Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

As compatriot HNA Group Co. spends like there's no tomorrow, Fosun International Ltd., the first of China's big conglomerates to embark on an overseas buying spree, is selling assets and turning inward. That's a smart move.

Holding Back
Fosun's acquisitions of overseas assets have been slowing
Source: Bloomberg

The company, whose businesses range from insurance to tourism, reported a 28 percent rise in 2016 net income Tuesday to a record 10.3 billion yuan ($1.5 billion), largely on the back of cost cuts and gains from investments at home, including the sale of some shares in Shanghai-listed firms. Perhaps more importantly, Fosun, whose CEO Liang Xinjun is leaving for health reasons, has trimmed a debt load that's been aggravated by acquisitions including resort operator Club Med, Canada's Cirque du Soleil and Portugal's largest insurer.

According to China International Capital Corp., Fosun had reduced its net gearing ratio to 60 percent at the end of last year from 72 percent in June. It also managed to cut its cost of funds by 50 basis points to 4.5 percent in 2016, CICC analysts said.

One asset sale that had the happy coincidence of lowering leverage while limiting Fosun's exposure to regulators was its jettisoning of North American insurance outfit Ironshore Inc. for about $3 billion. Fosun pocketed a cool $310 million gain just 12 months after it made the purchase. Anbang Insurance Group Co., meanwhile, is still waiting for authorities to green light its $1.6 billion tilt at Fidelity & Guaranty Life, made back in November 2015.

U.S. regulators are taking a closer look at Chinese buying of insurance assets and the industry is going through a rough patch. Fosun reported total investment returns from insurance of 3.3 percent last year, versus 3.9 percent in 2015.

Barring a handful of deals in emerging markets such as India and Russia, Shanghai-based Fosun has made bulking up at home a focus. And introducing the brands it's already bought, like Club Med, to China is paying off. Club Med has opened five resorts in Asia's biggest economy since Fosun invested, and the group's revenue has been rising.

That Holiday Feeling
Club Med's revenue* from China has been rising as Fosun works to promote synergies with other brands like Thomas Cook and Cirque du Soleil
Source: Fosun company presentation
* Revenue generated from customers from China.

A focus on health, wealth and happiness may sound airy-fairy, but meeting the needs of Chinese consumers both at home and abroad is a much better strategy than using insurance firms as an asset base from which to expand while trying to eke out yields. Fosun may have lost its chief executive, but it hasn't lost its way.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Nisha Gopalan in Hong Kong at

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Katrina Nicholas at