Fosun Tourism slumps over 17% on reported sales by Fosun International at 15% discount

 

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Fosun Tourism is slumping 17.6% to HK$8.31 in Hong Kong, as of 11:04 local time, after the parent company reportedly cut shareholdings in heavy discount.

Fosun International placed 28 million Fosun Tourism shares through block trade at $8.57 each, representing a discount of about 15% to the closing price on Monday, reported Bloomberg News citing trading papers.

As part of a plan to raise more than 10 billion yuan ($1.4 billion), the debt-strapped Fosun International has been selling stakes in listed companies since the start of the year. It said in a statement earlier September it plans to cut its stakes in Fosun Pharmaceutical and Jinhui Liquor.

Shanghai Fosun High Technology Group, an affiliate of Fosun International, plans to sell more than 80 million shares of Fosun Pharma, or 3% of the total share capital, through centralized bidding and block trading, marking the first time Fosun International has cut its interest in Fosun Pharma since the drugmaker was listed in Shanghai in 1998. Fosun Pharma’s shares tumbled by the daily limit of 10% on Monday, while its Hong Kong stocks ended down 13%.

Goldman Sachs lowered Fosun Tourism’s target price to HK$14.6 from Hk$15.5, reiterating a Buy rating. The bank said the company’s interim results matches expectation and the core EBITDA reaching 1.1 billion yuan. In particular, Club Med’s EBITDA for the first half reached 1.2 billion yuan and its first-half business has recovered to 90% of 2019-level, the bank said.