How profitable are cemeteries in first-tier cities? A share "grave real estate" Company rolling Vanke Hengda!

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How profitable are cemeteries in first-tier cities? A share "grave real estate" Company rolling Vanke Hengda!

2019-04-07 08:02:45 623 ℃

live to buy a house, dead to buy a tomb, are just needed. When young people are still lamenting the high housing prices, as a "hindsight", funeral service industry is relying on the advantages of high gross margin and high growth to "make a fortune in silence". It is a traditional custom for people to remember their ancestors to sweep graves in the Qingming Dynasty, when

is another year. Many people in Beijing, Shanghai and other first-tier cities have to go to the surrounding cities to sweep their graves. The reason is that the price of the cemeteries in these places is too high. Many people choose the cemeteries in the neighboring cities.

Speaking of cemeteries, it is easy to think of "high prices", "windfall profits" and so on. How expensive is the price of cemeteries, is it windfall profits? Recently, Fucheng Stock (600965, SH), the only funeral concept stock in A shares, issued a financial report showing that in 2018, the gross interest rate of funeral business reached 87.96%. How expensive is a cemetery now?

Three days'short and long vacation, in Beijing, is likely to rush to Hebei to sweep the graves, in Shanghai, to Suzhou to sweep the graves. In Beijing, the price of cemeteries is too high to climb. The head of a large funeral company in Beijing said: "In a city like Beijing or Shanghai, the price of a cemetery has exceeded 100,000 yuan. The price per square metre is more expensive than real estate. In the most popular Cemetery of Tianshou, the most expensive cemetery costs about 1 million RMB.

In addition, according to Sino-Singapore longitude and latitude, it can be seen from the official website of Lingshan Pagoda Cemetery in Sanhe City, Hebei Province that the tomb types are divided into 35 types, such as Bible Stele, Tree Burial Area, Wugu Fengdeng and Heping Stele. The price ranges from 10,000 yuan to 140,000 yuan. The cheapest one is Bible Stele, which costs 9,900 yuan, and the most expensive one is Demen Jiqing Stele, which sells for 146,000 yuan.

According to China Youth Network, Taiziyu Cemetery is one of the large-scale cemeteries in Beijing with a large number of ashes. According to its staff, the price of double-cave cemeteries sold at present ranges from 95,000 yuan to 98,000 yuan and 108,000 yuan, as well as more than 200,000 yuan of multi-cave cemeteries, which do not include inscriptions on tombstones and burial services. The Futian Cemetery in Beijing, located in Xishan Scenic Area on the outskirts of Beijing, sells for about 200,000 yuan for less than one square meter of traditional cemetery. As the first funeral share of A share,

Fucheng shares sold 2748 cemeteries in 2018, with a revenue of 261 million yuan (the same as below). According to this calculation, the average price of a cemetery reached 949,000 yuan.

Look at the Fushou Garden, which is known as the first funeral stock in Hong Kong stock market. According to the Fushou Garden performance announcement in 2018, the average selling price of tombs has increased by 7.5% compared with 2017. In 2017, the sales unit price of Fushouyuan cemetery was 1024,000 yuan. What does

mean? According to the Hurun 2018 Global Housing Price Index, house prices in Chongqing rose by 8.9% in 2018 and 6.9% in Houston, USA, in 2018. That is to say, the rise of Fushouyuan Cemetery is only 1.4% lower than that of Chongqing and 0.6% higher than that of Houston. The gross interest rate of

funeral enterprises is higher than that of Housing enterprises

funeral business is 87.96%

where are the two "funeral first shares" mentioned above sacred?

Let's see Fushou Garden first.

According to public data, Fushouyuan landed on the Hong Kong Stock Exchange on December 19, 2013, when the company's net profit had exceeded 100 million yuan. The prospectus shows that in 2010, 2011, 2012 and January-June 2013, the net profit of the company was 113.7 billion yuan, 141.6 billion yuan, 138.2 billion yuan and 181.1 billion yuan respectively, and the gross profit rate was above 80%, which is the largest private funeral enterprise in the Mainland.

Fushou Garden's annual earnings in 2018 show that the company achieved a profit of 1.651 billion yuan, an increase of 11.8% over the previous year, and a net profit of 488 million yuan, an increase of about 17% over the previous year. The annual report also points out that most of the company's revenue in 2018 came from cemetery services, accounting for 86.4% of the total revenue in 2018. The sale of cemeteries is the largest component of the cemetery service revenue, accounting for 91.8% of the cemetery service revenue in 2018.

Showcase of Fushouyuan Annual Performance Bulletin 2018

On the eve of Qingming, Fucheng Share disclosed its annual report of 2018. During the reporting period, the company achieved 1.454 billion yuan in revenue, an increase of 6.85% over the same period, and realized a net profit of 160 million yuan, an increase of 2.45% over the same period. Among them, Sanhe Lingshan Baota Cemetery Co., a subsidiary of the company's funeral business, contributed 148 million yuan to Fucheng's net profit, accounting for more than 90% of the total net profit of listed companies.

It is understood that Fucheng shares landed in A shares in 2004, when the main business was cattle raising and beef cattle slaughtering and processing. In July 2015, Fucheng completed the major restructuring of Lingshan Pagoda Cemetery and entered the funeral industry. In 2018, Fucheng continued to expand its funeral business and completed the acquisition of 60% of the shares of Tiande Fudi Cemetery in Shaoshan, Hunan. Financial reports show that from 2016 to 2018, Fucheng's funeral business realized income of 197 million yuan, 227 million yuan and 261 million yuan, accounting for 14.54%, 16.89% and 17.95% of the company's total revenue, respectively. The annual report also shows that the gross interest rates of funeral industry of Fucheng stock reached 84.84%, 86.78% and 87.96% respectively in 2016, 2017 and 2018. During the same period, the gross profit rate of live cattle, beef, mutton and probiotic powder operated by the company was about 20%.

screenshot of Fucheng Stock's Annual Performance Bulletin 2018

Even real estate once considered to be a profitable industry, it is estimated that it will have to go down in the face of such a large gross interest rate. In 2018, the gross profit rate of leading enterprises such as Vanke, Biguiyuan and Hengda was far below 87.96% of Fucheng's shares. According to the financial report, the gross interest rate of Biguiyuan in 2018 was 27%, that of Hengda in 2018 was 36.2%, and that of Vanke in 2018 was 29.7%.

Funeral industry still has much room for development

With the increasing aging of the Chinese population and the increasing number of deaths in recent years, the demand for cemetery resources may increase in the future.

Industry analysts said that the market size of China's funeral industry is up to 100 billion yuan at present, and with the aging of China's society, the market size will further expand. Due to the strong regional nature of the funeral industry, the industry as a whole presents a small and scattered situation, there is no super-large leading enterprises in China, the largest annual revenue of Fushou Garden is only about 1.5 billion yuan, and there are great market opportunities. According to Li Junsong, an analyst at

China-Thailand Securities, the market size of the funeral industry is expected to reach 252.5 billion yuan by 2023, and the compound growth rate of the market size from 2018 to 2023 will reach 12.6%. He also said that in 2018, 16 departments such as the Ministry of Civil Affairs proposed the separation of management and management, which not only guaranteed the basic funeral services provided by the state, but also provided a broader stage for the development of private enterprises. According to Gronhui,

there is still a big gap between the current level of funeral services in China and that in developed countries. People need funeral services, but at the same time they are taboo about the aftermath. This contradiction between the actual needs and traditional ideas has become an obstacle to the development of funeral services. An analyst at Guosheng Securities told reporters that at present there are fewer enterprises engaged in funeral industry in China and there is more room for development, which will certainly attract the participation of some companies.

< p > < strong > The government has made efforts to regulate the price of cemeteries

< p > The government has also issued relevant policies to control the price of cemeteries.

On September 7, 2018, the Ministry of Civil Affairs promulgated the Regulations on Funeral and Burial Management (Draft Revision for Opinions). In explaining the reasons for the amendment, the Ministry of Civil Affairs said that the prices of funeral goods and services were too high, the price of cemeteries was too high, the occupancy of cemeteries was too large, and the gravestones were too large to arouse public discontent. The New Deal clearly stipulates that the government guided price shall be applied to the land use fees and maintenance and management fees of cemeteries for business purposes, and the government guided price shall be applied to the fees for extended services closely related to basic services such as body cosmetic operations.

Fucheng shares also mentioned in the annual report of 2018 that the state should establish a basic funeral and burial public service system, resolutely crack down on illegal construction of funeral and burial facilities, effectively safeguard the healthy development of the industry, which is good for the funeral and burial business operated in accordance with the law and regulations for a long time. At the same time, the company said that mergers and acquisitions in the field of funerals will be the theme of the company in the next few years. In China, cremation and seaburial belong to "ecological funeral". This land-saving burial method has been vigorously promoted nowadays. At present, Sanya, Chengdu, Chongqing, Guizhou and other places have introduced Huimin funeral subsidy.

For example, those who choose land-saving ecological burial method will be rewarded on the basis of cremation of the remains of the deceased in Sanya and the amount of funeral subsidy for Huimin is 4,790 yuan; those who choose land-saving ecological burial method will be rewarded according to category;

Chengdu household registered deceased choose to implement tower burial, wall burial and burial of three or more ashes in one cave, the standard is 1,000 yuan for one-time reward and compensation;

< p> heavy burial. Qingze rules stipulate that each person who chooses to bury ecologically on festival land or in flat ground or without graves can enjoy a subsidy of 3000 yuan for ecologically buried ecologically on festival land.

On January 10, 2018, the Ministry of Civil Affairs and other 16 departments jointly issued the Guiding Opinions on Further Promoting Funeral Reform and Promoting the Development of Funeral and Funeral undertakings. It is clear that by 2020, the proportion of ecological burial in such festivals as ashes storage, tree burial and sea burial will reach more than 50%.

Extension: Cemeteries can be used for up to 70 years, and the policy of

cemetery management can be traced back to 1992. The Ministry of Civil Affairs issued the Interim Measures for Cemetery Management that year, which stipulated that the land ownership of cemeteries should be owned by the state or collectives according to law, and that the management fee of operating cemeteries should not be charged for more than 20 years at a time.

How to renew the fee when the cemetery expires? According to the article of Beijing Morning Post on March 22, 2017, "Cemetery renewal only collects management fee when it expires: Rental renewal period is 20 years". Taking 30,000 yuan cemetery as an example (Beijing area), the second lease cycle only collects management fee of 1500 yuan, averaging 75 yuan per year, averaging only 6 yuan per month. <