Goldman Sachs said while acknowledging the continued challenges from the macro environment such as weak consumption sentiment, geopolitics, higher interest rate, Fosun has proactively implemented its business streamlining and core business-focused strategy, centering family consumption, and enhancing asset-light operations, therefore, Fosun’s management is optimistic for the Company to weather through economic cycles. Goldman Sachs also recognized Fosun’s efforts in the disposal of non-strategy and non-core assets and its active efforts in exploring financing channels, thereby maintaining a steady debt to capital ratio. As of 30 June 2023, Fosun’s cash and bank balances and term deposits were abundant, reaching approximately RMB115 billion, its total debts to total capital ratio was 51.8% and the average cost of debt was around 5.3%, maintaining at a manageable level. In the first half of 2023, cash inflow from divestment amounted to more than RMB14.0 billion at the holding company level and more than RMB20.0 billion at the consolidated level. In January 2023, Fosun High Technology successfully entered into a syndicated loan agreement for an amount of RMB12 billion with eight domestic banks. As of 30 June 2023, the Group had no material offshore bonds due in one year.
Looking ahead, Goldman Sachs believed that after divesting its non-strategy and non-core assets, the Group would be able to focus more on its core businesses and empowering its subsidiaries to further improve underlying business performance in coming years. The firm sees value at the current level and looks for more signs of execution on deleveraging and earnings recovery, therefore it maintained its Buy rating on Fosun.