China-Singapore Jingwei, April 1 (Zhang Shunan) "Underground CBD, back garden of life", the cemetery is known as "underground real estate", and its cost has always been the bulk of funerals.

Under the influence of traditional concepts such as "being safe in the ground", the listed companies behind this industry have "made a fortune" by relying on the advantages of high gross profit margin and high growth rate.

Fucheng's gross profit margin exceeds 80%

  Sino-Singapore Jingwei saw from the official website of Lingshan Pagoda Cemetery in Sanhe City, Hebei Province that the Bible tablets and golden and jade full halls that were sold before have disappeared. At present, there are 6 types of tombs, including 4 types in Wanshou Garden and 4 types in Shizun Garden. 12 species, Ruyi Garden contains 2 species, Luohan Garden includes 4 species, Zion Garden includes 3 species, and Fuze Garden includes 1 species.

  In terms of price, the lowest is the tree burial area of ​​Shizun Garden, priced from 19,800; the highest is the C3 area of ​​Luohan Garden, priced from 158,000.

Horizontal comparison, from the perspective of the highest price and the lowest price, in the same period in 2021, the most expensive price of the cemetery is the Demen Jiqing monument, with a price of 168,000 yuan; the cheapest ecological burial price is 19,800 yuan.

  Hebei Sanhe Lingshan Pagoda Cemetery is a wholly-owned subsidiary of Fucheng, an A-share listed company. In the first half of 2021, Lingshan Pagoda Cemetery achieved operating income of 76.1 million yuan, a year-on-year increase of 145%; net profit was 43.23 million yuan, a year-on-year increase of 312%.

  As the "first share of funeral and funeral" in A shares, Fucheng Co., Ltd.'s main business is beef cattle breeding, slaughtering and food processing. In December 2013, it added a catering company through mergers and acquisitions.

In 2015, it entered the funeral service industry and acquired Lingshan Pagoda Cemetery under the major shareholder. In 2018, the company acquired Tiande Fudi Cemetery and now holds 80% of Tiande Fudi Cemetery.

  Fucheng Co., Ltd. is expected to disclose the 2021 financial report and the 2022 first quarter report on April 28. From the previous operating data, funeral services are still the company's "star product".

  According to the third quarterly report of Fucheng Co., Ltd. in 2021, from January to September, the company's net profit attributable to shareholders of listed companies was 148 million yuan, of which the net profit of the catering sector was 16 million yuan, an increase of 1.5 times year-on-year; the net profit of the funeral sector was 66 million yuan, a year-on-year increase of 2.6 times, contributing nearly half of the net profit in the first three quarters of the year.

  Screenshot of Fucheng's 2020 Annual Report

  Looking at its 2020 annual report, the company's gross profit margin for tomb sales, management, and funeral services was 81.01%, a year-on-year decrease of 6.13 percentage points, but it was still Fucheng's product with the highest gross profit margin.

In contrast to other main businesses, the second highest gross profit margin is catering services, reaching 61.40%, a year-on-year decrease of 1.05 percentage points; the gross profit margin of beef, mutton and meat products is between 20% and 30%; the gross profit margin of dairy products is -2.79 %.

The unit price of Fushouyuan tomb sales rises

  Let's take a look at Fushouyuan, which is known as the "first stock of funerals" in Hong Kong stocks.

Fushouyuan landed on the Hong Kong Stock Exchange on December 19, 2013. At that time, the company's net profit exceeded 100 million.

The prospectus shows that in 2010, 2011, 2012 and as of January-June 2013, the company's gross profit margin was above 80%, making it the largest private funeral company in mainland China.

  Its 2021 financial report shows that the company realized a profit of about 2.326 billion yuan for the whole year, an increase of about 22.9% year-on-year; the total profit and comprehensive income attributable to owners was 720 million yuan, a year-on-year increase of about 16.1%.

  Fushouyuan said that in 2021, the company's operating tomb sales and service revenue increased by about 268 million yuan or 19.0% over the previous year, of which the number of sales increased by 2,046 or about 15.6%, and the average sales unit price increased by about 2.9%.

  Screenshot of Fushouyuan's 2021 annual report

  Judging from the source of Fushouyuan's revenue, in 2021, most of the company's revenue will come from cemetery services, accounting for about 82% of the total revenue.

The cemetery sales service is the largest component of the cemetery service revenue, accounting for more than 90% of the cemetery service revenue in 2021.

  However, Fushouyuan's business has already entered the funeral pre-sale market and began to "lock in customers in advance".

In 2015, Fushouyuan launched a new product, the contract before death, that is, the contract between the parties and the funeral service company on how to carry out funeral etiquette services after the death of themselves or their relatives.

  Fu Shou Yuan said that, as an important strategic fulcrum of the group, the contract service before death can help the group to lock in customers early and bring a stable customer reserve to the funeral and cemetery sectors.

As of the end of 2021, the pre-existing contract service has covered a total of 35 cities in 17 provincial-level regions across the country.

At present, life contract products have entered the product and service catalogs of many elderly care institutions.

  The annual report also shows that in 2021, Fushouyuan’s contract business during his lifetime continued to grow rapidly, with a total of 13,764 contracts signed, an increase of 133.1% over 2020.

Advocate the new trend of green civilized funeral in many places

  The main funeral policies provided by Beijing are: continue to carry out the "Zero Hundred Thousand" Benefit Project.

  Zero refers to zero consumption of deceased residents with registered permanent residence in Beijing who choose sea burial or natural burial.

Free arrangements are made for 6 funeral services, including body pick-up, body refrigeration, body cosmetic surgery, body farewell, body cremation, and ashes storage, and free ashes burial at sea and natural burial throughout the entire burial service.

  100 means that funeral homes provide citizens with multi-style, multi-material, environmentally friendly and low-cost urns of about 100 yuan.

  Thousands means that funeral homes provide citizens with at least one set of funeral services within a thousand yuan.

Including the transportation of remains, storage, plastic surgery, farewell, cremation, storage of ashes and other items, to achieve high-quality services throughout the process.

  Wanzhi means that all commercial cemeteries in Beijing can provide double-hole or double-cell columbarium facilities below 10,000 yuan to meet the basic requirements of citizens for columbarium.

  At the same time, Beijing strongly encourages citizens to actively choose ecological burial methods such as burying their ashes in the sea, natural burial, three-dimensional burial, flower bed burial, lawn burial, tree burial, and landscape burial to bury their deceased relatives. For residents whose household registration is deceased, the policy of reducing and exempting the cost of ashes will be implemented.

The key preferential care recipients and those who enjoy the minimum living guarantee for urban and rural residents are exempted from the unit fee. Other residents with Beijing household registration will receive a financial subsidy of 1,000 yuan per unit, and the residents themselves will pay 2,000 yuan.

Residents without funeral subsidies can enjoy a funeral subsidy of 5,000 yuan by applying to the social security office of the street (township) where their household registration is located.

  Chengdu proposed that in order to further promote the reform of funerals and advocate the new trend of green and civilized funerals, a total of 31 cemetery institutions in Chengdu will provide 1,332 ecological burial spaces for free this year.

  Zhejiang advocates the implementation of a new trend of green and civilized burial in various places, actively develops land-saving ecological burials such as tree burials, flower burials, lawn burials, and sea burials, increases incentives and subsidies for land-saving ecological burials, and encourages more people to accept and participate in land-saving ecological burials. Cultivate a simple, moderate, green and low-carbon funeral concept.

  Chaozhou Civil Affairs Bureau issued the "Chaozhou Ecological Burial Incentive Measures" in February, which clarified that for Chaozhou residents who meet the conditions and do not set up special sacrifices, each ashes can enjoy a one-time reward of 1,000 yuan, and can receive a commemorative certificate. And engraving the names of the deceased at the centralized memorial facilities.

(Sino-Singapore Jingwei APP)

(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)

All rights reserved by Sino-Singapore Jingwei. Without written authorization, no unit or individual may reprint, extract or use it in other ways.