The sentiment in the Hong Kong stock market has significantly improved, and FOSUN INTL is expected to see a surge in value
The Hong Kong stock market sentiment is warming up, and FOSUN INTL is expected to see an increase in value. The Federal Reserve cut interest rates by 50 basis points and the People's Bank of China introduced multiple favorable policies, driving the overall market up. It is expected to release about RMB 2 trillion in liquidity, boosting consumption and market confidence. The Hang Seng Index has been rising continuously in this context, with a cumulative increase of over 12%
Driven by the 50 basis point rate cut by the Federal Reserve, coupled with a series of major favorable policies announced by Pan Gongsheng, Governor of the People's Bank of China, on September 24, the Shanghai Composite Index, Shenzhen Component Index, Hang Seng Index, and other indices experienced a general rise. Market sentiment significantly improved, and stocks with growth potential and solid fundamental value are expected to receive priority capital allocation. As a global leader in the innovative-driven global consumer industry with industrial layout in over 35 countries and regions, FOSUN INTL (00656) deserves a higher valuation from the market and is expected to take the lead.
Anticipating Reserve Requirement Cut, Hong Kong Stock Market Sees Profit Window
In today's global economic stage, the U.S. economy is like a giant stone thrown into the water, causing ripples that quickly spread to every corner of the world. Recently, the Federal Reserve made a significant 50 basis point rate cut. According to the Fed's forecast, the federal funds rate at the end of this year will reach 4.4%, within the target range of 4.25% to 4.5%, and is expected to decrease to 3.4% by 2025 and further to 2.9% by 2026.
Analysis indicates that as the Fed initiates rate cuts, the monetary policy space of various central banks further opens up. The Fed's rate cut helps alleviate capital outflows and exchange rate fluctuations in countries other than the U.S., promotes economic growth, boosts market sentiment, and drives stock market gains.
On September 24, Pan Gongsheng, Governor of the People's Bank of China, announced a series of major policies including reserve requirement cuts, interest rate cuts, and reductions in existing home loan rates, attracting high market attention. The market expects that the reduction in reserve requirement will release RMB 1 trillion liquidity. The reserve requirement cut announced on the 24th is the second cut of the year, totaling a 1 percentage point reduction in reserve requirement, providing the market with approximately RMB 2 trillion in long-term liquidity. The market anticipates that the favorable policies will boost consumer spending and market confidence.
From September 10 to 24, the Hang Seng Index has maintained an upward trend for 8 consecutive days, with a cumulative increase of over 12%. Against the backdrop of the rate cut cycle and the release of intensive favorable policies, the Hong Kong stock market is gradually entering an accelerated profit-taking and recovery window. Stocks with solid fundamentals and significant value are worth paying attention to.
Successfully Building a Series of Top-notch Core Industries, Enhancing Competitive Advantages
Since its establishment in 1992, FOSUN INTL has expanded its industrial layout to over 35 countries and regions globally, continuously enhancing its operational capabilities in globalization. It has now become an innovative-driven global consumer industry group.
In the first half of 2024, the four core subsidiaries—Yuyuan Stock, Fosun Pharma, Fosun Portugal Insurance, and Fosun Tourism—actively promoted a focused strategy, concentrating core assets on leading growth and value companies in their respective industries, all of which have achieved top positions in their industries, solidifying their competitive advantages.
At the same time, as a pioneer in globalization, FOSUN INTL's overseas business continues to bring stable profit expectations. In the first half of 2024, the group's overseas revenue reached RMB 45.87 billion, a 4% year-on-year increase, accounting for 47% of total revenue. High-quality global business is gradually becoming a new growth engine Among them, by focusing on its main business, FOSUN INTL continues to enhance its advantages in core industries such as pharmaceuticals, tourism, consumer goods, and insurance.
For example, in the insurance sector, in the first half of this year, Fosun Portugal Insurance achieved double growth in domestic and international business in Portugal, with overseas performance further increasing. International business recorded total premiums of EUR 885 million, accounting for over 30%; its MyFidelidade App has registered over 1.6 million users, exceeding 15% of Portugal's total population, with a 16% year-on-year growth in digital channel sales.
In the cultural and tourism sector, FOSUN INTL's light-asset operating model has also been remarkably effective, with Club Med, Sanya Atlantis, and Taicang Alps IP becoming benchmarks in the domestic tourism industry. Taking Club Med as an example, out of its 67 resorts worldwide, 85% are operated through leasing and management models, while self-owned resorts account for 15%. In the first half of 2024, its revenue reached a new high of RMB 8.89 billion, a 10.3% year-on-year growth. The Europe-Africa-Middle East and Americas regions continued to grow, with significant recovery in the Asia-Pacific region. In May 2024, Club Med also signed the first resort in the Middle East in Oman.
Today, under Fosun Tourism and Culture, Club Med is the global leader in exquisite "all-inclusive" vacations; Sanya Atlantis is a leading high-end integrated resort destination in China, driving Hainan tourism into the 3.0 era; and Lao Miao Huangjin under Yuyuan is a well-known Chinese time-honored brand and a nationally renowned jewelry brand. These top enterprises and products in their respective industries help FOSUN INTL continuously consolidate its leading position in relevant industries.
CAR-T Therapy, Innovative Drugs, Cutting-edge Medical Devices "Blossoming", Fosun Enters the Commercialization Window of Medical Health
Recently, CAR-T therapy in China has also made significant progress in various aspects. On the one hand, an increasing number of CAR-T therapies have been approved by the National Medical Products Administration, entering the clinical trial and market application stages. On the other hand, leading biopharmaceutical companies have announced new cooperation and research and development plans aimed at improving the efficacy and safety of CAR-T therapy. Governments at all levels are also increasing their support for CAR-T research and industrialization, leading to broader prospects for the application of CAR-T therapy in China.
In recent breakthroughs in cancer immunotherapy, CAR-T therapy has become a highly anticipated cutting-edge treatment method for hematologic malignancies, especially B-cell acute lymphoblastic leukemia (B-ALL). Among them, the Axicabtagene Ciloleucel injection (trade name: Yescarta) developed by Fosun's joint venture company Fosun Kite is the first CAR-T cell therapy product approved for marketing in China, with two indications already approved.
Now, with the annual national medical insurance negotiation officially launched, whether CAR-T therapy can be included in medical insurance has once again become a hot topic in the industry. In August this year, the National Medical Insurance Administration announced the list of drugs that passed the formal review for the adjustment of the National Basic Medical Insurance, Work Injury Insurance, and Maternity Insurance Drug Catalog for 2024, with four CAR-T products included, among which Fosun Kite is one of them With the maturity of CAR-T therapy, market demand, and the implementation of favorable policies, enterprises that have completed the layout of CAR-T products are expected to receive a commercial boost. Recently, Fosun Pharma announced its intention to acquire 50% of the equity of Fosun Kite held by Kite Pharma through cash investment. After the transfer is completed, Fosun Pharma will hold 100% of Fosun Kite's equity and plans to inject $10 million or the equivalent in RMB into Fosun Kite as a sole shareholder.
Market expectations are evident from the close collaboration between the two parties in promoting the rapid development of CAR-T technology and cell therapy product Yescarta® in China. The prospects for the development of cell therapy are promising, and Fosun is expected to usher in the next growth cycle.
Currently, in the health sector, Fosun's various innovative drugs, cutting-edge medical devices, and innovative therapies are blossoming. Fosun Pharma has 4 products with a total of 9 indications approved for marketing, 4 products with a total of 9 indications in pre-marketing approval/key clinical stages, and 9 products (calculated by indication) approved for clinical trials. Fosun Hanlin, independently developed and produced innovative biopharmaceuticals, continues to make breakthrough progress, with the world's first-line treatment anti-PD-1 monoclonal antibody Hansizhuo approved for 4 indications. On September 9th, Fosun Rui Medical Technology announced that the registration application for the revolutionary long-acting Type A botulinum toxin product DaxibotulinumtoxinA-lanm under the brand Daxifei® has been officially approved by the China National Medical Products Administration. This product is used for temporary improvement of moderate to severe glabellar lines caused by activity of the corrugator supercilii or procerus muscles in adults, becoming the first DaxibotulinumtoxinA-lanm botulinum toxin product approved for marketing in China.
In terms of cutting-edge medical devices, on September 6th, Intuitive Fosun's Ion bronchoscopy navigation control system completed its first commercial installation at the Shanghai Chest Hospital. This marks an important first step in the broader commercialization process of the Ion system in China, as well as a breakthrough in applying advanced minimally invasive robotic technology and better treatment outcomes to lung cancer treatment. It represents a breakthrough in the commercialization of natural orifice robots in China. As of the second quarter, Ion has been applied globally 680 times, with 120,000 surgical cases, earning a good reputation among hospitals and patients worldwide and proving its positive impact through research.
In addition to the health, cultural tourism, and insurance industries, Fosun's other business sectors are actively advancing their globalization strategy to accelerate performance realization. Yuyao Technology, a global leader in automation and digitization under Fosun, achieved overseas new orders of 3.99 billion RMB in the first half of 2024. On September 10th, Yuyao Technology's global headquarters was officially inaugurated in Jiading District, Shanghai, and its business in the automotive, new energy, and other fields will further radiate to the national and overseas markets. Hainan Mining announced on September 13th that its wholly-owned subsidiary, Locke Petroleum, plans to make a comprehensive tender offer of approximately 1.302 billion RMB for Tethys Oil AB, thereby acquiring the oil field rights in multiple blocks in the Sultanate of Oman. This acquisition will not only significantly enhance Hainan Mining's oil and gas business scale but also continue to solidify the global industrial layout of "mining + energy" It can be foreseen that with the commercialization of many globalization and innovation achievements, FOSUN INTL is expected to see a significant increase in value, accompanied by the market recovery, deserving a higher valuation