Fosun'S Travel Culture Hits Bottom And Rebounds?
After the interview, Qian Jianxing, chairman of the board of directors of the tourism group, was tired. But soon he took a new round of interviews. The outside world is full of concern about how to realize the recovery of Fosun travel culture this year, which requires Qian Jiannong to spare no effort to solve doubts.
Indeed, according to the financial report data released in the first half of this year, the company suffered the most difficult time since its listing due to the impact of the epidemic. In the first half of this year, the company's revenue fell to 4.536 billion yuan (RMB, the same below), and the net profit loss was 899 million yuan.
The company's year-end performance forecast of Fosun travel culture is not optimistic. According to the consensus forecast of seven institutions in wind statistics in recent half a year, the company may lose 1.2 billion yuan in 2020.
"What enterprises can do is how to respond positively and recover quickly when the crisis comes." In an interview with the 21st century economic reporter, Qian Jiannong believed that the recovery degree of Fosun travel culture is far more than that of its peers.
Another piece of news increased Qian Jiannong's confidence. On November 10, it was reported that the new mRNA crown vaccine developed by Fosun Pharmaceutical Co., Ltd. had made a major breakthrough recently, and once ignited the aviation tourism stocks. The stock price of Fosun travel culture also reported a big rise on the same day.
Thanks to the breakthrough in vaccine research and development, does Fosun travel culture really usher in a rebound?
Fall into a loss spiral
In the third quarter performance announcement released in late October, Fosun travel text was "hard to hide" helpless.
In the first three quarters of this year, the company's business turnover of resort and tourism destination operation, tourism leisure and solutions dropped to 5.983 billion yuan. In the same period last year, its turnover was 11.732 billion yuan. Although no profit was disclosed, Fosun Travel & Culture issued an early warning in the announcement: the board of directors of the company predicted that the epidemic would continue to have a significant negative impact on the group's annual turnover in 2020, and it was expected to record a loss in the second half of the year.
Affected by the epidemic situation, Fosun Group's "healthy, happy, rich" three major plates can be described as two ice fire days. According to the financial data of the first half of the year, the "happy" business, as the largest source of income of the group in the past years, still maintained its position as the largest revenue source, but it was not immune to losses as a whole. During the reporting period, the business income of this sector reached 26.940 billion yuan, down 12.8% year on year; and the loss was 392 million yuan, becoming the only business segment with loss among the three major businesses.
The 21st century economic reporter has noticed that even within the "happiness" plate, the operation of major companies is also divided. In the first half of this year, the performance of Yuyuan group increased against the trend, and the net profit reached 1.105 billion yuan. However, Fosun travel culture has changed from profit to loss, and the amount of loss is large.
Considering the negative impact of the epidemic on different industries, Fosun lvwen is not as "lucky" as Yuyuan shares.
As one of the three strategic businesses of Fosun Group, Fosun is one of the important carriers of "happiness" plate, and Fosun travel culture is positioned as a high-end leisure resort.
In the whole business system of Fosun Group, the company is the typical product of the group's globalization strategy. In 2010, Fosun Group invested in Mediterranean Club (hereinafter referred to as Club Med) to enter the tourism and cultural industry. This acquisition also injected the gene of "foliday" ecosystem of Fosun tourism culture. With the subsequent acquisition, incubation and industrial integration, Fosun tourism consolidated its leading position in the family leisure and holiday market, and realized the company's goal of balancing market and destination and dispersing regional operation risks. According to the revenue structure, in 2019, Fosun will travel in Europe, Middle East and Africa, Asia Pacific and America
The regional revenue accounted for about 48%, 38% and 14% respectively.
It is worth affirming that, until the outbreak, Fosun lvwen was tasting the sweetness of globalization. In 2018, the company turned losses for the first time, and continued to make profits in 2019.
However, the "black swan" disrupted the pace of development of Fosun travel and culture. Financial data show that due to the impact of the epidemic, Fosun tourism's revenue in Europe, the Middle East and Africa, the Asia Pacific region and the Americas has declined sharply in the first half of this year.
"Now the epidemic has brought different degrees of impact on the global tourism industry." According to Qian Jiannong's analysis of 21st century economic reporters, regional structural differences are very large, which leads to changes in the pattern of global tourism industry.
Take the European, Middle East and African markets of Fosun travel and culture as an example. In the first half of this year, these regions contributed more than half of the revenue of Fosun travel and culture, realizing an income of 2.395 billion yuan, down 43.2% year-on-year. However, the Asia Pacific region saw the largest drop in revenue, with a year-on-year decrease of 66.3%, and the proportion of revenue dropped to less than 30%.
However, since the third quarter, the Asia Pacific region, represented by the Chinese market, has become the "pioneer" in the business recovery of Fosun travel culture. The operation data of the two major product brands disclosed by the company confirmed this point: Sanya Atlantis received about 1.8 million visitors in the third quarter, with a year-on-year increase of 13.3%; after the localization of Club Med, the domestic occupancy rate data was bright. During the national day, the average occupancy rate of the five resorts in China was close to 90%, with an increase of 6% compared with last year.
"We are paying attention to regional recovery and development and cost saving. At the same time, more importantly, we are increasing corporate cash flow to continue to respond to the impact of the epidemic on companies. " Qian Jiannong said.
Turning to regional markets
The business data of the National Day holiday let Qian Jiannong find the key to the further recovery of Fosun travel culture.
"Structural changes between businesses will also be exacerbated by products." When it comes to the development trend of tourism products under the flag of Changxing travel in the 21st century, when it comes to the development of tourism products under the flag of Changxing travel, it will not be the same in the development of tourism products under the club in the 21st century The operation of MED and Atlantis products during the National Day exceeded that of the same period last year, and the growth rate was "more than double-digit compared with last year".
In fact, like other enterprises, Qian Jiannong led Fosun lvwen's response to the impact of the epidemic is not special: saving costs, increasing cash flow and adjusting strategy.
Under the epidemic situation, survival is the best. The 21st century economic reporter learned that, taking Sanya Atlantis, a subsidiary of Fosun lvwen, as an example, the company saved 120 million yuan on this project in the second quarter.
At the same time, Fosun lvwen is also lucky. In March this year, the company raised 7.001 billion yuan through the issuance of "Debang Haitong Fosun lvwen Sanya Atlantis asset support special plan" (namely commercial mortgage-backed securities, CMBS). This bail-out has greatly increased the cash flow of Fosun travel. As of the first half of this year, the balance of cash and cash equivalents at the end of the year was 6.255 billion yuan, an increase of 265% over the same period of last year.
"After the end of the epidemic, if you have enough cash reserves and enough viability, the industry will definitely have more opportunities for mergers and acquisitions and industrial integration in the future." Qian Jiannong believes that every crisis will bring an improvement to the industry.
However, for Fosun travel culture, the "regional market" strategy may become the main strategy for the company to achieve recovery in the short term.
The 21st century economic reporter has noticed that the characteristics of regional differentiation are affecting the organization's judgment on the recovery of Fosun's tourism and cultural performance. On November 17, CICC released a research report that the spread of overseas "secondary epidemic" led to Fosun lvwen's overseas loss in 2020 or higher than expected, and lowered its profit forecast to a loss of 1.835 billion yuan. However, CICC maintained the "overweight" rating of Fosun travel culture industry, and was optimistic about its long-term development.
With high-end brands such as Club Med, Atlantis and Thomas Cook, Fosun tourism has created a moat in tourism products. Up to now, the resort business, one of the core businesses of the company, has been unable to release its performance due to the partial closure of Club Med resort. However, Fosun travel culture is trying to seek more growth momentum for this brand in the domestic market.
During this year's Expo, club med of Fosun travel culture completed the contract with Chengdu rongchuang skiing school and Julong ski resort, adding two skiing colleges in rongchuang snow world and Julong international tourism resort. Qian Jiannong commented that the company is actively improving the quality of holiday products to meet consumers' higher demand for leisure and vacation after the epidemic, help the market achieve economic recovery, and strive to promote domestic and international dual circulation.
Sanya Atlantis project, which performed well during the National Day holiday, reflects the anti risk ability of high-end tourism product projects in the post epidemic era. "Sanya Atlantis is a rare high-end product in China. To some extent, it has replaced a lot of consumer demand that cannot be exported and has high requirements for tourism products," a tourism industry analyst told the 21st century economic report As a result, Fosun travel culture is trying to copy this model and layout the Fuyou city projects in Lijiang, Yunnan Province and Taicang, Jiangsu Province.
It is worth mentioning that Fosun travel culture is further bound to Hainan. On the eve of this year's national day, the company signed a strategic cooperation framework agreement with Hainan Development Holding Co., Ltd. to deepen the Hainan market, promote cooperation in tourism retail, domestic and foreign passenger flow into Hainan, development and operation of high-quality tourism and commercial projects.
Although the recovery momentum is booming, Fosun travel culture still needs to face up to it. There is still a long way to go for its business to really "walk out of the dark".
At present, Europe is in the second wave of outbreak, Sanya Atlantis rapid rebound phenomenon is difficult to fully replicate. The aforementioned analysts told the 21st century economic report that the real recovery point of Fosun tourism may be after the first quarter of next year, and this time point is closely related to the development process of vaccine.
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