Guo Guangchang's Sacrifice and Gains

Ask AI · How Will Economic Changes Push Guo Guangchang to Redefine Fosun’s Strategy?

“There’s a saying: cut, let go, detach. This is the normal state of life… Maintaining a clear, calm mind and appreciating the wisdom of ‘letting go’—I believe this is the right mindset for us, and it’s a lifelong practice.”

On March 17th, at the Yabuli China Entrepreneurs Forum dinner, Guo Guangchang, who is toasting with the spirit of “letting go,” talked about “detachment and release,” and about life being the wisdom of “letting go.”

This is his genuine feeling and true experience. Over the past few years, he and Fosun International have been practicing this balance of “letting go” and “gaining.”

Before 2020, Guo Guangchang and Fosun mainly focused on “gaining.” The company achieved listings in China and Hong Kong, gained capital, and used capital to drive industries such as pharmaceuticals, steel, mining, real estate, insurance, culture and tourism, and consumer sectors—becoming one of China’s largest diversified private enterprises. He was also regarded as a representative of the 92-generation entrepreneurs…

During the era of loose credit, low interest rates, and abundant opportunities for high growth, “gaining” was also a gift of the times.

But starting in 2020, the environment changed dramatically, not only with economic cycles shifting but also with fundamental logical upheavals. China’s economic transformation and upgrading entered a pain period unprecedented in decades, and even the most successful companies often experienced the most intense pain.

Under the transformation of new and old kinetic energy, how to “let go” of the old and “gain” the new has become the main theme of the era. Fosun, with its large scale and broad footprint, faces greater challenges and tests in balancing “letting go” and “gaining.”

A prominent Chinese business magnate who nearly fell during the Asian financial crisis once lamented to me that the most important ability for entrepreneurs to build lasting enterprises is to find opportunities in crises, even turning crises into opportunities. He considered himself both painfully and luckily fortunate to have encountered that storm.

“Although the process was painful, with hands and feet cut off, it prompted us to deeply reflect on reality—such as focusing investments on small-scale but high-risk areas, and then pouring all our efforts into China, catching the biggest national opportunity in recent decades.”

Guo Guangchang’s “letting go” and “gaining” over the past few years are not as extreme, but they are similar in spirit. During the huge test he calls the “perfect storm,” Fosun, which was already adjusting its strategy, focusing on core sectors, and deepening industry engagement, turned the challenge into a catalyst for transformation, undertaking a series of major “lettings go” and “gains.”

In just a few years, Fosun has exited assets and businesses, raising about 75 billion yuan. In March this year, it announced a one-time impairment of over 20 billion yuan on real estate and non-core assets, thoroughly shedding past burdens. While the outside world often only sees its large “letting go,” Fosun is also achieving significant “gains” through this process. “Letting go” of the old Fosun, “gaining” a new Fosun. After years of “letting go,” Fosun:

On one hand, solidifies its foundation. For example, supporting its Portuguese insurance business, which contributes hundreds of millions of euros in net profit annually and holds the top market share in its home country, while expanding into international markets; making Club Med, a global leisure resort leader, more profitable through light-asset operations; and strengthening the resource endowment of HALO assets in Hainan, which are being revalued globally…

On the other hand, raising the ceiling higher. For example, investing over 5 billion yuan annually in R&D to make innovative drugs a growth driver. Currently, Fosun’s pharmaceutical companies have achieved up to $9 billion in cumulative BD deals with international firms like Pfizer, and possess a series of promising products with potential market value exceeding $30 billion, such as PD-L1 ADC HLX43, HLX22 (a new HER2 antibody), and HLX07 (an innovative anti-EGFR). Success of any of these drugs could generate profits surpassing those of the past decades.

Of course, the ability to “let go” and create a new Fosun also relies on prior foresight and development. A few days ago, I discussed Li Ka-shing’s “Always Have a Trump Card” in “Li Ka-shing Can Rival a Nation,” emphasizing that Li always keeps a trump card to ensure income even if the world collapses. Insurance and pharmaceuticals are Guo Guangchang’s trump cards—these are his “cards” that continue to generate profit even if everything else collapses. These gains come not only from recent “letting go” but also from decades of steadfastness and increased investment.

This is also the fundamental reason why Guo Guangchang can still chat happily with entrepreneurs over drinks, sharing his journey and insights.

Many things are dialectical, two sides of the same coin: yesterday’s “gains” may be the foundation for today’s “letting go,” and today’s “letting go” may become tomorrow’s “gain.”

Guo Guangchang often says he hopes everyone lives to 121 years old. His relative, Malaysia’s 103-year-old billionaire Guo He Nian, once told everyone that in modern society, 60 is just the beginning of youth.

Whether based on the hope of living to 121 or Guo He Nian’s view that 60 is still young, Guo Guangchang, at 60 years old this lunar year, is still in the prime of life. For Fosun, at 34, it is even more youthful.

In the years to come, Guo Guangchang may also thank this “youthful” period of “letting go.” In fact, there is a sense of destiny—before this major “letting go,” he bought “Letting Go” wine, as if foreshadowing his own big detachment and shedding.

There are no companies or lives that are smooth sailing. Even ordinary people like us, amid great upheavals, face the test of “letting go” and “gaining.”

Old tickets won’t board new ships; only those who can “let go” and “gain” can keep up with the times—whether the big players or us ordinary folks.