Fosun's listing of culture and tourism biz credit positive

    On July 4, Fosun International Limited (00656)(Ba2 stable) announced that it had received approval to separately list its wholly owned subsidiary Fosun Tourism and Culture Group (Cayman) Company Limited (FTC) on the main board of the Hong Kong Stock Exchange.
  Moody's Investors Service said the approval for the proposed FTC listing is credit positive for Fosun because it is likely to increase Fosun's portfolio value, and improve the transparency and liquidity of its investment portfolio.
  Fosun has identified the tourism and culture business as one of the most important
investment theme under its investment strategy. FTC includes businesses in the hotel,
tourism and other entertainment and culture-related areas, such as Club Med SAS (Club
Med), and Sanya Atlantis (Atlantis), and some other investments under Fosun's Happiness
Ecosystem segment.
  For example, Fosun privatized Club Med in 2015 and helped it to expand in China. Fosun also developed Atlantis, which includes one of the largest aquariums in China, a modern water park, and hotels and resorts. The resort was officially opened in May 2018. In addition to the tourism assets, as at the end of 2017, the Atlantis project generated RMB5,416 million in presales proceeds from selling residential vacation units.
  The public listing of FTC, if achieved, is likely to increase Fosun's portfolio value if the postlisting market value is higher than these investments' book value, lowering Fosun's market value-based leverage, thus improving Fosun's credit profile.
  The listing will also make these investments more liquid and, therefore, support Fosun's liquidity and cash flow. Moody's estimated that the FTC listing will further increase the proportion of listed companies in Fosun's investment portfolio, which the credit rating agency estimated was around 43% at the end of 2017. A higher proportion of listed companies will improve the transparency of Fosun's investments.