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Fosun Group's Financial and Capital Operation

The group invested widely but was able to keep control of its capital

Known as "Shanghai's Hutchinson Whampoa", Fosun Group is mainland China's largest privately-owned conglomerate. It can be said to combine the operational mechanisms of a private company with the assets of a state-owned business. Fosun took advantage of every financing opportunity it could on its way up. To succeed, it needed to use its capital in such a way as to maintain a steady cash flow.

 

Fosun Group started as a pharmaceutical business, and gradually invested in carefully selected firms to acquire equity and become a majority stockholder. In this way, Fosun Group has become one of the largest private corporations in China. Today, in addition to its core business, it is also engaged in the steel, real estate, mining, and finance industries.

 

In the process of its transformation from Fosun Pharmaceuticals to the Hong Kong stock market listed Fosun International, the corporation took full advantage of every financing opportunity available. The company knew it had to good use of its capital in order to avoid adversely affecting its growth, and that it needed a healthy and sustained cash flow. Only on reaching such a balance was Fosun able to achieve its preeminent position.

Case advisor: 
Liu Jun
Case writer: 
Gao Yuetao
Keywords: 
conglomerate, pharmaceuticals, private company, capital, cash flow, investment, assets, equity, stock market