(Yicai) Aug. 23 -- Fosun Tourism Group is no longer interested in the traditional real-estate-plus-tourism approach and the owner of French holiday resort Club Med will instead focus on an asset-light strategy going forward, the co-president said after the company logged a 31.7 percent plunge in net profit in the first half year on year.

The value of Chinese real estate is fading and dividends from tourism need to return to tourism itself, Xu Bingbin said at the earnings call today. So Fosun Tourism will focus on asset-light expansion. Club Med has shifted to a leasing and management model, and it only owns 15 percent of the resorts in its portfolio, he added.

Fosun Tourism’s posted net profit of CNY322 million (USD45.1 million) in the six months ended June 30, according to the Shanghai-based firm’s latest earnings report released yesterday. Revenue climbed 5.8 percent to CNY9.4 billion (USD1.3 billion).

As an example of the new strategy, Fosun Tourism linked arms with the Taicang Municipal People's Government in June on the second phase of the Taicang Alps International Resort. The Taicang Municipal Government will invest CNY5 billion (USD700 million) while Fosun Tourism will operate and manage the resort.

“This deal reflects the shift of Fosun Tourism’s strategy to an ‘asset-light’ one from an ‘asset-heavy’ one,” Xu said. “We are no longer interested in the traditional real-estate-plus- tourism approach and for heavy assets, we will look to introduce strategic investors.”

Fosun Tourism’s share price [HKG: 1992] closed down 0.2 percent at HKD3.50 (USD0.45) today.

Editor: Kim Taylor