To be a Chinese expert with global capabilities

The 21st century Economic report Zhou Shanghai reported "the world's leading investment holding group focused on China's growth momentum."　　"Fosun Group CEO Liang Xinjun so defined the current managed assets of more than 100 billion Yuan Fosun group." 2010, Fosun shares the French Mediterranean Club Med, a high-end holiday tourism chain. In this case, "we have taken a route that is so far different from other Chinese companies."　　Liang Xinjun said that the pattern of Fosun will be replicated again and again. Liang Xinjun that China is about to become the world's largest consumer market and capital market.　　The Fosun Group, which focuses on China's growth momentum, will "take Buffett as an example" and learn about its value investment philosophy and financing model.　　Inflection Point and opportunity "21st Century": Macroeconomic trends will affect investor decision-making, Fosun's macro-economic judgment for the next few years?　　Liang Xinjun: The most important inflection point of China's economy, there are three macroscopic aspects. First, China quickly turned from a manufacturing powerhouse to a consumer power, and soon became the world's second-largest consumer in 2013.　　In the future, it is difficult for Western companies to claim to be global if they do not occupy a place in China. Second, China is turning from a manufacturing powerhouse to a capital powerhouse. Both the capital supply capacity, the supply capacity of the capital Market Enterprises (project), and the net export, the first two indicators were 2009 years and 2010.　　In another 3-5 years, we will be in the top two of the global position. Third, the renminbi's long-term "internal devaluation of the external rise" trend. The rise is "appreciated", and the easing of monetary policy in Europe and America will lead to appreciation of the renminbi overseas.　　And the devaluation of the renminbi in the territory has gradually emerged. In the past, Chinese companies are always thinking of joint ventures with foreigners to introduce brands. Now the Chinese market is big, is the mainstream market of foreigners, he will be for the Chinese market to reduce his physique. Chinese companies are likely to have a Chinese premium when they negotiate overseas.　　I am optimistic about China from these three inflection points.　　21st Century: According to your judgment, China's economy is at an optimistic inflection point, what investment opportunities will Fosun find? Liang Xinjun: Since China has become one of the world's largest consumer markets, Chinese companies must first plough their own markets.　　In the coming decade, we will witness the emergence of a group of companies with market capitalisation in the world, but only in China. China is a big consumer and a big capital, so invest in strong companies that can benefit from China's local consumer market.　　Those with the Chinese consumption, especially the upgrading of consumption-related industries, you dare to vote.　　In addition, China is a global manufacturing power, so 3-5 years of manufacturing services for the supporting industry is still scarce, in the long run, such as resources and energy enterprises, are good (investment direction).　　In addition, I feel that overseas listed Chinese assets are undervalued, such as Fosun investment in the audience, Tongji Hall and so on.So investment is based on a sharp rise in China's consumer and capital markets.　　International Journey "21st Century": Fosun's current keyword is "internationalization", this strategy is how to implement the specific? Liang Xinjun: On the question of internationalization, we are very early in the internationalization of capital sources.　　In fact, the first step is in Hong Kong to raise funds in the form of red chips, the earliest from the Forte Group (20337.HK) began, to later have a number of listed companies in Hong Kong. The second step was to go 2009, inviting former US Treasury secretary Snow as our international advisor. Through his exposure to AIA's project, Fosun was also one of AIA's gossip "boyfriends".　　Although the project was not finished, we are still working on a similar project. The third step is 2010 April, we have a joint venture with Carlyle Investment Group. Fosun has been able to look at companies with major assets in these regions by working with Carlyle, a company with strong investment capabilities in the US, Japan and Europe. The fourth step is to invest in club Med. This project we explored a model of how to go with industry-leading European and American enterprises joint ventures, we have gone to so far as other companies are not the same route. The political drag on state-owned companies to acquire foreign takeovers, but we do not engage Chinese companies to acquire foreigners, we just share stakes and help them develop within China. For us, the amount of money invested abroad is small, the risk we take is small, and there is no cross-cultural management problem.　　This pattern will be replicated again and again. The fifth issue we consider for internationalization is that we have not done anything to try out a private equity fund (PE) overseas.　　But I believe that there are more and more overseas funds to understand and understand the Chinese story, this is the next step we have to cross. Buffett, PE debate "21st Century": when it comes to Fosun, we often say that Buffett is the model.　　But Buffett's money, from its own funds and insurance float, the cost is very low, Fosun can do it?　　Liang Xinjun: When it comes to financing, Buffett's advantage is obvious, most often speaking of his value investment, in fact, he (for investment) the cost of capital is very low. Investment companies, like production companies, are certainly competitive if your raw materials are consistently and cheaply obtained. Investment company's raw materials on two things, first, the project, how do you prove to investors that you can get the project cheaply and sustainable? Second, money, China and overseas have a lot of good PE management companies, they give investors a considerable return. Like the domestic nearly 35 years, PE to investors in the expected return of more than 25%.　　But from another point of view, PE capital cost is not cheap, he cast out the money expected return is 25%, that psychological pressure how much? For Fosun, the first step to consider is to study Buffett, first to learn how to sustainably reduce our investment costsand secondly, consider how to sustainably reduce the cost of the projects we invest in. 21st Century: Where does the difference between Fosun and PE manifest?　　What is the difference with Buffett? Liang Xinjun: The ordinary PE investment cycle is 5 years, 7 years, 9 years, but we are not the same, good high-growth industries, I would like to continue to retain, so we call it "has a stable and strong industrial base."　　It's like Buffett, the logic of holding Coca-Cola for a long time is the same. Fosun's current investment capital is mostly owned by its own capital. Our investment direction is three kinds. The first category is PE investment;　　The third category, industrial investment. Industrial investment is a holding and an investment for the purpose of industry integration.　　I want to take up the high value-added chain in this industry, this is my integration logic.　　PE investment is another extreme, is ready to hold 35 to go. There is also a gray area, strategic investment. In some industries, you know that the future may be good, such as insurance. But if you have not done so, take out billions of holdings, the risk is enormous. So the best way is to a good industry, with the form of equity participation with the most efficient company to play a few years, follow his study, have the opportunity to hold.　　We have a learning process for many industries, in medicine, retailing and mining. If Mr. Buffett is carefully analyzed, he compares with other PE companies, the most typical of which is the low cost of long-term funds. Internal accounting equivalent to about 6% of the cost, and PE and so on in 27%, 28%.　　The difference is particularly large. The difference between Fosun and Buffett is that we focus on China and do it in areas that benefit from China's growth.　　Compared with the domestic industry investment companies, our future investment vision is global.　　Change positioning "21st century": in the investment of new projects at the same time, we are also in the withdrawal and the transformation of some projects, we choose what standards, what kind of time to withdraw? Liang Xinjun: There are two standards. First, safety standards.　　Second, the standard of growth. Security standards, especially since the financial crisis in recent years, we pay special attention to the balance of investment and integration. When you decide to invest a sum of money, you have to think of selling something, not "short loan", which is very dangerous. Our basic approach is, for example, I invest 1 billion, maybe I sell assets to sell 700 million.　　This is actually a balance of asset allocation, selling some of the low value-added potential to buy high-value-added projects. As for growth standards, what kind of business will be sold? One, we are sure that under our management, [project] no longer has the scale of growth, if there is no double-digit growth, the momentum of his own growth has dried up. Second, there is no better opportunity to weigh, if not, or hold the original things better.　　Third, reasonable prices are unreasonable, but also very important. "21st century": so Fosun in the overall positioning of the group, is not there is aNew changes?　　Previously defined as the largest comprehensive private enterprises, what is the positioning now? Liang Xinjun: We used to call it "the biggest multi-industry company" and now we're talking about "the world's leading investment holding group that focuses on China's growth momentum". The first is the leading investment company, and secondly, we can benefit from China's growth, in addition, we have a strong industrial base in China. Some industries we hold for a long time, the "Chinese experts + global Capabilities" we speak of coincide.