Global Leading Leisure-Focused Integrated Tourism Group Fosun Tourism Group Lists on the Stock Exchange of Hong Kong

Creating the FOLIDAY Global Tourism Ecosystem to Enhance Competitive Advantage

HONG KONG, Dec. 14, 2018 /PRNewswire/ -- Fosun Tourism Group ("Fosun Tourism", together with its subsidiaries, the "Group", Stock Exchange stock code: 1992), the world's leading leisure-focused integrated tourism group, and the largest leisure tourism resort group worldwide in terms of revenue in 2017, has made its debut on the main board of The Stock Exchange of Hong Kong Limited today. A total of 214,400,000 shares were offered globally and priced at the offer price of HK$15.6 per share in the initial public offering. The shares are traded in 200 shares per board lot. Mr. Qian Jiannong, Chairman of the Board, Executive Director and Chief Executive Officer of Fosun Tourism, Mr. Guo Guangchang, Chairman of Fosun International Limited ("Fosun International", Hong Kong Stock Exchange stock code: 656), the controlling shareholder of the Company, as well as Mr. Wang Qunbin, Chief Executive Officer of Fosun International, attended the listing ceremony, witnessing the start of a new chapter in the history of Fosun Tourism Group.

Mr. Qian Jiannong said when he was giving a speech, "The listing is an important milestone for Fosun Toursim Group. We will, as always, continue to provide innovative and upgraded leisure tourism products and services to consumers around the world through internal organic growth, new business development, and global industry integration, to achieve continuous and steady growth in the business performance of Fosun Tourism, creating value for consumers around the world, as well as shareholders and the society."

Fosun Tourism had turned around and recorded a positive adjusted net profit in the first three quarters of 2018. As a tourism group established in recent years, Fosun Tourism has been active in the integration and upgrade of the global industry chain of tourism consumption and has attracted attention from the industry. It built the FOLIDAY ecosystem that has disrupted the industry, leading an unstoppable trend, and creating outstanding performance. According to industry experts, the existing highly homogenized competition has posed serious challenge to the development of the tourism industry. Consumption upgrades have put forward new requirements for tourism products and services. Fosun Tourism focuses on the family leisure tourism market, leveraging its global capability, it has embarked on a path of divergence in model and product innovation.

With increasing disposable income and more leisure time available, Chinese and global consumers' purchasing power on leisure tourism has been increasing, which in turn has driven the demand for, as well as spending on, products and services in the global leisure tourism market. The tourism industry is at an important stage of consumption upgrade, with an obvious trend of transformation from sight-seeing to leisure tourism. In 2017, the world's leisure tourism market accounted for 58.5% of the total revenue of the overall tourism market, making it the largest component of the overall market. The compound annual growth rate of per capita tourism expenditure in China was 13.3% from 2013 to 2017. In 2017, the per capita tourism expenditure in China was approximately US$575.2 (approximately RMB3,887.6), which was significantly below the global average of US$740.8 (RMB5,007.0). This implies the great potential for the growth of China's tourism market.

The establishment of Fosun Tourism was in line with this changing trend of tourism needs of global family consumers. The Company is at the forefront of the integration of leisure tourism industry on a global scale.

Fosun Tourism's innovative strategic model has gained recognition from the capital market. Before the public offering, the Company had entered into cornerstone investment agreements with Step Ahead International Limited, a wholly-owned subsidiary of Shun Tak Holdings Limited, China Suchuang Energy Co., (Hong Kong) Limited, a wholly-owned subsidiary of Suchuang Gas Corporation Limited, and Taobao China Holding Limited, an indirect wholly-owned subsidiary of Alibaba Group Holding Limited. The international offering was moderately over-subscribed, reflecting the recognition and confidence of the capital market in the prospect of the Company.  

The Group has three major business segments: resorts, which the Group operates through Club Med, the world-renowned resort brand of French origin that the Group acquired in 2015, and Club Med Joyview, which was launched in 2018 to specifically cater for the fast-growing Chinese market; tourism destinations that the Group develops, operates and manages, including Atlantis Sanya; and services and solutions in various tourism and leisure settings. As of 30 June 2018, the Group had 69 resorts in over 26 countries and regions, and had operations in over 40 countries and regions.

Fosun Tourism's unique FOLIDAY ecosystem provides global families with a wide array of tourism- and leisure-related solutions. The Group provides resorts and tourism destination offerings to customers through Club Med, Club Med Joyview and Atlantis Sanya, which are key components of its ecosystem. Through the FOLIDAY platform and the Group's alliance with Thomas Cook, the Group assists customers in planning their vacation and tailoring its product offerings to their specific needs. The other services include child-focused activities, such as Miniversity; entertainment, provided through Fanxiu; tourism destination management by Albion; and membership services, provided through the Foryou Club membership program. The FOLIDAY ecosystem integrates different tourism and leisure solutions into one platform and continuously replenishes the Group's customer-to-maker ("C2M") global system. The FOLIDAY ecosystem is not a simple combination of brands. Instead it creates an effect of 1+1 greater than 2 through a lot of synergy.

Apart from the innovative FOLIDAY ecosystem and business model, Fosun Tourism has also demonstrated outstanding operational capabilities in operating resorts and tourism destination businesses, continuously improving their profitability. Fosun International acquired Club Med in February 2015, as a result of a number of post-acquisition improvement measures, including the aggressive asset-light expansion plan, the sustained high-end strategy, leveraging China's growth drivers, and effective management incentive, etc., within just three years, the Group's resorts segment, which is largely centered around Club Med, has undergone significant improvement in performance. In 2016, the second year after the acquisition, the operating performance of the resorts segment already turned around and recorded an operating profit of RMB209.2 million. In 2017, the operating profit of the resorts segment increased to RMB464.4 million, implying a year-on-year growth rate of 122.0%.

On the back of strong improvements in Club Med's results of operations, for the year ended 31 December 2017, the Group recorded a revenue of around RMB11.8 billion, increased by 9.1% compared with the previous year, and an adjusted EBITDA of RMB746.3 million, increased by 18.4% year on year.

The development and management of tourism destinations has also begun to bear fruit, leveraging Fosun Tourism's many advantages in destination development and construction, such as its global brands and its strength in developing tourism destinations. Shortly after the official launch of Atlantis Sanya in April 2018, the occupancy rate already increased from 41.5% in May 2018 to 79.3% in July 2018. Product upgrade and product differentiation are the key to the rapid growth of the tourism destination business of Fosun Tourism. The growth is expected to sustain, especially when Atlantis Sanya entered maturity next year and beyond, we believe its performance will bring another surprise to the industry. The expected launch of entertainment shows catered to family audience before the Chinese New Year next year, as well as the gradual transfer of the ownership of the salable residential vacation units, may contribute to the increase in number of visitors to the project. The revenue of the commercial part of the project and the water park is expected to increase significantly next year. In addition, the Group has started the design of the tourism destination projects in Lijiang of Yunnan province and Taicang of Jiangsu province. The construction of the Lijiang Project is expected to commence by the end of 2018 and is expected to be completed in stages starting from either late 2020 or early 2021 and achieve full completion in the following two to three years. The construction of the Taicang Project is expected to commence in stages in 2019. It is expected to be completed in stages starting from late 2020 and achieve full completion in the following three to four years. The construction and completion of the new projects will continue to add momentum to the future development of the Group.

On the back of the steady growth of Club Med and the rapid development of Atlantis Sanya, for the nine months ended 30 September 2018, the Group recorded positive adjusted net profit, and positive EBITDA and adjusted EBITDA.

After the listing, the Group not only becomes more integrated into the global capital market, with its brand awareness enhanced internationally, it also plans to use the proceeds raised from the offering to further develop the existing business, including the resorts business, develop its digital technology infrastructure, enhance branding, promote sales and marketing activities, and develop kid learning and playing business as well as culture and entertainment business. Furthermore, the Group will also use the proceeds to develop the Lijiang and Taicang projects and explore new tourism destinations with valuable resources.

The listing is just a new beginning. As Fosun Tourism's ambition comes true, riding on the market opportunities from consumption upgrade, the Group is set to attract wider attention, as Qian Jiannong said, "We strive to make the concept of 'FOLIDAY' a synonym for tourism and leisure vacations widely recognized by families around the world, and realize our vision of bringing greater happiness to global families."

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