[ET Net News Agency, 6 September 2018] Daiwa Research initiated coverage on Fosun
International (00656) with a "buy" rating and a target price of HK$22.
The research house said Fosun "buys & operates" its portfolio companies on an open
platform, and its investments and operational initiatives reciprocate each other. Second,
many ecosystems among its portfolio companies are in the making, migrating its offline
customers to online and integrating Fosun's individual product offerings. Third, Fosun's
long-term overriding investment principle is to match its global investment strategy with
rising retail demand in China.
Unlike some in the market who believe Fosun will become China's Berkshire Hathaway, or
the next Ping An (02318), Daiwa sees it as distinct from both companies. Indeed, Daiwa
views Fosun's retail-focused ecosystems fostered across its portfolio companies as more
comparable to Alibaba.
Daiwa forecast a net profit CAGR of 18% of Fosun over 2017-2020 and a rising ROA from
2.6% in 2017 to 3.2% in 2020. (KL)