35% year-on-year. Overseas presence spans 5 continents, 40 countries and regions, 100 duty-free stores and 1,200 retail outlets. We're also steadily expanding insurance globalization for Fosun Insurance Portugal. In the first half of the year, the international business recorded a total premium of 924 million Eurodollars (sic) [ EUR 924 million ] nearly 30% of total, and its operations in 13 Portuguese/Spanish-speaking countries have become a vital part of its globalization strategy. As for Hainan Mining, in January 2025, the acquisition of Tethys Oil is completed through a tender offer with a transaction value of USD 166 million. In Easun Technology, following the establishment of a JV with leading Saudi group Juffali, the final assembly project officially commenced operations in the first half of the year at King Abdullah Economic City in Jeddah. In terms of innovation-driven pharmaceuticals breakthrough for Fosun Pharma in the first half of the year, its innovative drug revenue rose by 14% year-on-year, accounting for 38% (sic) [ 32% ] of total revenue, up by 5.8 percentage points from the same period last year. As for Henlius, the self-developed HLX43 has become the world's first PD-L1 targeting ADC progressing to Phase II clinical trials, displaying significant competitiveness versus international peers with potential sales exceeding USD 10 billion. In terms of Yuyuan, it's leveraging digital technologies such as naked-eye 3D and VR to integrate Yuyuan architecture with 10 leading domestic IPs, creating immersive experience. In the first half of the year, the core areas of Yuyuan Tourist Mart GMV reached RMB 2.6 billion, up by 55% occupancy rate, up by 8 percentage points year-on-year. As for Club Med, over the past decade, invested EUR 175 million in digital transformation and partner with Alibaba Cloud to launch the tourism agent AI G.O. with the first application to be rolled out at Atlantis Sanya later this year. As for Fosun Insurance Portugal, the AI-powered LLM increased medical reimbursement invoice recognition from 36% in the end of '23 to 51% in mid-2025 and fully automated car insurance claim approved rating from 48% in the end of 2023 to 62% in mid-2025. As for Hainan Mining, in the first half of the year, they advanced 18 R&D projects with R&D investment up by 37% year-on-year. We keep having asset reevaluation and ongoing debt deduction commitment. We are seeing the share price improvement of Fosun International, up by 18%. For Fosun Pharma, it went up by 53%; Henlius, up by 235%; and Sisram Medical, up by 88%. In terms of Millennium BCP, its share price also went up by 69%. For Hainan Mining, Gland Pharma and Lanvin Group, they're all experiencing increase in share price. For the primary market, Yuyuan Jewelry and Fashion Group completed capital increase, and share expansion brought in shareholders. After this round, they raised nearly RMB 2 billion with post-investment valuation of around RMB 11.2 billion. For Fosun United Health Insurance, they brought in institutional shareholders such as IFC and ADB. Within the pipeline, there are dozens of ecosystem companies with IPO potential unlock opportunities for value revaluation. We are preparing for Fidelidade, it's actually United Health Insurance, Peak Re, Fosun Health, Easun Technology and Atlantis Sanya. In terms of liability, we are steadily reducing our debt level with reducing cost. At the group level, asset divestment and subsidiary dividend generated cash inflow of over RMB 8 billion, and subsidiaries intensified the divestment of having, noncore and nonstrategic assets, completed contract worth nearly RMB 7 billion in the first half of this year. As for equity divestment, we achieved equity divestment in Taotall Technology, Laopu Gold, United Family Healthcare and et cetera, in real estate that include Fosun Insurance Portugal building Lisbon, Madison House in New York and some floors of BFC. Compared with 6 months ago, we are seeing slight decrease in our financing costs. The third part of our finance strategy is diversified financing channels, declining cost of borrowings. In terms of bank financing, we built our long-term partnerships with banks. In the first half of this year, we signed strategic agreement with several banks, including CITIC Group, Postal Savings Bank of China, China Minsheng Bank, et cetera. In March 2025, the group successfully completed the first closing of a 3-year unsecured syndicated loan overseas, raising USD 675 million. The syndicate's greenshoe option is progressing smoothly. In terms of bond financing, we have successfully issued 6 SCP, raising a total of RMB 3.9 billion. We successfully issued 3 asset-backed 2-year midterm notes, raising RMB 3.5 billion. We successfully issued 3 unsecured 2-year corporate bonds, raising RMB 1.4 billion in the overseas market. Both international bond yields continue to trend lower following the reopening of U.S. dollar bond market. Fosun International in January 2025 tapped U.S. dollar bond due 2028, expanding to USD 500 million with substantial oversubscription. As of August 2025, Fosun International has completed tender offer and early redemption of its U.S. dollar bonds due October 2025, leaving no more offshore bonds maturing for the rest of the year. In terms of bond financing costs, in the first half of 2025, consolidated financing cost were 5.26%, continuing its downward trend compared with 5.63% at the end of 2024 and 5.79% in the first half of 2024. Since 2025, domestic public market financing has gradually improved. The cost of group's commercial papers declined by about 80 bps in the first half of the year. Meanwhile, the group successfully issued 3 asset-backed bonds in the first half of this year with the lowest financing cost of 3.69%. In July and August 2025, Fosun High Technology transitioned to unsecured issuance format by successfully issuing 3 unsecured 2-year corporate bonds with a low coupon of 3.5%. We are also expanding our financial institution network, lowering financing costs. In the 2025 offshore syndicated loan, we secured support from around 20 leading regional banks overseas. In addition to long-term partner banks like HSBC, Standard Chartered, Natixis and Commerzbank, we have also first-time participants, including JPMorgan, MUFG, SocGen, UniCredit, ADCB. And we have multiple mainstream issuers, bank wealth management subsidiaries and other nonbank financial institutions participating in the group's fundraising. The fourth part of our finance strategy is outstanding asset-light operating capability, empowering insurance investment. In terms of outstanding asset-light operating capability, in the tourism business as of mid-2025, Club Med operates 68 resorts, 85% of which utilize leasehold management business model. In the senior care services, investment operation in elderly care and nursing institutions have been implemented in nearly 10 key cities with a total number of beds of over 11,000. In terms of commercial property management in the first half of 2024 (sic) [ 2025 ], Yuyuan's total managed commercial property reached about 3 million square meters, generating rental income of RMB 1.14 billion for property owners and contribution of EBITDA of RMB 650 million, up by 19%. In terms of fund management services, our onshore actively managed fund exceeding RMB 50 billion and offshore actively managed fund exceeding RMB 200 billion. For the onshore fund management part, we have Fosun Capital Fund with nearly RMB 24 billion and Fosun Health Capital Fund with nearly RMB 15 billion under management. So we are seeing a very systematic operating model so that we can use better leverage to empower insurance investments. We have a lot of high-quality insurance business under different brands. They are building on the strong growth of this high-quality insurance business and the group's proven operation capabilities so that we can enable the flywheel project. In the first half of this year, we are seeing very strong growth for the insurance with strong profitability growth. For Fosun Insurance Portugal, the total assets reached EUR 22.6 billion with EUR 3.27 billion premium in first half 2025. Net profit, EUR 133 million. For Peak Re, total assets reached USD 3.9 billion with premiums of USD 1.06 billion and solvency around 180%. We are also seeing strong premium growth for Pramerica Fosun and Fosun United Health Insurance with RMB 5.36 billion and RMB 3.64 billion of premium in the first half of this year, respectively. We are already seeing asset-light operations and the insurance ecosystem achievements in the first half of this year and in the future, there will be stronger growth. For Fosun United Health Insurance, in the first half of this year, they saw 1,733 policies from senior, care communities with premium of RMB 1.63 billion. For Pramerica Fosun, they saw 3,900 (sic) [ 3,938 ] policies from senior care communities with total premiums of RMB 39 billion. Our finance strategy paves a promising future. In the future, we will unswervingly prioritize the group's portfolio, focusing resources on cultivating businesses with the potential to become industry leaders. We will continue to advance the implementation of asset-light strategy for the divesting heavy asset projects like fund advantages. We -- our goal is to reduce the group's interest-bearing debt to approximately RMB 60 billion and industrial operating profit and net profit attributable to owner of the parent, respectively, need to reach RMB 10 billion, and we aim to consistently elevate our credit rating to investment grade. That's all for the financials part. Now we will leave the floor to the Co-CEO of Fosun National, Mr. Chen Qiyu, to talk about the business performance.

And next, I will report on the business in the first half. First, let me talk about the Health segment. In first half 2025, the Health segment recorded RMB 22.57 billion of total revenue slightly decreased. Net profit to parent was RMB 760 million, up by 48.3% year-on-year, mainly driven by the year-on-year growth in the Fosun Pharma's profit. Fosun Pharma recorded RMB 19.43 billion of revenue. Henlius recorded RMB 2.82 billion of revenue. Net profit was RMB 390 million. The [ Serplulimab ] got approval in the EU, the U.K. and other regions. And HLX43, this is an ADC product, has released positive Phase I and Ib clinical data on efficacy and safety in lung cancer for the first time and more than 10 clinical trials covering major indications are ongoing globally. The overseas revenue was RMB 8.59 billion, up by 2.1 bps increase. The overseas revenue accounted to 38.1% of total revenue with 2.1 bps increase. Fosun Pharma's R&D expenditures was RMB 2.58 billion and got 5 indications of 4 innovative drugs approved and also licensed out products and licensing products. Fosun Health and JianJia Healthcare recorded RMB 3.58 billion (sic) [ RMB 3.59 billion ] of revenue. It will further enhance integrated operation in the Greater Bay Area. And Foshan Chancheng Hospital ranked #1 on the private hospital competitiveness ranking for the consecutive -- eighth consecutive year, and JianJia Healthcare achieved rapid growth with improved performance. Luz Saude recorded RMB 399 million revenue, up by 6.9% year-on-year, and the net profit has been grown by 12.3% year-on-year. For Fosun Pharma, its innovative products has been growing steadily, reaching RMB 4.3 billion of revenue, up by 14.3%. Net profit after one-off gains was RMB 961 million. It continuously advanced lean management to achieve health growth of the company. And also, it has been optimizing asset structure, and cash return acceleration and also has achieved a very healthy level of free cash flow. And for Fosun Pharma, we have sustainable and innovative product pipeline. In the first half of 2025, after long years of deployment, we got 4 innovative drugs with a total of 5 indications independently developed and licensed-in by the group were approved for launch both domestically and internationally, 4 innovative drugs had entered the prelaunch approval stage and 57 generic drug varieties were also approved for launch both domestically and internationally. We focus on solid tumor, heme and immunization. And we are also strengthening our 4 major technology platforms encompassing antibody and ADC cell therapy and small molecular to further building our high-value pipelines. And also, we are working with the health funds to explore cutting-edge technologies such as radiopharmaceuticals, RNA, gene therapy and AI drug R&D to further enrich our value chain. And as you can see, we also have core therapeutic areas listed here. In the first half of 2025, in terms of the innovation and innovative drugs, we achieved licensed in and licensed out. And all of this has been published, HXS004 (sic) [ XH-S004 ] target and HLX13, HLX15, Serplulimab and FXS6837 has achieved licensed out. As you know that in China, comparing to the big pharma, the Chinese companies are licensed out many products to the big pharma in the global world. So we believe in the second half and the next year, Fosun Pharma and Henlius will achieve more licensed out results. As for license-in, as you can see, we are insisting licensed-in products with the key partners. I can give you a few examples. For example, AR1001, we licensed-in this product. And also, we work with Teva to co-develop the PD-1/IL2 product. This is a very innovative cooperation model. And also, we licensed-in CD47 molecule. As for globalization, Fosun Pharma has already started the global footprint. And also, we got very good foundation for the past few years. For example, in the U.S., we have already got a sales team for generic drug. And also, we have already built a U.S. sales team for Serplulimab. In EU, we have operating company working with the local partners to launch the innovative drugs and the biosimilars. And in Japan, we have started a clinical trial, including HLX22 for first-line gastric cancer. The first patient dosing of Phase III MRCT was completed. In India, we have entities. In Africa. We have been working there for over 10 years. And recently, we are expanding in Southeast Asia. We have already established a sales platform for Southeast Asia, and we are expanding in 2 different regions of Southeast Asia. In Middle East, we're collaborating with Fakeeh Care Group, and we established a JV to further promote the launch of innovative therapeutic products in Saudi Arabia and other countries. And going forward, we will further expand in South America. So the global footprint and the global operation, Fosun Pharma not only focused on innovative drugs, but also, we are expanding in the global regions. As for medical service and health care management, we are also moving strongly. As for aesthetic medical, the revenue has already reached USD 165 million from the Sisram in the first half. And before we focus on the medical devices, but in the recent 2 years, we focus on injectable fillers. As you can see that in the first half, the revenue reached USD 14.4 million, up by over 218 percentage year-on-year. And the licensed-in Revanesse is accelerating its commercialization in China. Intuitive Fosun is a global leader in surgical robotics and is still a leader in China. 29 da Vinci surgical systems were installed in Chinese Mainland and Macau region in first half, over 450 systems were installed. As for iron systems, 6 iron systems has been installed in Chinese Mainland. And Breas is a well-known European ventilator manufacturer. Its operating revenue, net profit and operating cash flow all recorded steady growth. As for the diagnostics, we -- Fosun Diagnostics received approval for 2 products, the China's first and currently only home testing kits for COVID-19 and influenza A and B antigens and the first approval product under Fosun Diagnostic Respiratory Infection syndrome multiple nucleic acid detection solution. The fully automated high-speed chemistry immunoassay instrument completed follow-up validation and optimization upgrades, and we collaborated with Siemens Healthineers and registered 16 customized biochemical reagents and 1 quality control product. And for medical service and health care management model, we focus on premium medical care and professional services. Fosun Health is expanding its footprint in medical group and smart health care and insurance department. Foshan Chancheng Hospital and Hengsheng Hospital as designated medical institutions under the Hong Kong and Macau Medicine and Equipment Connect launched 15 new drugs and medical devices from the catalog. As for the JianJia Healthcare, it's accelerating its establishments in the new first-tier cities and provincial capitals. It is operating a total of 16 rehabilitation medical institutions, of which 4 were in trial operation, with another 7 institutions under construction. And we are further expanding and optimizing our eco models, working more closely with insurance, insurance plus health care, insurance plus wellness, healthcare plus wellness and health management. As for digitalization and AI-driven businesses, Fosun Pharma over the past 2 years has been focusing on digitalization and AI-driven business growth. And right now, it has gradually covering R&D operation and the product application. And Fosun Pharma is among the first domestic pharmaceutical enterprises to deploy LLMs like GPT4.0 and DeepSeek and was selected into 2025 Forbes China top 10 AI Innovation Scenario Application Enterprises. As for pharma, PharmaAID decision intelligence platform has been playing a big role in R&D. As for the early-stage R&D and Henlius AI for science platform, all contributing to our innovation, the drug discovery and efficiency. So going forward, we will further leverage AI in clinical trials so that we can further improve the efficiency of clinical trials. As for MedTech, the MedTech also has been including AI into our product. As for health care, especially Foshan Chancheng Hospital, Foshan Chancheng Hospital has already been using the Mini app very frequently. Moving forward to the happiness segment. The total revenue recorded RMB 33.72 billion in the first half, mainly because of the consumption segment adjustment. The revenue decreased by 21.9% year-on-year. Yuyuan recorded RMB 19.11 billion of revenue, mainly because of the challenge in the industry but we have seen the jewelry and fashion of core consumer sector showed signs of recovery in Q2. With the challenging environment, Yuyuan has been operating leanly and reduced significantly in their cost. FTG recorded a record high revenue RMB 9.53 billion of revenue because of the global operating capacity, and it has been further optimized the cost, and operational enhancement led to double-digit growth in key profit indicators. The overseas revenue was RMB 13.56 billion, accounted for 40% (sic) [ 40.2% ] of the total revenue. Especially Club Med operates in 40 countries and regions across 6 continents. And Club Med reported record high revenue during the reporting period. Yuyuan Inc. in the first half of 2025, under the economic pressure, the operating revenue was down by 31% year-on-year. In Q2, the operating revenue was RMB 10.33 billion, broadly flat comparing with the same period last year. And we are seeing the recovery. As for gross profit, in Q2, the gross profit has been improved comparing to Q1 and the same period last year. Cash and cash equivalents remains ample. Under Yuyuan, the core business is jewelry and fashion. We have seen Q2 recovery in jewelry and fashion. And the fashion jewelry business in first half generated a revenue of RMB 12.8 billion. In Q2, the revenue rebounded to RMB 7.61 billion and increased, comparing to Q1 and Q2 last year. And also, we are seeing improvement in the gross profit. As for the Shede liquor, although we are seeing the pressure, but Shede liquor has been remaining on its aged baijiu strategy and price volume control policy, promoting the brand upwards while deepening base market. Sales of T68 Tuopai Exceptional saw accelerated growth. The company accelerated the development of online channels, with emerging e-commerce sales up by 31%. And Shede liquor pursuing international expansion actively, now covering 5 continents with presence in 40 countries and regions. Overseas retail endpoints reached 1,200. Yuyuan Tourist Mart has been improving and renovating itself. And also, we have seen the initial results. The occupancy rate reached 99%, up by 8 percentage points year-on-year. The sales volume has reached RMB 2.61 billion, up by 55% year-on-year. Visitor traffic reached 19 million, remained flat. The number of events is 1,000 per day. And we have self-owned IP, super scenario development and special marketing campaigns all contributing to sales growth. As for FTG, as we mentioned before, the -- in 2025, we are seeing the record high revenue. But more importantly, we are also seeing the profit growth. With ongoing cost reduction, efficiency enhancement and operational optimization in the first half of 2025, excluding one-off gain on disposal of resource, adjusted EBITDA grew by 16% year-on-year, and adjusted EBITDA margin rose by 3.2 percentage points. Adjusted net profit increased by 42% year-on-year, and adjusted net profit margin rose by 1.4 percentage points. Club Med also achieved the record high revenue. The operation revenue has been improved by 4% year-on-year. We are seeing the growth from the ADR and reduced cost and double-digit growth in operating profit driven by efficiency improvement. Club Med is now running 68 resorts in over 40 countries and regions and at 69% of direct and semi-direct sales rate. For the outlook in the second half and next year, we have already seen the booking in the second half and the next year. So we are already seeing the booking in the second half 2025 will have 9% of growth comparing to last year. And also, the booking in the first half 2026 will be grown by 17% year-on-year. And for FTG, we will further have strengthened core business, pursue asset-light growth and embracing AI for Atlantis, it will further diversify offering, boosted traffic. The business volume remained high, reaching RMB 760 million. The average occupancy rate reached 88%, which is high. The number of visitors reached over 3 million. And the Taicang Alps Phase 2 officially commenced. And the Lijiang project is rooted in Naxi Culture and creating a benchmark resort destination. Taicang is very near to us, and you can see there. As for Lijiang, the [indiscernible] is also a very good tourist destination right now. We are also moving forward with our asset-light strategy. The Taicang Alps Phase 2 officially commenced, aiming to create a world-class winter resort landmark. In June 2025, it officially broke ground with a total investment of nearly RMB 5 billion, a joint project by Taicang Government Platform and FTG expected to commence operation in June 2029. Chongqing China Mall project signed, aiming to build a world-class mega entertainment mall, accelerated implementation of AI technology across products and operations. So as you know that Club Med is famous for its G.O., and we are codeveloping the AI G.O. culture tourism intelligent agent. As for the wealth segment, in the first half, the total revenue was RMB 27.83 billion, up by 3.3% year-on-year, primarily driven by growth in insurance revenue. The net profit to parent has already been increased significantly to RMB 243 million. And also, we are seeing strong profit in different entities. And also for the Fidelidade. Fidelidade maintained the top market share in Portugal. The premium revenue recorded EUR 3.27 billion, and its international businesses accounted for 28.2%. Net profit reached EUR 133 million. Peak Re, the total premium revenue recorded USD 1 billion (sic) [ USD 1.06 billion ] and net profit reached USD 900 million. BCP, the core net profit reached EUR 1.17 billion, and the net profit to parent was EUR 500 million (sic) [ EUR 502 million ]. HAL recorded EUR 218 million of revenue. Pretax profit rose to EUR 55 million (sic) [ EUR 55.1 million ]. For Pramerica Fosun, the total premium revenue was RMB 5.36 billion. Fosun United Health recorded RMB 3.6 billion (sic) [ RMB 3.64 billion ] of total premium, and asset management recorded RMB 6.94 billion of revenue. Our insurance business has global footprint, not only in China, we have seen the significant growth from the Pramerica Fosun and Fosun United Health. And also, we are seeing for our overseas insurers, including Peak Re and Fidelidade, Fidelidade is rooted in Europe and also expanding globally. As for the overseas insurers, they have efficient operation become cornerstone of profits for Fidelidade, steadily expanding the business scale and continuously enhancing profitability level. The combined ratio was controlled under 91.5% and the annualized investment yield reached 3.5%. Peak Re prudently managed risk exposure with excellent performance in profitability. The combined ratio was 88.1%, and annualized investment yield reached 4.1%. As for domestic insurers, they rely on Fosun's ecosystem for rapid growth. Pramerica Fosun leverage ecosystem strength and focus on long-term value growth. The new business value has been grown by 39% year-on-year, over 3,900 policies from health care communities and RMB 3.9 billion of full cycle premium. As for Fosun United Health created a new business model of health insurance and intelligently manufactured health products. Its new business value has been increased by 49% year-on-year, and full cycle premium has reached RMB 1.6 billion. And also, we are seeing global footprints for asset managemeht platforms. We also have a very comprehensive footprint in China. In the first half, Fosun Capital got 4 portfolio companies filed for IPO, 2 portfolio companies successfully listed. Fosun RZ Capital had 4 new investments in high-quality companies across AI robotics, smart manufacturing and new global expansions and 10 projects successfully accelerated and 1 successor USD fund completed closing. We have very good major existing investments, including Chagee and Laopu Gold. Continuing with the Intelligent Manufacturing segment, the total revenue recorded RMB 4 billion (sic) [ RMB 4.02 billion ] in the first half, decreased by 24.6% year-on-year, primarily due to the consolidation scope. Easun Technologies is no longer in our consolidated form. So excluding this effect, revenue would have increased by 14% year-on-year. Net profit to parents was RMB 140 million. Hainan Mining recorded RMB 2 billion (sic) [ RMB 2.415 billion ] of revenue, up by 10.46%. And net profit to parents was over RMB 281 million. Both lithium mining and lithium salt processing achieved product rollout, and its overseas assets accounting for 48% (sic) [ 48.05% ] of the total. The overseas revenue was RMB 1.12 billion. Easun Technology recorded RMB 3.76 billion of new orders. The company has secured new industry-leading customers in North America and Middle East. As for Hainan Mining, it further focus on resources to continuously build resilience through market cycle. During the downturn, we still achieved steady performance. Hainan Mining reached stable iron ore output and oil, gas output. And we are seeing 15% of decrease from the index. Comparing to the macro economy, we have already seen over 10% of growth in the first half in terms of the revenue comparing to last year. We're also expanding into new segments. In Hainan, we have the Hainan Mining and the 20,000 ton lithium hydroxide project and also the Bougouni lithium mine in Mali, Africa. And we will continue to expand in global markets, including the Middle East to -- and also to take different methods to further enhance the values. And also, we are planning for cash dividends, equity incentives and share buybacks. Wansheng is the world's leading new functional material company. Right now, after COVID -- during the COVID, the whole industry has been sizing up and become more competitive. And because of this, the profit has been down by a little bit. However, Wansheng has been enhancing operation capability through supply and sales synergy and focusing on base development with accelerated construction, driving innovation through technology advancement and broaden product portfolio through prioritizing quality industries. In Weifang base, the IPO-funded projects and over 76,000 ton annual specialty functional materials have entered pilot production. And we believe after the output and installation, the commissioning, we will see good results. And we have already completed the [indiscernible] product. It is a very good company. And we will further drive innovation through technology advancement, the new nylon flame retardants completed pilot production with performance highly recognized by customer, multiple specialty resins and antistatic agents successfully trial produced. So that's my report on the first half performance. Next, I'll give the floor to Xu Xiaoliang to talk about strategic development.

Dear investors and analysts and friends, press from the media, good morning. I will now report to you a reflection of Fosun's strategic development. Since its founding in 1992, Fosun has journeyed through 33 years of growth, evolving across different stages and economic cycles. Over time, we have continued to optimize our industrial structure and steadily enhancing our global competitiveness. With the external environment changing all the time, Fosun's mission and vision of creating happier lives for families worldwide remains unchanged. We aim to create a global happiness ecosystem, fulfilling the needs of families worldwide in health, happiness and wealth. For all the work that Fosun does, it's all about delivering our vision and mission. So centering around this vision, Fosun has sharpened its strategic focus across several dimensions. The first is business streamlining. We are focusing on the family consumption sectors to scale and reinforce our competitive companies while decisively divesting noncore businesses. The second is capital intensive to asset-light. We are enhancing partnerships with domestic and international capital, improving asset-light operations and using light to drive heavy. The third part is balancing investment and divestment, balancing offense and defense, advancing high-value projects while safeguarding our operational fundamentals. The fourth part is technology innovation. We are committing to technological innovation, driving industry upgrades and building core competitiveness. Over the past year, Fosun has further developed business consensus and organizational consensus. I will now talk about these 2 parts. First, in terms of business consensus, the first important consensus is globalization. Fosun is one of China's leading privately owned enterprises with a truly global footprint and operating capabilities. In the first half of this year, we reached a new milestone in globalization, with overseas revenue accounting for 53% of the total. We have moved from China momentum, leveraging global resources to China capabilities leveraging global resources. And these capabilities are reflected in several dimensions. The first is global R&D and BD capability. We see that Henlius innovative drug, HANSIZHUANG, has now been approved in over 30 countries and regions worldwide. HLX43 has also entered international multicenter Phase II clinical trials. The second is global investment capability. Fosun Pharma has partnered with a leading Saudi health care group to bring innovative therapies to Saudi Arabia. Hainan Mining has also launched the pilot production of Phase 1 at Bougouni lithium mine in Mali. In terms of cultural export capability, the Yuyuan Lantern Festival in Thailand concluded successfully, celebrating the 50th anniversary of China-Thailand diplomatic relations. For the Yuyuan Lantern Festival in Thailand, spanning across 55 days, it attracted over 4 million visitors. In terms of global operation capability, Fosun Tourism Group has fully implemented the group's asset-light strategy to upgrade global resorts. And Club Med achieved new record highs in the first half of this year. And another important part for Fosun's business consensus is going into the flywheel model. Today, Fosun has entered a stage of deep industrial operations where we have established a flywheel model driven by insurance capital plus investment plus industrial operations. That is based on Fosun's deep understanding across different industries, our rich investment experience and high-quality commercial resources so that we can use insurance to connect with more investment parties and then empower our industrial operations for win-win-win. Now Fosun exploring flywheel projects in senior care, high asset management and tourism, we will keep involving in these dimensions and accelerate industrial high-quality development. The third business consensus is building marketing force. In today's complex and highly competitive market environment, Fosun has built strong marketing force to better connect products with customers. We are seeing solid results in the first half of the year. For Fosun Pharma, it further strengthened its global market presence and marketing system with about 5,000 sales representatives in China and over 1,000 overseas. As for Shede Spirits, in the first half of this year, it took a forward-looking approach to marketing and channel development for its T68 product. Despite industry headwinds, T68 still achieved a breakthrough, with sales up by 23% year-on-year. And Fosun Tourism Group is also capturing the rebound in inbound tourism. For Atlantis Sanya, in the first half this year, they saw a 71% year-on-year increase in international visitors. And Club Med China saw inbound revenue rose by 65%. As for Fosun Insurance Portugal, it has advanced organizational upgrades with marketing support, staying close to customers and market needs while driving product innovation. In the first half of this year, its savings insurance sales in Portugal exceeded EUR 1 billion, up by more than 40% year-on-year. The fourth business consensus is AI application. At Fosun, we believe that those who use AI well will thrive, and those who don't will be left behind. That is why we are driving adoption of AI across the entire value chain. For example, AI -- using AI to accelerate R&D for stronger product innovation. Fosun Pharma has launched PharmAID, the industry's first AI decision-making platform empowering drug discovery, smart health care and precision medicine. With PharmAID, information extraction efficiency has improved by 50%. AI can also be adopted to enhance customer experience for stronger marketing power. Club Med has developed its AI G.O., a travel agent that personalizes and streamlines the entire vacation journey while significantly improving operational efficiency. And another part of consensus is organizational consensus, in order to implement our strategies and business goals, ultimately, it depends on organizational support. Fosun's strength emphasizes building water-like organizations. We emphasize that there is no fixed formula for management, what fix best is best. And there is no unchanged formula for management. Management should be dynamic. On the talent front, Fosun is emphasizing leaner and flatter organization. As for our talent team, we are focusing on building talent pipeline, and we are building a multilevel partnership system. Now, we have about 160 global partners. And in the first half of this year, for the first time, Fosun Group has been implementing the Hypo-Partner Program. In the first half of this year, we selected 44 Hypo partners, preparing for the future leaders of Fosun for its long-term development. In terms of mechanism, first, we emphasize a meeting mechanism for organization, for business, for fund for the capital, we have different parts of meeting mechanisms. The second part of mechanism is incentive mechanisms to be aligned with our values and to match the long-term values. In terms of culture, we remain true to the founding spirit of co-entrepreneurship, continuously strengthen our shared commitment. Guided by our cultural principle of rule rationale and relationship, our global governance ultimately centers on the rule of law with the protection of shareholder rights as the baseline and maximizing shareholder value as the goal. Self-improvement, teamwork performance and contribution to society is our original aspiration of holding business for good. We are committed to sustainable development and creating value for all stakeholders. In the past half year, Fosun's ESG performance has continued to improve. On the environment front, we aim to achieve peak carbon emissions by 2028 and carbon neutrality by 2050. We have also conducted climate risk assessment and released the third climate information disclosures report. On the society front, the rural doctors program was established in 2017. And over the past 8 years, the program has supported 25,000 rural doctors, benefiting 3 million families in rural communities. And the artesumate for injection has saved the lives of over 84 million severe malaria patients worldwide. As for governance, we have strengthened our ESG governance framework and incorporated ESG performance into the Board's evaluation system. And Fosun's strong ESG performance has been widely recognized by leading domestic and international institutions, and we have been included in key industry indices. Our MSCI ESG rating has remained at AA for 4 consecutive years. And Fosun International has received the ESG Leading Enterprise Award from Bloomberg Businessweek Chinese Edition for 5 consecutive years. That concludes my sharing on Fosun's strategic progress. Today, while the global economy is still in a slow recovery and filled with uncertainties, Fosun will continue to sharpen its strategic focus. We will solve development challenges through growth itself and navigating future cycles with a long-term mindset. We are committed to creating greater value for our shareholders and society and to make families around the world happier. Once again, I would like to thank all of the investors for your long-standing support. We also welcome you to visit Fosun to experience our products and our happiness ecosystem. I wish all of the families happy, healthy and wealthy. Thank you.

Thank you for the management. And next, we will move on to the Q&A session. I will invite the seated guests here to ask questions. We will give you a microphone. Okay, the lady in the front. Okay.

Thank you, and I'm very honored to be able to ask the questions. I'm from the [ Nation Security ]. And I've noticed that today, the topic is from shared vision to greater horizons. And we're also seeing that in the first half, Fosun International has made breakthrough and innovative results. And I mean, Chairman Guo always says that the company needs to insist on doing the right thing, the difficult thing, especially the things that requires time. So my question to the management team is that, in the second half, what is the things that we will be -- keep moving on? And what is the sector that we will be focusing?

And the question would be answered by Chairman Guo.

Okay. So the question is about the sector. So in the first half, we are seeing the recovery from the consumption sector. And also for the innovations and innovative drugs, we are seeing the breakthroughs. So we are very confident about our business and the future growth. So going forward, for the innovative drugs, we not only have Henlius, but also CAR-T and maturing drug segments. So we will have great potential in innovation and smart innovation. I have been thinking about this. Several years ago, we mentioned that we want to have people to live happily, healthily and wealthily until 120 and the cancer can be cured. In 7 and 8 years ago, it may seem a little bit not going to happen. But I think right now, we all believe that a lot of cancers can be detected and can be cured or can be controlled. So we are seeing the development in the industry and also, we are seeing great potentials. In our pipeline, we also have great products in our pipeline that has the USD 5 billion or even USD 10 billion potential in our pipeline. And I have been strengthening this to the team. We cannot just sold out. I think licensed-in and licensed-out, both are very important comparing to other Chinese pharmaceutical company. We need to have our uniqueness. We need to be able to build our own global R&D, clinical trial and sales capabilities. So this has been promoted by our teams. And we are aiming to become a big pharma in the global market. And this is our path to become the big pharma. Licensed-out is simple and can be sold in a very high price, but we are very patient. I believe that our products in the pipeline is very good. And also, I want to share another comment with you. The technology is developing very rapidly. And why is that? I want to share some of my thoughts, especially in the past 5 years and 10 years. We believe that humans are carbon-based animals, and we have seen great potential and breakthroughs in our gene development and our gene study. As for AI and robotics, they are also growing and developing rapidly. So if we combine both, we would see great potential for innovation in the future, and it would be hard for us to imagine. For Fosun, our vision is to let the families to live happily, healthily and wealthily until the age of 120. So we are seeing great breakthroughs in the pharmaceutical businesses. I'm not an expert in cancer, but my team told me that the cancer cannot be cured by one molecule. It would be relying on different methods, including the medical devices, the different molecules. It's sort of like a cocktail therapy. The combination of therapies can cure cancer. And I think Fosun has a unique advantage because we have a very comprehensive footprint, and so we are in different sectors. And we believe that if we want to cure cancer or if we want to solve the difficult problems, we need to rely on different solutions and comprehensive energy and capabilities. And Fosun Pharma has its uniqueness. We can sell the new alcohol. We also rely on the aged alcohol. And also, we rely on the things that needs requiring time. For Henlius, we have developed it for over 10 years. For the first 10 years, we invested over RMB 10 billion, and we didn't see any return. But right now, we are seeing it has been maturing. And the same thing for the liquor, we are selling the aged alcohol. And also for our insurance companies, one company we have been invested for over 10 years. The other, we have been invested in for over 12 years. So if you do not invest in one thing for over 10 years, you cannot achieve great competitiveness. So for me, I think if we enter a new sector, we prepare it for another 10 years, it might not be in line with our advantage. We need to focus on the sector and on the businesses that we have already been gaining the strength for over the past 10 years and keep routing it and keep developing it. So for us, the new sector is not our goal. What excites us is that we make breakthroughs in the sector that we have already entered in and also had the advantages. So that is our excitement. For aged alcohol, we also have innovation. I want to make an advertisement. Tomorrow, Shede Spirits will launch a new product with 29 alcohol degrees, and it's called Zizai. I think it would be beneficial for both customers, the first is who drink a lot. And if you want to free and showed a lower response -- if you want to free yourself, then 29 sub degree would be good. And if you're young and not that good at alcohol, then 29 Shede Zizai, that is also good for you. So we hope that if you have time and if you are interested, you can watch out for our new product launch.

Thank you, Chairman Guo, for your answer. We will now open to the second question.

I am from [indiscernible] Securities. I have a question about deleveraging. We see that Fosun Group has been adamantly divesting nonstrategic, noncore assets since 2022 to deleverage. So we noticed for the 2024 numbers and for the first half of 2025 numbers, the group consolidated statements interest-bearing debt level slightly rebound. So what's our interpretation on this?

Thank you for your question. We will have Chairman Wang to answer first, and then Alex Gong can add more things later. Chairman Wang is saying thank you for your question.

I would like to first say thank you to all of the investors and analysts and friends from media online and in the room. Thank you for your support for Fosun. Fosun is very clear on streamlining its business and focusing on development while streamlining our business while being more strategically focused. Our requirements, our management of financial indicators for deleverage, the key is about deleveraging for the parent company. And in terms of the business we are focusing on, we are controlling the leverage ratio and the debt amount. You are playing very close attention to this. I give you credit. For Fosun International's consolidated statement, the -- in terms of the debt level, excluding the FX factor, our debt level slightly reduced. At the consolidated level, indeed, as you mentioned, the interest-bearing debt level slightly increased. As Chairman Guo and the 2 CEOs mentioned, while streamlining our business, we are also focusing on developments for biopharmaceuticals, for FTG and other businesses where we are strong in, we still want to see great development for these businesses but that is based on ample cash flow and a healthy leverage ratio. At the consolidated level, let me take FTG privatization as an example. We privatized it through a share buyback, so this debt increase for FTG. As for Hainan Mining, they acquired an oil field in Oman. As for Fosun Pharma, for better development, they increased their debt level in a certain degree. But for these core businesses, they are in healthy financial situation. That is why we are seeing slightly increase in interest-bearing debt at the group's consolidated level. We are keeping improving our competitiveness for our businesses, and we are seeing strong improvement for the financing environment. Reducing debt and improving credit rating have been our goal, and we are very committed to it. We remain committed to our deleveraging goal, and we are making steady progress. Another thing we focus on is to reduce borrowing cost. When [ Ascom ] talked about the financial numbers, we can see that our cost of borrowing has been dropped by 50 bps compared to the same period last year, but this is far from enough. So we are keep having more efforts on lowering the cost of borrowings. That's all from me.

Thank you, Chairman Wang, for your answer. And we will open to the third question.

Hello. I'm from one of the Hong Kong family office. In the first half, as you know, that Hong Kong market is booming, especially the pharmaceutical segment. And we are seeing that Fosun Pharma and Henlius has announced many good news. So my question is that for the mid and long term, our strategic development and the core driver for the Fosun Pharma and the pharmaceutical segment?

Okay. Thank you for your question. The question would be answered by Chen Qiyu.

So in the past, as you know, that starting from the VBP, our strategic goal has been very clear. We are moving towards innovative drugs. Especially in 2021, the pharmaceutical segment has reached the peak. And the following 4 years, we are seeing the cool down period in the pharmaceutical sectors in the stock market, and the stock price has presented its challenges. This is because of the industry adjustment, the difference from the industry adjustment and the reception from the capital market. And the cooling down of the capital market has also made us to think clearly about our strategic future, whether we should do innovative drugs and how should we do that. So the trend in China market is that we need to move towards to the innovative drugs. We need to improve the innovative level. And also, we need to improve our vision and the value achievement, and we need to have a clear path for the values. So these are our requirements. So over the past few years, we made the strategic footprint and adjustments. I think you can see from the Henlius performance because it is independently listed. Before, the capital market only thinking about us doing the biosimilars. And also, they have concerns about our portfolio structure, only focusing on PD-1. Is it too slow? Does it have the potential? We need time to answer those questions and respond to those concerns. And we can see that Henlius not only have HANSIZHUANG, [indiscernible], such products, we're also seeing that Henlius has very good performance of the biosimilars, and it has become a very big and large player in the global biosimilar market and comparing to the U.S. biosimilar players. And also, we are comparing ourselves to the big names, we're collaborating with the many big players. The active biosimilar player in different markets, we are cooperating and establishing very good commercialization cooperation with them. That's why that we have a very strong pipeline. And that's the only foundation. And from the -- for the innovative product, the PD-1, although that the launch is late, but we have seen the indication is very unique. For example, for the SCLC and the clinical trials for the gastric cancer. And also, we are seeing the launch for markets in Europe, in the U.S., we are speeding up for the preparation and the clinical trials to prepare for the launch in the U.S. So HANSIZHUANG has already proved its successfulness, and it can prove that Henlius has strong capability in R&D and global commercialization. And right now, we are working on HLX43 and HLX22. It will further prove Henlius capabilities. So that's why that the capital market has already seen that we have strong foundation and also, we have strong capabilities. Actually, the cash flow from the products can reimburse our R&D expenditures. As for PD-1, HANSIZHUANG has already been proved its successfulness. We are moving very quickly, especially for LHS43 (sic) [ HLX43 ] from we start the project to clinical trial is moving very quickly. Before, we didn't do ADC. But right now, we are in ADC, we have very accurate and precise targets and also very efficient clinical trials. This has all demonstrating our capabilities. So we think that innovative drugs would play an even bigger role in our strategic development. So you're asking about our strategic development and core drivers. So I think down to -- we will be more focusing on innovation, and we will have innovation-driven growth. But for innovation, we also need to have a platform and foundation. Not only we need to have the map, we will also be relying on ADC and CAR-T. For CAR-T, for the cell body and the generic, we were moving from the customized to generic, and we will further build a CAR-T platform. And we are expanding in CAR-T. As for small molecule, we rebuilt a small molecule platform. We licensed out 2 self-developed small molecule products recently with the team rebuild, and we will further expand in traditional and new small molecule. We also built a radiopharmaceutical platform. And we are building the [ RNA ] and small asset platform. We will further build our platforms to speed up early study. I think for us, early study is very important. We need to have a strong pipeline in early study and then strengthen the clinical trials. For a big pharma, we need to have a strong early study and a strong platform. And also, we need to precisely select the molecule for clinical trials. We also need to further leverage the local development, R&D and clinical trial in China. Right now, the Chinese market has been highly recognized by the big names. This is because that we have strong capability and strong data. We also need to further enhance our BD commercialization capability. And also, we need to further focus on the licensed-out in different markets. And different markets has different uniqueness. For some markets, they rely on innovative drugs. And for some markets, we need to have both generic drugs and innovative drugs. Before, we're seeing the innovative drug and generic drugs are separated, for example, [ Our home ] and other companies, they are generic drug company. But right now, all of our companies are focusing on innovative drugs. Of course, different companies will take different projects and responsibilities but they will all moving forward to innovative drugs. And also, we will keep working on the globalization to achieve our value. So that's all for me. Thank you.