Guo Guangchang's Fosun International announced a 28% profit rise and told the Hong Kong stock exchange: "We have been working conscientiously and earnestly every day as if we were skating on thin ice and standing on the brink of an abyss." Photo: Reuters

Warren Buffett never had it so tough. Guo Guangchang, self-styled disciple of the Oracle of Omaha, just announced a 28% jump in net profit to 10.3 billion yuan (US$1.5 billion) for the giant financial services-to-healthcare-to-entertainment and leisure conglomerate he helped found 25 years ago.

In his annual letter to shareholders, the 50-year-old Guo laid out his achievements in creating one of China’s most innovative and aggressive global champions. After a multibillion-dollar splurge on overseas assets including Club Med, Cirque du Soleil, Wolverhampton Wanderers FC and large swathes of distressed US and European insurance assets, Fosun last year saw hefty revenue gains across its core businesses: 37% in “wealth” — including a threefold gain in “wealth management and innovative financing”; 17% in “health”; and 39% in “happiness” — its Club Med and other leisure and entertainment units.

Indeed, the group’s seemingly unstoppable ascent had put it alongside the likes of Wang Jianlin’s Dalian Wanda, Jack Ma’s Alibaba and Wu Xiaohui’s Anbang Insurance as one of Beijing’s anointed global champions in its historic quest to reclaim China’s place at the apex of world cultural and economic power.

Shame, then, that the anniversary party band hit a bum note with the surprise exit of CEO Liang Xinjun and senior vice-president Ding Guoqi: the former resigning — according to the Hong Kong regulatory filing — for health reasons; the latter to spend more time with his family. And this after Guo’s surprise four-day disappearance in late 2015, when he was “assisting Chinese authorities with their enquiries.”

Opaque and uncertain regulations have long plagued the bosses of China’s big companies — as have the temptations to line their own pockets or those of their political benefactors. However, the pitfalls have outweighed potential profits since Xi Jinping became president in 2013 and began the most sweeping consolidation of power in years. Mining tycoon Liu Han was executed in early 2015; Dalian Shide’s billionaire boss Xu Ming died in jail in December 2015. Both men were linked to political rivals of Xi.

Unusually in China, Guo reemerged from his mysterious 2015 work break and continued charting his group’s global campaign to dominate its vision of a future in which businesses must continually innovate and invest in cutting edge technologies: artificial intelligence, automation, gene sequencing, fintech and digital platforms.

“Any company that only relies on one channel or a third-party channel to reach customers, or only buys access to online traffic … will be constrained by lack of control over its own business and is doomed to fail,” Guo wrote in his letter to shareholders. “We propose that Fosun Pharma should be in the same position within the global healthcare industry just like how Huawei is positioned within the telecommunications equipment and service industry.”

Still, the risks overshadowing a Chinese tycoon’s life are highlighted in the letter: “We have been working conscientiously and earnestly everyday as if we were skating on thin ice and standing on the brink of an abyss,” Guo wrote.

That’s despite having danced to the tune played by Communist Party leaders. Like Wanda and Alibaba, Fosun has expanded overseas as part of China’s exertion of soft power: it invested in iconic western brands such as Italian yachtmaker Feretti; cultural industries such as soccer and TV and film production unit Studio 8; distressed financial services companies such as Portugal’s biggest bank Millennium PCB; and health products groups such as Israel’s AHAVA and India’s Gland.

Though it’s too early to say for sure whether Fosun’s untouchable aura has been scratched, there are some indications that the fortunes of at least some of China’s overseas champions may be waning. Fosun rival Anbang Insurance is at the center of a political storm over its links to US President Donald Trump’s son-in-law Jared Kushner, while a number of Chinese deals — including some by the King of Teflon, Dalian Wanda’s Wang Jianlin — have collapsed or are in trouble.

Neither Fosun’s announcement nor the letter to shareholders gave a detailed explanation why there was a major shakeup of management on the same day the group announced earnings. Still, perhaps there’s a plausible explanation in Guo’s summary of his overall style of management:

“I think ‘0.01’ best serves as the standard of being an elite. In other words, we need to find those who are 0.01 second faster than the fastest. We hope to find those who are 0.01 percent stronger than others … Fosun cannot tolerate mediocre people. It will weed out those who only have impressive résumés but makes [sic] no achievements at work, those who have experience but cannot innovate, and those who fail to learn and grow continuously.”

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