Home     >     Business     >    

Daiwa and Morgan Stanley Reaffirm “Buy” Rating on Fosun

Both Firms Believe Fosun’s Cash Position is Sufficient to Repay its Debts Obligations 

(23 September 2022) Recently, a number of investment banks have expressed their continuous optimistic views on Fosun International Limited (HKEX stock code: 00656, "Fosun International"). Following Morgan Stanley's third recognition of Fosun International's solid financing capability and reiteration of its "Overweight" rating on Fosun International, Daiwa Capital Markets also issued a research report yesterday, reaffirming its "Buy" rating and target price of HK$10.8 on Fosun International. The firm pointed out that Fosun International’s fundamentals, funds and liquidity position are stable.

In view of the recent market concerns on Fosun’s repayment ability, Daiwa Capital Markets conducted an analysis and estimated that with Fosun’s cash in hand and the cash raised from its recent asset sales, Fosun’s cash position is sufficient to repay short-term maturing debts. The firm estimated that the actual debt attributable to Fosun International stands at approximately RMB100 billion at the holding level; as of 30 June, the company’s cash, bank balances and term deposits amounted to RMB117.65 billion. The firm estimated that Fosun International has RMB14 billion cash in hand at the holding level, after stripping off cash from subsidiaries. In addition, Fosun's short-term maturing debt is composed of bonds and bank loans. The firm believes that most of Fosun’s short-term bank loans are extendable upon maturity, coupled with the cash raised from the recent asset sales, as well as the close cooperation between Fosun and banks, including the recent strategic cooperation with ICBC and HSBC, will help Fosun International lay a solid cash foundation.

Morgan Stanley Reiterated its “Overweight” Rating on Fosun International for the Third Time

Morgan Stanley issued a research report on 16 September, the report said that most of Fosun’s debt at the consolidated level reported in its recent interim results announcement consists of lending by Fosun’s operating subsidiaries. The firm estimated that the debt at the holding company, including onshore debt, offshore debt and bank loans, is much lower. In terms of cash, with a tightening credit market, it is understandable that the company needs to take quick action to convert liquid assets into cash. It is estimated that the cash generated from its recent asset sales, together with its cash on hand is getting closer to being able to repay its near-term debt obligations. Morgan Stanley has therefore reiterated its “Overweight” rating on Fosun International with a target price of HK$11.4.

Morgan Stanley has already issued a research report on 7 September, pointing out that although Fosun International has recently announced a few small divestments in its core subsidiaries, which raised concerns about the company’s near-term stability, Morgan Stanley has confidence in Fosun International’s financing capability and believes the company can raise enough cash to handle its debts and withstand the recent market pressure, the company is deleveraging further to rebuild confidence. In fact, following Morgan Stanley’s release of research report on Fosun International’s interim results on 31 August, Morgan Stanley pointed out Fosun’s financial position is solid, with ample and increased cash position. As at the end of the reporting period, the company’s cash, bank balances and term deposits increased by approximately RMB21.0 billion to RMB117.65 billion, covering 45% of its total consolidated debt position; the debt to capital ratio was 56.8%. It believes that the Group’s balance sheet still largely stable.
Information contained on this page is provided by an independent third-party content provider.This Site make no warranties or representations in connection therewith.If you are affiliated with this page and would like it removed it please contact service@ceapress.com
Recommend

GWM Launches Its First Locally Assembled Model in Pakistan

2022-11-29 00:00:00

Recently, GWM HAVAL H6 HEV has been officially launched in Lahore, Pakistan. HAVAL H6 HEV boasts the first locally assembled new energy hybrid model in Pakistan.

GWM Becomes Mobility and Logistics Partner of APEC 2022

2022-11-25 00:00:00

On November 19, the 29th APEC Economic Leaders' Meeting concluded officially in Bangkok, Thailand. As an important representative of China's automobile industry to going global, GWM became a mobility and logistics partner during APEC 2022, and its new energy model of HAVAL brand, the 3rd Gen HAVAL H6 DHT HEV, became the official designated vehicle for mobility and logistics services.

GWM Launches Three New Models in Guatemala

2022-11-25 00:00:00

Recently, GWM officially launched the GWM brand in Guatemala and announced its entry into the market. GWM's global models, such as the 3rd Gen HAVAL H6, HAVAL JOLION and GWM POER, were first launched in Guatemala.

Explore New Innovations with Dahua Full-color Camera

2022-11-22 23:45:00

Dahua Technology, a world-leading video-centric smart IoT solution and service provider, has been accelerating the innovation and exploration of Full-color Technology. Featuring TiOC, Panoramic, Zoom and 4K, the new generation of Dahua full-color series provides a wide range of low-light solutions that integrate different intelligent technologies to solve pain points in various scenarios, allowing installers and end users to choose the ideal solution that best suits their needs.

BYD Rolls Off Its 3 Millionth New Energy Vehicle and Debuts A New Passenger Car Brand Matrix

2022-11-16 23:18:00

BYD's acceleration on promoting New Energy Vehicles. From the first new energy vehicle to the 1 millionth new energy vehicle in 13 years and from 1 million to 2 million in just 1 year and from 2 million to 3 million in just 6 months, BYD is actively promoting NEVs. "To reassure our customers about safety, we have made it a mission that we will carry to the end". In addition to the Blade Battery and CTB technology, BYD will also launch another safe and novel pioneering technology which will be equipped for the first time on the new model of its high-end brand, the Yangwang brand. BYD Auto will build up its brand matrix with five brands. These five brands are Dynasty, Ocean, Denza, Yangwang, and a new brand that specializes in professional and personalized identities. BYD operates globally. As a global seeker of talent, BYD acquires its talents worldwide. In terms of operation, BYD has extended its new energy vehicle footprint to over 400 cities across 70 countries and regions on 6 continents. In particular, BYD's new energy passenger cars have entered Norway, Germany, Japan, Thailand, Brazil, and other markets in the world. In the future, BYD's new energy passenger cars will enter more markets and will be manufactured as well as sold globally.

Fluor Achieves Substantial Engineering Completion for Albemarle Lithium Conversion Project

2022-11-15 08:17:00

Fluor Corporation announced today that it has achieved substantial engineering completion for Albemarle’s Lithium Conversion project in China.