Using Fukushouyuan's latest financial report as an observation sample, we can get a glimpse of how this leading domestic funeral and life technology service provider is actually leading the high-quality development process of the industry.
In this year's government work report, vigorously promoting the construction of a modern industrial system and speeding up the development of new quality productivity are listed as one of the key tasks. Generally speaking, new quality productivity is modern advanced productivity spawned by revolutionary breakthroughs in technology, innovative allocation of factors of production, and deep industrial transformation and upgrading. It has changed the quality of workers, labor materials, labor objects, and their optimal combination to a basic connotation, with an increase in total factor productivity as the core symbol.
It should be pointed out that “developing new quality productivity is not about ignoring or abandoning traditional industries”; on the contrary, new quality productivity will be an important engine that empowers traditional industries. In the future, with the help of new productivity factors to improve quality and efficiency, traditional industries will be deeply transformed and upgraded in the direction of high-end, intelligent, and green.
There is an old saying, “Life or death is too big,” and the importance placed on burial has always been an important part of Chinese culture. With the development and progress of the times, people's demand for funeral services is also constantly changing. This requires that the funeral industry not only inherit excellent traditional spiritual culture, but also adapt to the theme of high-quality development in the new era.
According to the Zhitong Finance App, Fushouyuan (01448) can be said to have played an important role in changing traditional funeral concepts, incorporating technological elements, spawning new momentum in the funeral industry, and developing new quality productivity in the funeral industry. Recently, Fukushouyuan just revealed its 2023 report. Using the department's latest financial report as an observation sample, we may be able to get a glimpse of how this leading domestic funeral and life technology service provider is leading the high-quality development process of the industry.
A sample of the high-quality development of the funeral industry
This past year, 2023, coincided with the 10th year that Fukujuen went public. Looking back on 2023, the fundamentals of Fushouyuan still have the word “stable” at the head. The annual report report card can be called a high-scoring questionnaire.
According to financial reports, Fushouyuan achieved annual revenue of 2,628 billion yuan (RMB, same unit), an increase of 21% over the previous year; net profit to mother was 791 million yuan, an increase of 20.1% over the previous year. Looking closely at the revenue structure, Fushouyuan's major businesses went hand in hand during the reporting period. Among them, the cemetery service achieved revenue of 2.165 billion yuan, accounting for 82.4% of the company's total revenue, an increase of 23.8% over the same period last year; funeral services received 398 million yuan in revenue, accounting for 15.1%, an increase of 10.7% over the previous year. In addition, the company also contributed part of its revenue from other services. The division's revenue during the period was 78.542 million yuan, accounting for about 3% of revenue.
The annual report sends a strong signal of value, and the underlying growth logic behind Fushouyuan's strong financial performance is that the company continues to operate steadily, and has continuously achieved positive results in cultivating the business and expanding the market.
Up to now, Fushouyuan's business has entered more than 40 cities in 19 provinces, autonomous regions, and municipalities directly under the Central Government. In 2023, Fushouyuan achieved rapid development of its own replicable model through mergers and acquisitions of high-quality assets, mixed transformation projects and cooperative projects as innovative points. In terms of the cemetery business, Fushouyuan acquired 100% of Yan'an Hongfu's shares, and since then, the company has officially expanded its footprint to Shaanxi Province; during the period, the company established new project companies in Tianjin and Zhaoqing City, Guangdong Province, respectively, and participated in project companies in Qiandongnan Prefecture, Guizhou Province. In terms of funeral business, Fushouyuan and partners have jointly established a joint venture in Shenyang. This is its first cooperative funeral project in the northern region, and also marks a further improvement in the company's funeral industry chain layout in Northeast China. Furthermore, Fushouyuan also signed an “Investment Cooperation Agreement” in Changzhou, and will subsequently invest in and operate life care service projects related to the funeral business in the region.
At the same time, in order to adapt to and meet the needs of people to make arrangements as soon as possible in the context of an aging population, Fushouyuan continues to vigorously promote pre-life contract business. In 2023, the number of contracts signed during the company's lifetime increased 5.7% year-on-year to 17,707. By “locking in” customers ahead of time, Fushouyuan was also able to reserve a stable source of customers for the cemetery and funeral parlor business.
It is worth mentioning that Fushouyuan's latest financial report also sent an “unexpected gift” to investors in the secondary market. According to the annual report, the company plans to pay an additional special dividend of HK21.39 cents per share in addition to the final dividend of HK$6.86 per share. Meanwhile, in mid-2023, Fukushouyuan already paid an interim dividend of HK9.06 cents per share, which means that the company's cumulative dividend payout for the year reached HK37.31 cents per share, and the annual dividend ratio was close to 100%.
Looking at it for a long time, in fact, Fukujuen has always had a fine tradition of generous dividends. In the ten years since listing, taking into account the 2023 final dividend and special dividend just announced, Fukushouyuan's cumulative number of dividends has reached 21, and the dividend strength has shown a trend of continuous strengthening in recent years.
The Zhitong Finance App believes that the reason why Fushouyuan can strongly give back to investors is that the company continues to grow bigger and stronger in its business. At the same time, abundant cash flow and a stable balance sheet also give it the motivation to continue to pay dividends. According to the data, the net cash flow from Fushouyuan's operating activities in 2023 was 1,223 billion yuan. Since 2014, it has maintained a good growth trend in years other than 2022, which was heavily affected by the epidemic; at the same time, the company's balance ratio remained low all year round, with almost no debt pressure.
Promoting in-depth industrial transformation and upgrading under a multi-pronged approach
Fukujuen was founded in 1994, and now it has officially entered its “adulthood.” For Fukujuen at this stage, in addition to “maintaining success” and creating economic benefits, it is probably also important to think about the future direction of the entire funeral industry.
Needless to say, the theme of the era of new quality productivity places higher social expectations on enterprises. Compared with traditional productivity, new quality productivity places more emphasis on the leading role of scientific and technological innovation, and has the characteristics of high technology, high efficiency, and high quality. In terms of integrating cutting-edge science and technology with the traditional funeral industry, Fushouyuan can be said to have achieved remarkable milestones, and it is expected that it will continue to produce abundant fruit in the future.
Specifically, in 2023, Fushouyuan completed the Shanghai Fushouyuan VR environment system, providing basic support for further development of online services. At the application layer, the company implemented digital human technology, restored character images through two- and three-dimensional display methods, and trained the knowledge base through AI to achieve the effect of free communication. According to information, at the 9th China International Funeral Equipment and Supplies Fair, Fushouyuan was the first to show digital human cases. It is expected that in the future, related technology will be widely used in scenarios such as farewell and burial ceremonies.
The rate at which products are being updated has also been further accelerated this year. During the reporting period, Fushouyuan officially released the 5.0 version of the Cloud Memorial Product, launched the “3JI” product, which integrates “marking, commemoration, and recording”, and launched the first batch of products in Qingpu, Shanghai and Zhengzhou, Henan, respectively. During the winter solstice, the company released digital family temple products, which displayed users' lives, photos, videos, and memorable items in the Yunshang Family Temple space; in addition, the company also created a family tree, using digital tools to inherit and continue family culture.
Fushouyuan also successfully developed a new cremation machine, JS3-II, which can greatly reduce cremation time and save energy consumption by more than 10%; in addition, the company has also manufactured a new type of exhaust gas purification equipment, which is expected to reduce overall costs by more than 15%.
While using technology to empower the digital transformation of the funeral industry, Fushouyuan also attaches great importance to the role of education and cultural heritage, and continues to export advanced ideas, technology and talent teams to the entire industry. The latest case is that in April of last year, Fushouyuan established “Liji College”, the first enterprise funeral vocational education college in China with the qualification of a non-academic higher education institution. This college is also another practice since Fushouyuan founded the “Fushouyuan Life Service College” in 2016.
At the end of last year, Fushouyuan also formed a national maternity and education integration community with 246 organizations, including Shanghai University, Beijing Vocational College of Social Management (Ministry of Civil Affairs Training Center), and industry-wide universities and vocational colleges, to build an ecosystem of cultural exchange and education for the industry.
For the ancient funeral industry, speeding up the cultivation of new quality productivity will probably be the only way for the industry to achieve long-term development. Looking back at Fushouyuan's latest financial report, it not only once again confirms that the company's operations are steady, but its dividend plan that exceeds expectations also shows that it has outstanding long-term allocation value; what is more commendable is that judging from Fushouyuan's emphasis on scientific and technological innovation and cultural heritage, the company will surely play an example role in promoting the deep transformation and upgrading of the industry and forming a new quality of productivity in the funeral industry in the future, and this will also be enjoyed by all parties.