Fosun, Converging the Power of Growth

Shanghai, on the banks of the Huangpu River, at No. 2 Fuxing East Road, a 13-story building. Against the background of the surrounding high-rise buildings, he looks so simple and unpretentious. If it weren't for the "Fosun FOSUN" logo on the outer wall, many people might not realize that Fosun Group, the largest comprehensive private enterprise in China, lives there. Inside this slightly understated building.

However, this is another imposing building. Climb to the roof platform and look into the distance. You can have a panoramic view of the historic and cultural Bund Wanguo building complex and the modern and fashionable Lujiazui Financial and Trade Zone. Yes, this is Fosun's style, which is low-key yet aggressive, steady and full of passion, and shows the king's demeanor in every gesture.

Looking through the introduction to the Fosun Group, we can find that the industries involved in Fosun include everything from medicine, real estate, to steel, mining, retail, service, strategic investment and so on. In the face of such a diversified investment layout, Fosun Group has always firmly grasped the development direction of its industries, ensuring that it is always in a leading position in the segmented market in various industries. In 2010, Fosun ranked No. 1,264 on the Forbes Global 2000, No. 2 in Profit, No. 4 in Assets, No. 4 in Tax Payment, and No. 14 in Revenue in China's Top 500 Private Enterprises.

Investing around value

The history of Fosun Group is undoubtedly a history of capital operation to a large extent. Except for a few self-created companies such as Fosun Pharma and Forte Group, today's huge Most industries are formed through the mode of capital operation and industrial integration. As such an investment-oriented group, whether it can identify the right industry and enterprise for investment will undoubtedly determine the success or failure of the entire group's management and control to a large extent.

Nearly 20 years of growth has given Fosun a lot of experience in how to choose investment targets. "When Fosun selects investment targets, a very important criterion is whether we can create value after entering this industry. This value is aimed at many aspects, including our shareholders, our customers, and our employees." Wang Qunbin, Executive Director and President of Fosun Group said.

In Fosun's view, whether an industry can create value or not depends on the level of industry growth, and this is closely related to the overall economic development background of the country. Regarding Fosun's focus on the retail and service industries over the years, Wang Qunbin explained: "The country is now continuously stimulating domestic demand, and the common people also have obvious demand for consumption upgrades. At the same time, the growth rate of the industry itself is faster than that of GDP. All of the above make us believe that the retail and service industry has huge growth potential in the future.” In fact, if we analyze it carefully, we can see that the consumer service industry accounts for about 40% of Fosun's total investment, which is also in line with the current development of China's economic structure.

In addition to considering whether the industry has high growth potential, the concentration of the industry, that is, whether the competition within the industry is fierce, also largely determines whether Fosun will invest in it. In 2002, it invested in Yuyuan Mall, and in 2003, it invested in Sinopharm The reason for holding a controlling stake is that at that time, the concentration of these two industries was relatively scattered, and Fosun could create greater value after entering.

Choosing the right industry is only the first step to success. To achieve a successful investment, you also need to find a suitable business. In addition to the invested company having a certain foundation in the industry in which it operates, Fosun also emphasizes that the company must have similarities with Fosun's corporate culture and values, and have a team with dreams and ambitions. An entrepreneurial team with long-term plans for the future development of the company. Fosun believes that only when such conditions are met, can this enterprise hope to become a truly outstanding enterprise in the industry, a successful enterprise and a sustainable enterprise after the cooperation.

In order to understand all of this, Fosun will communicate candidly with those teams when selecting cooperative teams. Wang Qunbin said: "We will communicate with each other. If we cooperate, then what do you hope to accomplish with this enterprise? What does it look like? What is the development goal of the company? How to achieve the sustainable development of the company? These are the important contents of our discussions. If we finally communicate and find that the goals, cultures and ideals of both parties are consistent, then we will reach the goal. Together, if we feel there is a difference, then we will communicate again and look for opportunities to cooperate in the future."

In 2008, Fosun's investment in Focus Media was a perfect interpretation of the above points. "On the one hand, the industry in which Focus Media operates is undergoing rapid development, and at the same time it belongs to the retail service industry. On the other hand, Focus Media is also a leading company in this industry, which is also a very important point. The three are that we think the team with Jiang Nanchun as the core is still very good, very hardworking, very dedicated, very innovative, and the focus of the model is also a global innovation. So we invested in him." Wang Qunbin said with pride .

In place, but not offside

“Our positioning of ourselves is to be a positive, responsible and good shareholder. In short, it is to be in place: in place, but not offside. "Wang Qunbin told reporters.

In order to achieve such a goal of "being in place, but not offside", after investing in an enterprise, the first thing Fosun does is to improve the composition of the board of directors, including introducing some experts, etc., to realize the corporate governance structure. The improvement of the company will lay a solid foundation for the enterprise to enter the road of sound development.

Taking Sinopharm Holding, a subsidiary of Fosun as an example, in 2003, Fosun invested in Sinopharm. Although Sinopharm was not a listed company at that time, under the promotion of Fosun, it still held meetings of directors and shareholders in accordance with the requirements of listed companies. , The management of the board of supervisors has been improved. Wang Qunbin recalled: "At that time, we introduced three experts to the board of directors, one was a financial expert, one was a legal expert, and the other was a management expert. This helped us to a large extent to improve their legal person structure. , which has laid the foundation for the improvement of the structure."

After the corporate governance structure is improved, Fosun will participate in the strategic decision-making of the enterprise through the dispatched representatives of shareholders and directors. This is also an important part of Fosun's management and control of the invested companies. At this point, Fosun will require its partners to have not only an annual plan, but also a three- to five-year strategic plan. If the company's three- to five-year plan is well done, Fosun will hope that they can make a ten-year plan, so that the entire enterprise can better think about some issues at the height of ten years.

In the process of formulating strategies, the method of systematic benchmarking has always played an important role. Specifically, these enterprises are required to invest in domestic or international excellent enterprises in the same industry as benchmarks, and many enterprises in the operation and management of enterprises are required to be benchmarked. The indicators are compared one by one. Through this comparison, we can find out where our weaknesses and strengths are, and also make the formulation of strategies more targeted.

"When we first invested in Sinopharm, Sinopharm's sales revenue was only the second in the country, and the profit might be the tenth. Therefore, at that time, it was mainly based on those excellent domestic companies to formulate and implement our strategy. After a year or two, when all the indicators of Sinopharm gradually reached the first place in China, we began to use the best companies in the world as benchmark targets to formulate strategies and improve management.” Wang Qunbin said. In fact, it is not only Sinopharm that uses benchmarking management. Fosun's important steel company, Nangang, aims at Baosteel and Wuhan Iron and Steel for cost control. According to their process standards, they regularly hold a special meeting on "benchmarking and tapping potential", and set the goal of reducing costs for various departments of the company, and finally achieve the goal of reducing costs. achieved remarkable results.

Actually, Fosun is like a huge learning platform, and its companies with diverse backgrounds can get help in all aspects through this platform. The management philosophy of Fosun Group has also penetrated from the top to the bottom through such a platform, and is even reflected between the joint-stock companies and its joint-stock companies.

In December 2010, Yuyuan Mall strategically invested in Wuyuan Tourism, accounting for 16% of the shares. Like Fosun's investment in Yuyuan, Yuyuan only exercised the rights of shareholders and dispatched directors and supervisors, but did not arrange management personnel in Wuyuan Tourism. It does not interfere with the operation of the original team.

This boundless flow of knowledge has greatly benefited the companies under Fosun, "Fosun is undoubtedly our ideal choice, whether it is its management team, business philosophy, or marketing model, it has brought us great benefits. A new side." said Yan Xiaohua, former chairman of Guilin Nanyao.

"In place, but not offside", among these six words, the last four words are actually more difficult to achieve. "Some of the companies we invest in are shares. In this case, it is generally difficult for you to be offside, but if you are a controlling shareholder, you will often be offside if you are not careful. We are always reminding ourselves of this point," Wang Qunbin said.

The constant vigilance against "offside" has made Fosun's investment journey smoother. Fosun respects and accepts the original management ideas and operation methods of the companies it invests in. According to Fosun's thinking, the companies that choose to invest are basically in a dominant position in the industry, and behind the dominant position of this company, there must be its successes, so Fosun does not need to invest in it after investing. A drastic change.

This approach ensures that Fosun can achieve complete professionalism in operations while diversifying its investments. While providing assistance to the companies it invests in, Fosun also fully understands and tolerates some of the actual situations of the companies.

“Fosun is a very good partner, Fosun understands the concept of modern corporate investment. After investing in Haixiang, Fosun gave us a lot of help, which helped us to improve our concept and management. It is very useful to us. Of course, the senior leaders of Fosun are very humble, they know how to run the company, they can understand some difficulties of the company, and they have given us full support. I think this is also the uniqueness of Fosun's investment success.” Haixiang Pharma Luo Bangpeng, chairman of the industry, said.

From a certain point of view, this kind of inclusive corporate culture has been formed as early as the beginning of Fosun's establishment. The closeness, trust and tolerance between the four entrepreneurs are deeply embedded in Fosun's The corporate culture keeps Fosun moving forward on the road of development.

Fosun's "non-offside" development process is also evident in its continuous "internationalization" in the past two years. In 2010, Fosun invested in the French CLUB MED Group. During the cooperation, Fosun fully recognized its own advantages and shortcomings. board, actively participate in its development strategy in China, utilize Fosun's brand promotion resources in China, channels and capabilities in the real estate business field, network of high-end people and the advantages of multi-industry and multi-regional layout to help CLUB MED Group in China Rapid expansion. At the same time, Fosun has not been too involved in the Group's development in other parts of the world. "When we make some international investments, we must reflect differentiation, and our differentiation is mainly due to our familiarity with China. Our strategy is, Chinese experts, global capabilities." Wang Qunbin said.

"Our current scale is still a small and medium-sized enterprise in the world, so we still retain the passion we had in the early days of our business." Wang Qunbin told reporters. It is believed that with the passion and the rich resources that the Group has developed over the past 19 years, Fosun will be able to continuously approach its corporate development goal of "becoming a world-class investment group focused on China's growth momentum".

Interaction between editing and reading:

1 Choose a suitable industry and a suitable enterprise for investment. What kind of experience do you have in this regard?

2 is in place, but not offside, how to grasp this degree, how to put yourself in a suitable position?