UBS sets a target price of HK$9.1 for Fosun
HONG KONG, July 4, 2022 /PRNewswire/ — Fosun International Limited (HKEX stock code: 00656, “Fosun International”) said that UBS recently released a report on Fosun International. UBS believes that Fosun can manage short-term funding risks effectively and has assigned Fosun a “neutral” rating with a 12-month price target of HK$9.1.
UBS pointed out that if refinancing risks increase on China macroeconomic concerns, he believes that Fosun should be able to effectively manage short-term refinancing risks through a slowdown in investment and an increase in asset disposals. Fosun was able to refinance its onshore bonds with short-term commercial paper and an offshore bond with asset sales. UBS estimates that Fosun’s non-strategic listed investments can cover its bond refinancing needs over the next 12 months; Fosun’s execution in monetizing listed and unlisted assets should ease market concerns about its liquidity position.
UBS sees that Fosun is currently trading at a 63% discount to its net asset value (NAV), which is largely attributed to China macroeconomic concerns. UBS has assigned Fosun International a 12-month price target of HK$9.1an increase of approximately 26% compared to its closing price at HK$7.25 June 30.
In fact, S&P Global Ratings issued a report in early June, maintaining Fosun’s ‘BB Stable’ credit rating in the recent volatile market environment, demonstrating its affirmation on Fosun’s efforts in debt management and strategy. of endogenous growth. On June 23, S&P Global Ratings released another report, indicating that Fosun has sufficient resources to meet its upcoming debt maturities over the next six to 12 months. He believes the company could rely on asset monetization and stable banking relationships to manage its cash.
According to Fosun International’s 2021 Annual Report, Fosun International is in sound and sound financial condition. By the end of 2021, the ratio of total debt to total capital has fallen to 53.8%; the average cost of debt is at a historically low level of 4.6%; cash, bank balances and term deposits reached 96.78 billion RMB. In terms of cash and debt management, Fosun has always adhered to the principle of proactive management of maturing debts and continuous optimization of debt structure, and built financing capabilities with diversified financing channels. and wide market recognition. The Group and its subsidiaries have established partnerships with more than 100 Chinese and foreign banks around the world and have signed strategic cooperation agreements with many international banks and multiple Chinese banks. In the face of public market volatility, Fosun has made full use of its diversified funding channels to maintain stable liquidity.
Fosun has resolutely fulfilled its mission of “creating happier lives for families around the world”, strengthening its presence in four business segments: health, happiness, wealth and smart manufacturing. It is also one of the few companies China which has global operating and investment capabilities and has built strong technology and innovation capabilities. In the face of the volatile epidemic situation and numerous external uncertainties, Fosun has maintained a stable leverage ratio, high risk tolerance with its multi-currency debts and stable debt maturity, maintaining a healthy financial situation.
Going forward, Fosun will protect itself against market risks through a diversified business portfolio, global asset presence and “Profound Industry Operations + Industrial Investment” strategy, and will continue to adhere to strict management systems. financial and capital, to further consolidate the capital foundation of the company and seize opportunities amid fluctuations and changes in the global market, thereby making solid but bold strides for its growth and development.
Founded in 1992, Fosun is an innovation-driven global consumer group dedicated to providing high-quality products and services to families around the world in the segments of health, happiness, wealth and smart manufacturing. In 2007, Fosun International Limited was listed on the main board of the Hong Kong Stock Exchange (stock code: 00656.HK). In 2021, the total revenue of Fosun International was 161.3 billion RMB and the total assets amounted to 806.4 billion RMB. Fosun International ranks 589th on the Forbes Global 2000 2022 list, with an MSCI ESG rating of AA.