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Fosun’s Journey: A Remarkable 10-Year Investment in Portugal
HONG KONG, Dec. 1, 2024 /PRNewswire/ — This year, China and Portugal celebrate the 45th anniversary of their diplomatic relations, along with Fosun’s tenth anniversary of engagement in the Portuguese market. Fosun, a leading consumer group from China, has become the largest Chinese private enterprise in Portugal since it entered the market in 2014. Its investments primarily span insurance, banking, and healthcare, featuring notable entities like Fidelidade (Portugal’s largest insurance company), Luz Saúde (a major healthcare group), and Millennium BCP (Portugal’s largest listed privately-owned bank).
Maintaining the strategy of being “rooted in China and globally operated,” Fosun has progressively increased its investment presence in Portugal. The company not only supports its local ventures but also actively promotes their growth into international markets, especially within Portuguese- and Spanish-speaking countries. This exemplifies a successful Sino-Portuguese economic partnership.
Investment in Portugal: A Strategic Entry
The Eurozone financial crisis of 2013 left Portugal in a severe economic state, marked by an unemployment rate as high as 17%. In response to public debt, the Portuguese government initiated several privatization measures. During this tumultuous time, Fosun identified a valuable investment opportunity.
In May 2014, Fosun successfully acquired Fidelidade, Portugal’s leading insurance company, for approximately €1 billion. This acquisition marked the start of Fosun’s investment journey in Portugal. Later, in October, Fidelidade, with Fosun’s help, bought a 96% stake in Espírito Santo Saúde’s hospital operations for €460 million, renaming it Luz Saúde.
After solidifying its position in Portugal’s insurance and healthcare sectors, Fosun gained recognition for its adept execution. Encouraged by a positive market outlook, the company acquired a 16.7% stake in Millennium BCP for €175 million in November 2016, later raising its stake to around 20%, thus reinforcing its influence in the country.
Synergistic Growth: A Unified Ecosystem
Fosun controls an 85% stake in Fidelidade, which holds approximately 30% of Portugal’s insurance market. Through years of targeted investment and operations, it has strengthened its unique “insurance + investment” model. Utilizing its resources, Fosun has enabled Fidelidade to broaden its asset allocation into real estate, tourism, healthcare, and consumer sectors across Portugal and Europe. This collaboration has stimulated mutual growth. As of June 30, 2024, Fidelidade reported gross written premiums of €2.808 billion, reflecting a 5.9% year-over-year increase, with net income reaching €104 million, up 5.3% from the previous year.
Operating 29 medical facilities, Luz Saúde is crucial to Portugal’s healthcare system, serving about 75% of the population and uniquely offering Chinese-language guidance. With Fosun’s support, Luz Saúde has expanded, creating nearly 1,000 new jobs. Furthermore, Fosun facilitated a partnership between UnionPay International and Millennium BCP, leading to the launch of Europe’s first UnionPay card by a local bank, enhancing financial access for international visitors in Portugal.
With Fosun’s support, the interconnected ecosystem of Fidelidade, Luz Saúde, and Millennium BCP has flourished, generating significant synergies across insurance, healthcare, and banking. For example, local families that purchase Fidelidade insurance can seamlessly access premium medical services through Luz Saúde and financial products from Millennium BCP, thereby increasing overall profitability.
Jorge M. Correia, Chairman of Fidelidade remarked, “We are witnessing a future where successful companies thrive on strong ecosystems. Our synergy in insurance, healthcare, and wealth management is a direct result of Fosun’s ecosystem approach, providing us with greater resources and achieving facilitated growth.”
Growing Overseas Markets from Portugal
Fidelidade’s success exemplifies the scalability and growth potential of Fosun’s business model. Chairman Guo Guangchang stated, “Portugal provides an open market, a favorable investment climate, and a government on the rise, making it one of our most significant places for investment.”
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Fosun’s Global Expansion: A Decade of Growth and Innovation in Portugal
Strategic Gateway for Investments
Fosun is mapping out its global development beyond China. The company aims to make Portugal a vital hub for investments in Portuguese- and Spanish-speaking countries, enhancing its reach into new global markets.
Strengthening Presence in Latin America
In early 2019, Fidelidade made a significant move by acquiring a 51% stake in La Positiva, a major insurance firm in Peru. This acquisition allowed Fidelidade to broaden its operations in Peru, Bolivia, Paraguay, and Nicaragua, expanding its presence in Latin America. Fidelidade currently leads in market share in Bolivia and ranks third in Peru.
Expanding into African Markets
Fidelidade has also diversified into Portuguese-speaking markets in Africa, particularly in Mozambique and Angola. This strategic expansion demonstrates Fidelidade’s growth opportunities and overshadowed Fosun’s effective globalization approach.
Noteworthy Performance and Ratings
By the first half of 2024, Fidelidade had operations in 13 countries spanning Europe, Africa, and Latin America, showing growth in various markets. The share of international business climbed to 30%, with gross written premiums from these markets reaching €885 million, a notable increase from just 6% in 2017. Furthermore, this segment contributed around €51 million in net profits, accounting for 40% of overall profits.
In September 2024, Fitch Ratings upgraded Fidelidade’s Insurer Financial Strength (IFS) rating from “A” to “A+” and its Long-Term Issuer Default Rating (IDR) from “A-” to “A”, signaling its highest rating in Portugal.
Digital Transformation Initiatives
Fosun has also leveraged digital transformation to boost efficiency and competitiveness in its Portuguese operations. Fidelidade launched the MyFidelidade app, allowing users to manage their insurance policies online. As of June 30, 2024, over 1.6 million users registered on the app, representing more than 15% of Portugal’s population, with sales through digital channels increasing by 16% year-on-year.
Luz Saúde created the MyLuz digital platform, enabling patients to manage medical records, payments, and appointments for in-person and virtual consultations. In 2023, almost 2 million telemedicine consultations occurred, with 41% involving severe cases.
Millennium BCP provided strong online and mobile banking services, resulting in a record net profit of €856 million in 2023, up over four times from the previous year, showcasing the benefits of digitalization on financial performance.
Commitment to Innovation and Responsibility
Upholding its dedication to “Self-improvement, Teamwork, Performance and Contribution to Society”, Fosun aligns well with Fidelidade’s commitment to the well-being of individuals and families through “business for good”.
Fosun Foundation launched the “Protechting Global Youth Innovation and Entrepreneurship Competition” in early 2016, partnering with Fidelidade and Luz Saúde. The name reflects the blend of “Protection” and “Technology”, aimed at supporting young entrepreneurs in the digital age and integrating the internet with sectors like health, insurance, and ESG.
In 2017, the Protechting Hub was founded in Macau, fostering innovation among youth in Hong Kong and Macau. Since then, it has yielded over 40 pilot projects and five commercial partnerships.
In May, top teams from Protechting 6.0 visited China to showcase their ideas, exemplifying the talent of Europe’s young innovators.
Furthermore, the annual Fidelidade Community Award distributes €750,000 each year to enhance social inclusion for individuals with disabilities, promote healthy living, and support elder care, leaving a growing impact on the Portuguese community.
Looking Ahead: A Vision for Sustainable Growth
Guo Guangchang, Chairman of Fosun International, expressed that Fosun’s globalization vision is more than a “two-way exchange” with China. The goal extends to nurturing ecosystem enterprises domestically and internationally, encouraging them to grow beyond local boundaries.
He highlighted that Fosun’s model of “global organization plus local operations” offers a unique advantage, with Portugal acting as a gateway to Europe and other Spanish- and Portuguese-speaking regions. The successful track record of Fidelidade exemplifies Fosun’s strategic approach.
Reflecting on ten years of investment in Portugal, Fosun has consistently collaborated with local firms, driving sustainable growth and long-term value for the community. Moving forward, the focus will be on developing enterprises where Fosun has established advantages, relying on innovation and globalization as key drivers for steady and profitable growth.
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