Fosun's ClubMed spinoff looks a hard sell
RPT-BREAKINGVIEWS-Fosun's ClubMed spinoff looks a hard sell The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Ka Sing Chan
HONG KONG, Sept 4 (Reuters Breakingviews) - Fosun International 0656.HK will have to work hard for its ClubMed spinoff. Just a year after taking its tourism unit that included the resort chain private, it is now relisting ClubMed as a standalone business. That's sensible. But bagging a similar valuation as faster-growing, more profitable rivals will be tough.
The biotech-to-financial-services conglomerate bought ClubMed over a decade ago and folded the business into its broader Fosun Tourism Group, spanning hotels and vacation properties. But FTG's 2018 Hong Kong stock market debut was followed by the Covid-19 pandemic and China's property crash. Last year, Fosun bought out the rest of FTG at a $1.2 billion valuation — roughly half of what it was worth at its IPO.
ClubMed is now returning to public markets in an IPO that could raise more than $500 million, according to Reuters. The business operates 69 resorts across 40 countries and regions. Its model of leasing most of its properties means it is also relatively asset light.
That should help ClubMed market itself as a global hospitality brand. The company reported €57 million ($67 million) of net profit in the first half of the year. Annualise that, and put it on the average 23.5 times price-to-earnings multiple peers including Marriott International MAR.O and Hilton Worldwide HLT.N trade on, per Visible Alpha, and ClubMed's market value could be worth $3 billion.
Yet that will be a tough sell. Revenue, of which over half comes from Europe, Middle East and Africa, increased just 1.3% in 2025 and stagnated in the first half. Operating income has been in decline, falling to €160 million last year, down from €181 million in 2023. Higher operating expenses are to blame, as the company upgraded its hotels to include premium all-inclusive services like activities, transportation, childcare and more. That strategy is less profitable as well: ClubMed's 20% EBITDA margin last year was well below the 30% at Hilton.
Focusing on outbound travellers from the People's Republic makes sense, given ClubMed's parent. But that will be tricky: overseas spending from Chinese tourists grew just 1.4% last year to $254 billion, despite a 15% rise in overseas trips, per government data. ClubMed will have to convince both holiday-makers and investors that it's worth the price.
CONTEXT NEWS
Fosun International plans to spin off the operator of its ClubMed resort brand for a Hong Kong initial public offering, the Chinese conglomerate said in a stock exchange filing on August 28. The listing vehicle, ClubMed Lifestyle Group, plans to expand its global resort network to about 85 locations by 2030 from 69 now.
Fosun is planning to list ClubMed in Hong Kong in a deal that could raise more than $500 million, Reuters reported on May 19, citing a source with knowledge of the matter.
(Editing by Robyn Mak; Production by Ujjaini Dutta)
((For previous columns by the author, Reuters customers can click on CHAN/ KaSing.Chan@thomsonreuters.com))