February 20, 2008 Moody’s changes Fosun’s outlook to stable; assigns (P)B1 bond rating Ltd Moody's Investors Service has changed to stable from negative the outlook for Fosun International Limited’s Ba3 corporate family rating and B1 senior unsecured bond ratings. Moody's has also affirmed the company's Ba3 corporate family rating and the B1 rating on its existing senior unsecured bond due May 2016. At the same time, Moody’s has assigned a provisional (P)B1 rating to its proposed 5-year US dollar bonds. RATINGS RATIONALE "The outlook change reflects Moody's expectation that Fosun’s financial profile will stabilize in the next 12 months, given 1) that its core cyclical steel and iron ore business has bottomed, and 2) the company’s liquidity has improved,” says Alan Gao, a Moody's Vice President and Senior Analyst. Moody’s expects Fosun’s consolidated adjusted EBITDA in 2012 to be slightly weaker than that of 2011, but will stabilize in the next 12 months, supported by a moderate improvement in its steel and iron ore business. At the same time, its pharmaceuticals business will remain strong, while its property operation will benefit from the stable property market and improved contract sales. “Fosun’s liquidity has also improved owing to the sale of a large investment, the repayment of a shareholder loan by Forte Land, and the RMB3.8 billion in cash raised through Shanghai Fosun Pharmaceutical Holdings Co Ltd’s H-Share placement,” says Gao. “Moody’s also expects Fosun to receive an additional US$210 million in cash if an upcoming shareholders’ meeting approves the sale of Focus Media Holdings Limited. Such a level of cash would further strengthen its liquidity,” adds Gao. Fosun’s liquidity is also supported by ample credit facilities from major banks. As of November 2012, the consolidated company enjoyed total uncommitted banking facilities of RMB102 billion, of which 60% were unutilized. Moody’s views Fosun’s growing asset management business as credit positive because it provides an increasingly large and stable funding source for the company’s private equity investment and property businesses. Both of these businesses offer high potential returns but also exhibit high risk profiles. As of December, 2012, Fosun managed 19 funds with toal assets under management (AUM) of RMB16.6 billion, up 50% from RMB11.0 billion as of December 2011. Around 79% of the AUM were allocated into private equity investments, and the remaining 21% were property investments. MOODY'S INVESTORS SERVICE 2 On the other hand, Fosun’s credit ratings are constrained by the high volatility in its investment income and the potential imbalance between internally generated cash and management’s strong appetite for investments. Moody’s expects Fosun to realize RMB1.0-1.5 billion in investment gains in 2012, largely in line with that of 2011. For 2011, realized investment gains were equivalent to 25%-35% of the company’s funds from operations for the past two years, thus exerting a large impact on its cash flow. However, its investment gains have been volatile historically and are hard to predict. Fosun’s recurrent cash flow at the holding company level, most of which is dividend income, has been low at around RMB1.2 billion annually in the past 2 years. Such annual dividend income covers about 1.2x-1.5x of its interest expenses at the parental level, but is insufficient to support the company’s active new investment activities. As a result, it strongly relies on capital recycling to support growth. Despite its successful investment track record, its large investment portfolio exhibits single-position concentration risk, and is susceptible to adverse market conditions. Moody’s expects Fosun’s key credit metrics of adjusted debt/cap, adjusted Debt/EBITDA, and FFO/net debt to stay at around 50%-55%, 6.0x -6.5x, and 8%-10% respectively, in line with its current rating level. Upgrade pressure will emerge if the company: 1) increases recurring cash flow or curtails its investment needs so that it can achieve a balance between its internally generated cash flow and investment needs; and/or (2) arranges more long-term capital to match its investments. The financial metrics Moody's would look for include: adjust debt/capital under 50%, adjusted debt/EBITDA below 5.0x-6.0x, and/or FFO/net debt above 8%-10% on a consistent basis. Fosun's ratings could be downgraded if: (1) its underlying business profile changes materially, e.g. it loses control of its core businesses, such that its business risk rises; (2) its core businesses encounter downturns more severe than Moody's expectations; or (3) its liquidity position significantly deteriorates due to an inability to roll over short-term debt and a depletion of its cash balances. The following credit metrics would indicate a potential downgrade: adjusted debt/capital above 55%, adjusted debt/EBITDA above 6.0x, and/or FFO/net debt below 8%-10%. Fosun’s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Fosun’s core industry and believes Fosun’s ratings are comparable to those of other issuers with similar credit risk. MOODY'S INVESTORS SERVICE 3 Fosun International Ltd is the holding company for businesses including steel, property, pharmaceuticals and healthcare, mining, retail, services, insurance, finance and other investments, and asset management in China and overseas. Headquartered in Shanghai, it listed on the Hong Kong Stock Exchange in 2007. The group is 58%-owned by Mr. Guangchang Guo indirectly, the Chairman. He and three other founders indirectly own 79.08% of the company. 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MOODY'S INVESTORS SERVICE 4 Please see the ratings disclosure page on www.moodys.com for information on (A) MCO’s major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody’s Corporation; however, Moody’s has not independently verified this matter. Please see Moody’s Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery. Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody’s ratings were fully digitized and accurate data may not be available. Consequently, Moody’s provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating. Alan Gao Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) 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