Death Services to China’s Ageing Population Set for Profitable Growth

posted in: News Room 48

Article Originally Posted September 27th, 2016 by Jennifer Li in the South China Morning Post .

Analysts are raving about this one industry in China that has no overcapacity problem

The business of providing funerals and other death services to China’s ageing population is set for profitable growth

China’s death care market is to see robust growth in the coming five years, driven by the needs of an ageing society.

The number of people in China aged 60 or above is roughly 222 million, the largest elderly group of any nation. These seniors accounted for 16.1 per cent of the mainland population, according to China’s Ministry of Civil Affairs. By 2050, that figure is expected to surpass 300 million, according to mainland brokerage house Essence International.

About 47.1 per cent of funerals involved cremation in China in 2015.

Faced with increasingly scarce land and soaring property prices, Chinese authorities have been striving to bolster the popularity of cremation, something which could prove a challenge in a nation where the cultural norm is to bury the deceased. China’s Ministry of Civil Affairs announced policies two years ago to push up the cremation rate to 100 per cent by 2020.

The market of traditional death care is forecast to grow 35 per cent annually, from 110.8 billion yuan last year to 505.4 billion yuan in 2020, China Merchants Securities analyst Dong Ruibin wrote in a report. In addition, death services, which includes eco-friendly burial methods as well as some traditional services, will surpass 200 billion yuan by 2020.

On a related note, innovative and eco-friendly burial methods are becoming popular in the world’s second largest economy, especially in first and second tier cities.

Sea burial, tree burial and flower burial s are being promoted in Beijing Shanghai and other cities, according to China Merchants Securities.

Tree burial entails burying the ashes of the deceased underground, while flower burial entails disseminating ashes in flower beds.

In Beijing, there were 1,700 cases of sea burials in 2014.

The Chinese government encourages such methods which saves space that would otherwise be needed for graveyards and columbariums.

In a modern twist, the Ministry of Civil Affairs in February promoted the use of QR-code gravestones and other eco-friendly methods in place of traditional grave plots.

They also unveiled subsidies to promote the dissemination of ashes through burials at sea and land.

Demand for funerals has been growing strongly, along with services such as video and other services.

“Filiality tops among all the good moral character in a country that was largely impacted by Confucius thought,” China Merchants Securities said. “The custom of elaborate burial has never changed.”

China Merchants Securities expects the market for emerging death services, including eco-friendly burial methods and high-end funeral services to exceed 200 billion yuan by 2020.

Average gross profit margin in the industry is as high as 80 per cent and net profit margin is around 50 per cent, according to analysts from Soochow Securities.

Fu Shou Yuan International Group, China’s largest death-care service provider listed in Hong Kong, had a gross profit margin of 78.9 per cent for the six months ended June 30, according to a Hong Kong stock market filing.

Fu Shou Yuan’s shares have slumped 59 per cent so far this year, closing at HK$4.44 on Tuesday.

First Shanghai Securities gave a buy rating with a target price of HK$6.60, noting that the company’s revenue in the second half will likely rise at least 15 per cent on year. JP Morgan and Citi both also have buy ratings on the company.

Fortune Ng Fung Food Hebei, which operates pork farms and provides death care services, said its gross margin for the death care segment was 85.2 per cent during the first half, according to a Shanghai stock market filing.

“This is a sunrise industry, prices for grave plots at Fortune Ng Fung Food jumped over 30 per cent from a year back,” Soochow Securities’ analysts said.

Fortune’s graveyard is located in Yanjiao town of Hebei province, which is close to Beijing and Tianjin.

Dong said the high margin is related to non-transparent pricing in the industry.

For the most part, families have limited time to arrange death services, which means they won’t shop around. Moreover, cultural taboos can mean that it’s not easy to attract new workers into the industry, which means that higher wages in the sector also get passed along to consumers.

For new players who want to join the burgeoning market, ascertaining a license from local governments can prove difficult.

“There is a high entry barrier for operating graveyards because local governments only allow one to two licenses in a region,” Soochow Securities said.

Additional merger and acquisition activity is expected in the sector as major operators seek to expand their market share, analysts said.

This article appeared in the South China Morning Post print edition as:

Not all is gloom in death care sector

48 Responses

  1. JamesElurl
    |

    http://kamagra.icu/# super kamagra

  2. Derekfluip
    |

    http://mexicanpharmacy.company/# mexican online pharmacies prescription drugs mexicanpharmacy.company

  3. Davidvom
    |

    online shopping pharmacy india: best online pharmacy india – indian pharmacies safe indiapharmacy.pro

  4. RobertZep
    |

    reputable mexican pharmacies online: mexico pharmacies prescription drugs – buying prescription drugs in mexico mexicanpharmacy.company
    online shopping pharmacy india [url=https://indiapharmacy.pro/#]п»їlegitimate online pharmacies india[/url] reputable indian online pharmacy indiapharmacy.pro

  5. Brianscouh
    |

    indian pharmacy online: top 10 pharmacies in india – online pharmacy india indiapharmacy.pro

  6. Brianscouh
    |

    mexican mail order pharmacies: mexican online pharmacies prescription drugs – mexico pharmacies prescription drugs mexicanpharmacy.company

  7. Davidvom
    |

    best online pharmacies in mexico: mexican online pharmacies prescription drugs – pharmacies in mexico that ship to usa mexicanpharmacy.company

  8. RichardnuddY
    |

    https://canadapharmacy.guru/# onlinecanadianpharmacy 24 canadapharmacy.guru

  9. Derekfluip
    |

    https://indiapharmacy.pro/# top online pharmacy india indiapharmacy.pro

  10. Brianscouh
    |

    indian pharmacy paypal: cheapest online pharmacy india – cheapest online pharmacy india indiapharmacy.pro

  11. Derekfluip
    |

    https://indiapharmacy.pro/# india online pharmacy indiapharmacy.pro

  12. Davidvom
    |

    buying prescription drugs in mexico: mexican rx online – mexican pharmacy mexicanpharmacy.company

  13. Brianscouh
    |

    ed meds online canada: canadian pharmacy cheap – northwest canadian pharmacy canadapharmacy.guru

  14. RobertZep
    |

    top 10 online pharmacy in india: pharmacy website india – indian pharmacy online indiapharmacy.pro
    canadian pharmacy king [url=http://canadapharmacy.guru/#]legal to buy prescription drugs from canada[/url] reputable canadian online pharmacy canadapharmacy.guru

  15. RichardnuddY
    |

    https://indiapharmacy.pro/# indian pharmacies safe indiapharmacy.pro

  16. Derekfluip
    |

    https://canadapharmacy.guru/# is canadian pharmacy legit canadapharmacy.guru

  17. RobertZep
    |

    canadian pharmacy prices: safe canadian pharmacy – canada rx pharmacy canadapharmacy.guru
    canadian pharmacy king [url=https://canadapharmacy.guru/#]canadian drug pharmacy[/url] canadian 24 hour pharmacy canadapharmacy.guru

  18. Brianscouh
    |

    best india pharmacy: mail order pharmacy india – Online medicine order indiapharmacy.pro

  19. Davidvom
    |

    safe canadian pharmacy: canadapharmacyonline – canadian pharmacies comparison canadapharmacy.guru

  20. RobertZep
    |

    indian pharmacy: п»їlegitimate online pharmacies india – best india pharmacy indiapharmacy.pro
    buying from online mexican pharmacy [url=http://mexicanpharmacy.company/#]mexican mail order pharmacies[/url] buying from online mexican pharmacy mexicanpharmacy.company

  21. Derekfluip
    |

    https://indiapharmacy.pro/# best india pharmacy indiapharmacy.pro

  22. Brianscouh
    |

    canadian online drugs: canadian pharmacy prices – best canadian pharmacy to order from canadapharmacy.guru

  23. RichardnuddY
    |

    https://canadapharmacy.guru/# canada drugs reviews canadapharmacy.guru

  24. Derekfluip
    |

    http://indiapharmacy.pro/# online shopping pharmacy india indiapharmacy.pro

  25. RobertZep
    |

    precription drugs from canada: legal to buy prescription drugs from canada – best canadian online pharmacy canadapharmacy.guru
    indian pharmacy [url=http://indiapharmacy.pro/#]reputable indian pharmacies[/url] best online pharmacy india indiapharmacy.pro

  26. Brianscouh
    |

    mexico drug stores pharmacies: buying prescription drugs in mexico – best online pharmacies in mexico mexicanpharmacy.company

  27. Davidvom
    |

    mexico drug stores pharmacies: buying from online mexican pharmacy – mexican pharmaceuticals online mexicanpharmacy.company

  28. Derekfluip
    |

    http://mexicanpharmacy.company/# buying from online mexican pharmacy mexicanpharmacy.company

  29. RobertZep
    |

    india online pharmacy: reputable indian online pharmacy – indian pharmacy indiapharmacy.pro
    mexico drug stores pharmacies [url=http://mexicanpharmacy.company/#]reputable mexican pharmacies online[/url] medication from mexico pharmacy mexicanpharmacy.company

  30. Brianscouh
    |

    mexican pharmaceuticals online: п»їbest mexican online pharmacies – п»їbest mexican online pharmacies mexicanpharmacy.company

  31. Derekfluip
    |

    http://canadapharmacy.guru/# ed meds online canada canadapharmacy.guru

  32. RichardnuddY
    |

    http://mexicanpharmacy.company/# medicine in mexico pharmacies mexicanpharmacy.company

  33. RobertZep
    |

    canadian pharmacy world: canada pharmacy world – legitimate canadian pharmacy canadapharmacy.guru
    india online pharmacy [url=http://indiapharmacy.pro/#]top 10 pharmacies in india[/url] world pharmacy india indiapharmacy.pro

  34. Davidvom
    |

    online shopping pharmacy india: india pharmacy – mail order pharmacy india indiapharmacy.pro

  35. Brianscouh
    |

    pharmacy com canada: canadian family pharmacy – legal canadian pharmacy online canadapharmacy.guru

  36. Derekfluip
    |

    https://canadapharmacy.guru/# reddit canadian pharmacy canadapharmacy.guru

  37. RobertZep
    |

    canadian pharmacy: safe online pharmacies in canada – canada online pharmacy canadapharmacy.guru
    mexico drug stores pharmacies [url=https://mexicanpharmacy.company/#]buying prescription drugs in mexico[/url] mexico drug stores pharmacies mexicanpharmacy.company

  38. Davidvom
    |

    online pharmacy india: mail order pharmacy india – top 10 pharmacies in india indiapharmacy.pro

  39. Derekfluip
    |

    https://indiapharmacy.pro/# indianpharmacy com indiapharmacy.pro

  40. Brianscouh
    |

    best india pharmacy: online pharmacy india – reputable indian pharmacies indiapharmacy.pro

  41. RichardnuddY
    |

    https://indiapharmacy.pro/# world pharmacy india indiapharmacy.pro

  42. RobertZep
    |

    canadian pharmacy meds review: northern pharmacy canada – precription drugs from canada canadapharmacy.guru
    mexican pharmaceuticals online [url=https://mexicanpharmacy.company/#]mexico pharmacies prescription drugs[/url] mexican rx online mexicanpharmacy.company

  43. Derekfluip
    |

    https://mexicanpharmacy.company/# best online pharmacies in mexico mexicanpharmacy.company

  44. Brianscouh
    |

    pharmacies in canada that ship to the us: canadian pharmacies – reliable canadian online pharmacy canadapharmacy.guru

  45. RobertZep
    |

    mexican pharmaceuticals online: mexican mail order pharmacies – mexico drug stores pharmacies mexicanpharmacy.company
    buying from canadian pharmacies [url=http://canadapharmacy.guru/#]buying drugs from canada[/url] canada pharmacy online legit canadapharmacy.guru

  46. Donaldlib
    |

    http://propecia.sbs/# buy cheap propecia prices
    doxycycline prices [url=http://doxycycline.sbs/#]odering doxycycline[/url] doxycycline 50mg

  47. Robertjen
    |

    buying propecia without insurance: cost of propecia tablets – cost of cheap propecia price

  48. Jamesurirm
    |

    https://amoxil.world/# amoxicillin 250 mg price in india

Leave a Reply