The Territory of the Chinese Buffett · 2015-11-02 · Learning the correct Buffett method: Learn...
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FOSUN TIMES 2015.10.31 06 Media An interview with Guo Guangchang, Chairman of Fosun Group was published as a cover story in the latest monthly issue of the Hong Kong Economic Journal. The story points out that Guo Guangchang’s thorough understanding of greed and fear is behind Fosun’s success and continuous growth during the ups and downs of Chinese economy over the past 20 years. A-Shares: Big Increase in the Secured Benchmark at 3,000 “A-shares cannot stay at 5,000, everyone can see that there’s a bubble, if it didn’t fall then it would have been dangerous. Now, at 3,000, there’s a big increase in the safety factor, and the price of blue chips are in the value investment range. Some A-shares are even cheaper than H-shares.” Guo Guangchang, who has always believes in value investing, stressed that once medical, finance, electricity, and infrastructure blue chips have fallen by a certain amount, they will be worthy of further investment. Learning the correct Buffett method: Learn its spirit, not its form Fosun has been described as the Chinese Berkshire Hathaway. As a response, Guo Guangchang stated that he has always been learning from the world’s best investors, even from entrepreneurs born in the 90s. Hong Kong Economic Journal: The Loneliness and Courage of Investors How is the investment into the holding company of BHF-Bank, BHF Kleinwort Benson, whose largest shareholder is Fosun with 29 percent, going to pay out? Via increased risk appetite of the bank? First of all: We do not want the BHF-Bank to act aggressively. We want to expand the business with increased fee income and not via an expansion of the balance sheet or higher risk taking. From where are the additional revenues to originate? I think that the BHF-Bank can not only profit from Chinese millionaires and billionaires, but primarily from the Chinese middle class. We currently have more than 15 million middle class families in China, who are willing to invest money overseas. Given its strong connection with the German “Mittelstand”, BHF is also well positioned to facilitate cross boarder M&A and capital market transactions between German and Chinese companies. And those are supposed to entrust their money to BHF-Bank? Billionaires have their own private wealth consultants anyway. They have a large pool to choose from. The middle class, however, does not have that much option. They do not know who the better consultant is. Many Chinese middle class families trust Fosun. That is because they know that Fosun is conducting their investments with a high degree of professionalism. And when Fosun proposes a brand to them, this is very helpful. What does this specifically mean for the BHF-Bank? The BHF-Bank can provide much more products for Chinese customers. And with our help, the bank can also find a larger number of products in China for their clients, as highly profitable RMB assets for instance. Also there is potential for M&A advisory mandates for German and Chinese companies. In an interview with Reuters, Liang Xinjun gave the following introduction to Fosun’s future investment directions. “In Germany, we’d like to look for opportunities that can benefit from China’s growth momentum,” he noted. According to Liang, Fosun is keen to find targets in the food & beverages and tourism sectors and is also looking to healthcare investments such as hospital chains, medical equipment, health insurance or health environment companies, in both Germany and the rest of Europe. However, Europe is not the only destination for Fosun, which has invested more than USD5 billion in the United States and USD500 million in Japan. “We’ve invested in South Asia and could also pursue opportunities in South Korea and the Middle East,” Liang stated. “We Can Help the BHF-Bank” The CEO of Fosun introduced about the strategy of the Chinese investment company within the German private banking sector as well as the firm’s international strategy Fosun on the Prowl for European Takeovers Jonathan Gould & Andreas Kroner Börsen-Zeitung On October 13, the Central People’s Broadcasting Station broadcasted an interview with Guo Guangchang, the President of Fosun Group, in its specially planned program “President Xi’s Visit to the USA.” In the program, Guo Guangchang spoke in details about his experiences and feelings in accompanying President Xi in the United States, and shared with audiences about his exciting discussions with his teacher, renowned investor Warren Buffett at the Sino-American CEO Roundtable. President Xi’s exchanges in the United States were “very down to earth.” Guo Guangchang: What impressed me most was that President Xi had a very deep understanding of the concerns of American entrepreneurs and American politicians with regards to China’s economy, including a deep understanding of the worries of the American people in relation to China. On one hand, he showed the vitality of the Chinese economy and China’s economic strengths in order to give the American business community, American politicians, and the American people confidence. On the other hand, he had good answers to their concerns. For instance, with respect to the protection of intellectual property rights, he noted that we would not challenge international norms established under the leadership of the United States after World War II. By saying so, he did not only express an analysis and expectation with respect to the current state of the world economy, but also expressed a respect for the status quo and its continuation. I feel that he was very down to earth and very understanding of the concerns of the Americans, which served to facilitate good communication. I believe that this will significantly deepen our mutual understanding. I also believe that the American people’s understanding of Chinese people will thereby be boosted. Fosun’s global implementation of corporate social responsibility:Using culture and the arts to promote exchange between China and the United States Guo Guangchang: I believe that all companies have to be responsible citizens, whether it is the US or any other country in which they want to develop their businesses. We have invested nearly USD 5 billion in the United States. Exchange between countries is not only the task of politicians, nor is it only the task of entrepreneurs. I believe that exchanges between regular citizens are the most important, and also the most lasting. This is why I believe that through culture and the arts we can achieve integration between the residents of both nations. We have also supported oriental exhibitions at the Metropolitan Museum of Art and art exhibitions at the Lincoln Center. Dialogue with Buffett: Be a lone investor. Manage risk and seek opportunities. Guo Guangchang: We worry more than anyone else, it’s like we’re always on thin ice. Investing and doing business is really just risk management. The reason that we can do all of this, including expanding globally, and getting deal approval in Portugal, is that our roots are in China. The Chinese economy is growing: In the past few years, China’s growth contributed to 50% of the growth in global GDP, while currently it still contributes 30%. The Territory of the Chinese Buffett Continued on Page 7 Continued on Page 7
Transcript of The Territory of the Chinese Buffett · 2015-11-02 · Learning the correct Buffett method: Learn...
FOSUN TIMES 2015.10.3106 Media
An interview with Guo Guangchang, Chairman of Fosun Group was published as a cover story in the latest monthly issue of the Hong Kong Economic Journal. The story points out that Guo Guangchang’s thorough understanding of greed and fear is behind Fosun’s success and continuous growth during the ups and downs of Chinese economy over the past 20 years.
A-Shares: Big Increase in the Secured Benchmark at 3,000
“A-shares cannot stay at 5,000, everyone can see that there’s a bubble, if it didn’t fall then it would have been dangerous. Now, at 3,000, there’s a big increase in the safety factor, and the price of blue chips are in the value investment range. Some A-shares are even cheaper than H-shares.” Guo Guangchang, who has always believes in value investing, stressed that once medical, finance, electricity, and infrastructure blue chips have fallen by a certain amount, they will be worthy of further investment.
Learning the correct Buffett method: Learn its spirit, not its form
Fosun has been described as the Chinese Berkshire Hathaway. As a response, Guo Guangchang stated that he has always been learning from the world’s best investors, even from entrepreneurs born in the 90s.
Hong Kong Economic Journal:
The Loneliness and Courage of Investors
How is the investment into the holding company of BHF-Bank, BHF Kleinwort Benson, whose largest shareholder is Fosun with 29 percent, going to pay out? Via increased risk appetite of the bank?
First of all: We do not want the BHF-Bank to act aggressively. We want to expand the business with increased fee income and not via an expansion of the balance sheet or higher risk taking.
From where are the additional revenues to originate?I think that the BHF-Bank can not only profit from Chinese millionaires and billionaires, but
primarily from the Chinese middle class. We currently have more than 15 million middle class families in China, who are willing to invest money overseas. Given its strong connection with the German “Mittelstand”, BHF is also well positioned to facilitate cross boarder M&A and capital market transactions between German and Chinese companies.
And those are supposed to entrust their money to BHF-Bank?Billionaires have their own private wealth consultants anyway. They have a large pool to
choose from. The middle class, however, does not have that much option. They do not know who the better consultant is. Many Chinese middle class families trust Fosun. That is because they know that Fosun is conducting their investments with a high degree of professionalism. And when Fosun proposes a brand to them, this is very helpful.
What does this specifically mean for the BHF-Bank?The BHF-Bank can provide much more products for Chinese customers. And with our help,
the bank can also find a larger number of products in China for their clients, as highly profitable RMB assets for instance. Also there is potential for M&A advisory mandates for German and Chinese companies.
In an interview with Reuters, Liang Xinjun gave the following introduction to Fosun’s future investment directions.
“In Germany, we’d like to look for opportunities that can benefit from China’s growth momentum,” he noted.
According to Liang, Fosun is keen to find targets in the food & beverages and tourism sectors and is also looking to healthcare investments such as hospital chains, medical equipment, health insurance or health environment companies, in both Germany and the rest of Europe.
However, Europe is not the only destination for Fosun, which has invested more than USD5 billion in the United States and USD500 million in Japan.
“We’ve invested in South Asia and could also pursue opportunities in South Korea and the Middle East,” Liang stated.
“We Can Help the BHF-Bank”The CEO of Fosun introduced about the strategy of the Chinese investment
company within the German private banking sector as well as the firm’s international strategy
Fosun on the Prowl for European TakeoversJonathan Gould & Andreas Kroner
Börsen-Zeitung
On October 13, the Central People’s Broadcasting Station broadcasted an interview with Guo Guangchang, the President of Fosun Group, in its specially planned program “President Xi’s Visit to the USA.” In the program, Guo Guangchang spoke in details about his experiences and feelings in accompanying President Xi in the United States, and shared with audiences about his exciting discussions with his teacher, renowned investor Warren Buffett at the Sino-American CEO Roundtable.
President Xi’s exchanges in the United States were “very down to earth.”
Guo Guangchang: What impressed me most was that President Xi had a very deep understanding of the concerns of American entrepreneurs and American politicians with regards to China’s economy, including a deep understanding of the worries of the American people in relation to China. On one hand, he showed the vitality of the Chinese economy and China’s economic strengths in order to give the American business community, American politicians, and the American people confidence. On the other hand, he had good answers to their concerns. For instance, with respect to the protection of intellectual property rights, he noted that we would not challenge international norms established under the leadership of the United States after World War II. By saying so, he did not only express an analysis and expectation with respect to the current state of the world economy, but also expressed a respect for the status quo and its continuation. I feel that he was very down to earth and very understanding of the concerns of the Americans, which
served to facilitate good communication. I believe that this will significantly deepen our mutual understanding. I also believe that the American people’s understanding of Chinese people will thereby be boosted.
Fosun’s g lobal implementat ion of corporate social responsibility:Using culture and the arts to promote exchange between China and the United States
Guo Guangchang: I believe that all companies have to be responsible citizens, whether it is the US or any other country in which they want to develop their businesses. We have invested nearly USD 5 billion in the United States. Exchange between countries is not only the task of politicians, nor is it only the task of entrepreneurs. I believe that exchanges between regular citizens are the most important, and also the most lasting. This is why I believe that through culture and the arts we can achieve integration between the residents of both nations. We have also supported oriental exhibitions at the Metropolitan Museum of Art and art exhibitions at the Lincoln Center.
Dialogue with Buffett:Be a lone investor. Manage risk and seek opportunities.
Guo Guangchang: We worry more than anyone else, it’s like we’re always on thin ice. Investing and doing business is really just risk management. The reason that we can do all of this, including expanding globally, and getting deal approval in Portugal, is that our roots are in China. The Chinese economy is growing: In the past few years, China’s growth contributed to 50% of the growth in global GDP, while currently it still contributes 30%.
The Territory of the Chinese Buffett
Continued on Page 7
Continued on Page 7
