On August 23, Fu Shou Yuan (1448.HK) disclosed its 2024 interim performance, achieving a revenue of 1.1 billion yuan, a net profit of 0.363 billion yuan, and a profit attributable to shareholders of 0.299 billion yuan. In addition, the company plans to distribute an interim dividend of 6.38 Hong Kong cents per share.
In the first half of the year, the external environment became more complex, severe, and uncertain. The internal structural adjustment pains in China have become apparent, with short-term effective demand being insufficient. There is a trend of more cautious consumer behavior among clients in the funeral industry, and the decision-making cycle for client consumption has lengthened, posing challenges to the industry's development.
To respond to the corresponding changes in the economic environment and client consumption behavior trends, Fu Shou Yuan continues to focus on the market and products from a dual perspective, making multipoint efforts in the areas of service extension, technology leadership, and cultural innovation. By implementing a "garden" strategy, the company has been striving to meet the diversified and differentiated consumer demands, especially at the spiritual level, and continuously enhance the core competitiveness of its products and services.
Stable operations with high growth and high ROI
Although the challenging macroeconomic environment and the high base from the same period last year have brought challenges to the development of Fu Shou Yuan, the strong financial support and management operations are sufficient to support the company's long-term sustainable development. As of now, Fu Shou Yuan's business coverage has expanded to 19 provinces, and the expansion plan in other important provinces, provincial capitals, and blank areas across the country is still steadily advancing, aiming to further consolidate and expand market share. In the future, with a cautious and steady approach, Fu Shou Yuan will select suitable targets, integrate diverse business resources, and acquire high-quality assets at a fair and reasonable price.
In the context of an aging population, pre-contracting has become an important strategic fulcrum for Fu Shou Yuan, not only attracting more customers who wish to arrange their end-of-life matters as early as possible, but also receiving recognition, support, and service procurement from governments at all levels and senior service organizations. In the first half of this year, Fu Shou Yuan signed a total of 11,923 pre-contracts, representing a 28.6% increase compared to the same period last year.
In addition to maintaining stable operations over a longer time frame, high cash dividends and shared development benefits have become part of Fu Shou Yuan's genes. It is understood that since its listing, Fu Shou Yuan's dividend payout ratio has always been maintained at over 30% and was raised to 45% in the 2024 interim period. In 2024, Fu Shou Yuan is expected to pay a dividend of 34.63 Hong Kong cents per share for the full year, with the current stock ROI at around 7.4%. For long-term investors, Fu Shou Yuan is a quality target with high growth potential and high ROI.
At the 2024 Brand Strong China Forum, Fu Shou Yuan was recommended by relevant departments and the media for its innovative achievements in brand building over the past 30 years. It was shortlisted as one of the "2024 China Innovative Brand Top 500" along with Huawei Technologies, State Grid, Tencent Technology, Alibaba, and Douyin. The brand value was evaluated at 13.995 billion yuan, with a brand index as high as 431.64 points, ranking 233rd.
Technology innovation empowers transformation and upgrade, cultural inheritance demonstrates social responsibility.
In the process of enterprise development, transformation and upgrade, self-innovation test the accuracy of the enterprise's strategy and the efficiency of practical operation. Nowadays, Fu Shou Yuan's self-positioning has changed from a "funeral service provider" to a "leading funeral and life technology service provider", and has proposed a development strategy from the physical world of "Fu Shou Yuan" to the spiritual world of "Fu Shou Yuan".
Compared with traditional technology fields, the technological process in the funeral industry has its unique attributes of life. Fu Shou Yuan believes that the future funeral industry will not only continue to provide support and comfort to people in the end of life, but also become an important force to promote human social progress and bridge the past and the future. What Fu Shou Yuan needs to do is not only about technological progress, but also about deep understanding and respect for life, maintaining the continuity of culture and emotion. The digital development of the funeral industry will contribute to the construction of a digital society that both respects the past and embraces the future for all mankind.
In the first half of the year, Fu Shou Yuan continued to implement the "3JI" concept (doing beauty as marks, doing thickness as records, doing length as commemorations) in applications in various regions and cemeteries. Specifically, through technological empowerment, using marks as links, tracing the root, virtual and real interaction, linking the physical and the real, carbon-based life and silicon-based life; based on records, preserving digital assets and continuing digital life (digital documentaries, digital life, digital museums); based on commemorations, maintaining emotional ties, combining online and offline commemorative spaces, and coexisting in the digital world.
Boosted by both the market and policies, the advantageous position is stable.
Only by standing on a higher and longer horizon can we see a broader picture. As the country with the largest population and the continuously increasing elderly population, China has great market vitality in the funeral service industry.
First of all, China's population aging level has entered a fast-growing lane. According to data from the National Bureau of Statistics, as of the end of 2023, the population aged 60 and above in China was 296.97 million, accounting for 21.1% of the total population, an increase of 16.93 million compared with the end of 2022, with the proportion of the population rising by 1.3 percentage points. Among them, the population aged 65 and above was 216.76 million, accounting for 15.4% of the total population, an increase of 0.5 percentage points compared to 2022. With the proportion of the population aged 65 and above exceeding 15%, it means that China has entered a deeply aged society.
Secondly, with the continuous promotion of funeral reform and the change of customs, the cremation rate of bodies in China has continued to increase in recent years. In 2021, a total of 5.966 million bodies were cremated nationwide, with a cremation rate of 58.8%, an increase of 3.1 percentage points compared to 2020. The trend of population aging and the increase in cremation rate not only indicate an increase in the total demand for funeral services by the public, but also reflect an improvement in the quality of funeral services and a diversified and differentiated demand for funeral service content.
With the cultural accumulation and service attributes of Fu Shou Yuan, it can meet the basic funeral service needs while also meeting the increasingly diverse and differentiated service requirements of the public, multi-level service content, and more convenient service scenarios to reflect human care and emotional comfort for the deceased and their families.
The government has also issued a series of policies to ensure the development of the funeral service industry. In June 2021, the Ministry of Civil Affairs issued the "14th Five-Year Plan for the Development of Civil Affairs", expanding the supply of funeral services to ensure that urban and rural disadvantaged groups can also obtain basic funeral services, while fully stimulating the innovation and vitality of the funeral industry. Ensuring and improving people's livelihood is a major task of China's modernization and must adhere to the principle of doing one's utmost and acting within one's capacity to continuously meet the people's aspirations for a better life.
It is foreseeable that under the dual stimulation of the market and policies, Fu Shou Yuan, as a leader in the funeral industry, is expected to further consolidate its market position and achieve long-term stable development.
In the special industry of funeral services, Fu Shou Yuan also regards cultural inheritance as its mission and responsibility in the active pursuit of transformation. The Li Ji College under Fu Shou Yuan is the first domestic enterprise-oriented funeral professional education college with qualifications as a non-degree higher education institution and the core member of the national funeral industry-industry-university integration community. In the first half of this year, Li Ji College hosted the second council meeting of the national funeral industry-industry-university integration community and the first China Funeral Governance Forum with 30 participants. It also took the lead in establishing the Yangtze River Delta Integration Life Service Business Think Tank, providing intellectual support for promoting exchanges between the government, industry, scholars, and researchers in China's funeral field and accelerating the improvement of China's funeral governance system.
In terms of international exchanges, Li Ji College organized an international research group to participate in the 2024 American ICCFA Annual Convention and Exposition, as well as the 2024 Asia Funeral and Cemetery Expo and Conference. It also took the lead in hosting the first institution-named sub-forum, the "Li Ji Global Forum", at AFE2024. In terms of policy research, Li Ji College is the main drafting unit for the "Public Welfare Burial (Placement) Facility Construction and Service Specifications", which was included in the 2024 Shanghai Pudong New Area Standardization Guiding Technical Documents Project Plan.
Looking ahead, Fu Shou Yuan will continue to adhere to the customer-oriented service concept, embrace technological change and industry transformation and upgrading opportunities, improve service efficiency and quality, and meet the growing needs of customers.
Source: Caibao Net
