FAST NEWS: South Korea’s Meritz Buys Into Fosun Tourism

The latest: South Korean financial company Meritz Financial Group disclosed it purchased 81.54 million shares of resort operator Fosun Tourism Group (1992.HK) on Oct. 20, equal to 6.57% of the company’s total share count, according to a new Hong Kong Stock Exchange filing.

Looking up: Meritz and Fosun Tourism parent Fosun International (0656.HK) have previously worked together, with Fosun’s Lanvin Group of luxury brands announcing last Monday that it received a $50 million commitment from Meritz through a private equity investment. The pair of investments likely reflect Meritz’s confidence in Fosun’s businesses.

Take Note: The document does not disclose further details of the latest transaction, including whether Meritz purchased its shares directly from Fosun International, which previously said it would sell down some of its stake in Fosun Tourism. Before the Meritz purchase, Fosun International announced last month that it had transferred 28 million shares in Forsun Tourism to an independent third party at a price of HK$8.57 per share.

Digging Deeper: Global tourism took a big hit after the start of the Covid-19 pandemic in early 2020, with Fosun Travel, which operates the Club Med resort chain, recording a huge loss of over 5.2 billion yuan (717 million) in the past two years. Despite the challenges of new Covid strains, the company’s international travel business showed signs of recovery this year as countries gradually reopened their borders. Turnover for its resorts, tourism destination operations and travel and leisure services surged 110.4% year-on-year to 11.25 billion yuan ($1.55 billion) in the first three quarters of this year. Within that, turnover for Club Med jumped 145.7% to 9.14 billion yuan, and has now recovered to approximately 96% of its pre-pandemic level in the same period of 2019.

Market Reaction: After plunging 8.5% on Monday in a broader market sell-off, Fosun Tourism shares rebounded slightly on Tuesday morning to close up 2.1% to HK$6.38 at the midday break. The stock currently trades near the lower end of its 52-week range.

Translation by Jony Ho

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