Throughout the history of business in the past few decades, every time there is a transition and replacement between the old and new business forms, it is a period of rapid iteration of technology. It is not so much that business needs lead to scientific and technological research and development, but that scientific innovation is subverting the old business order and giving birth to new needs.
As the artificial intelligence boom led by ChatGPT has swept the world, the traditional funeral industry ecology is also quietly undergoing subtle changes.
The new enterprises represented by Fushouyuan are relying on the power of science and technology to achieve digital transformation and create a new funeral and life science service provider.
Revenue and net profit both increased significantly, and profitability was strong
Recently, Fushouyuan released its 2023 results announcement.
During the reporting period, Fushouyuan's revenue in 2023 reached 2.628 billion yuan (RMB, the same below), a year-on-year increase of 21.0% compared with last year. During the year, the company's net profit was 976 million yuan, an increase of 20.4% over the previous year.
These two data not only show the steady growth of Fushouyuan's performance in the past year, but also reflect its leading position in the industry. In addition, profit attributable to shareholders (also known as net profit attributable to shareholders) in 2023 was 790 million yuan, an increase of 20.1% over the previous year, further confirming the company's strong profitability and continuous growth momentum.
In terms of debt-to-asset ratio, the company performed well. According to the financial report, the company's asset-liability ratio is only 3.5% in 2023 by dividing the total amount of borrowings at the end of each fiscal year by the total shareholders' equity. With such a low debt ratio, it can be seen that in terms of business model, Fushouyuan is far superior to companies in other industries.
According to the company's financial report, the asset-liability ratios from 2020 to 2023 will be 1.0%, 0.5%, 0.5%, and 3.5% respectively.
At the business level, the cemetery business will maintain rapid growth in 2023, with revenue increasing from 1.748 billion to 2.165 billion, a growth rate of 23.8%. Fushouyuan enhances the value of its products by combining traditional funeral services with modern technology services. In terms of volume, the number of commercial grave sales increased by 23.6 percent, and the average consumer unit price increased by 1.4 percent. From the perspective of both volume and price, it reflects that the quality of services provided by the company has been recognized by the market, and it also reflects that the company's competitive advantage in the high-end market is still strong.
The dividend policy demonstrates the company's strength and gives back to shareholders to show sincerity
In terms of dividend distribution, Fushouyuan has sent a positive signal to the market and shareholders this year.
During the Reporting Period, the Company paid a final dividend of HK6.86 cents per share and a special dividend of HK21.39 cents per share, which, together with the interim dividend of HK9.06 cents per share, brought the annual dividend to HK37.31 cents per share. The full-year dividend payout ratio is close to 100%, demonstrating the sincerity and importance that the company's management attaches to shareholders, as well as the company's confidence in continued profitability. In addition, if dividends in the reporting period are included, Fu Shou Yuan has accumulated dividends of HK$2.424 billion since its listing.
The company's special dividends, while taking into account the company's long-term sustainable development, further enhance shareholder returns, Fushouyuan is expected to become a high-growth and high-return enterprise.
Below: Fushouyuan's dividends and dividends over the years
Image credit: Straight Flush
From the perspective of net cash generated by the company's operating activities, it reached 1,222.5 million yuan in 2023, an increase of 40.8% over the previous year, indicating that the company has abundant cash flow and sufficient ability to support its dividend policy and future expansion plans.
From the perspective of cash flow, Fushouyuan has a relatively good business model, belongs to the "lying to earn" industry, and the company is an industry leader, and its competitive advantage is expected to be quite long-lasting. Excellent cash flow and stable balance sheet ensure the company's long-term sustainable development in the future.
Digital transformation to reshape life science services
With the sweeping of scientific and technological changes brought about by artificial intelligence, standing at the intersection of technological progress and the future of mankind, the funeral industry has been given a new and unique mission, that is: to explore the nature and form of life, and promote society to enter a new stage of development.
At this historical moment, Fushouyuan judged the situation, digitally transformed, upgraded its business, and embraced historical opportunities. Last year, the company's strategic positioning was upgraded to "life science service provider" and the "life" attribute was rethought from a philosophical perspective.
According to the form of life, it can be divided into carbon-based life and silicon-based life.
The so-called carbon-based life refers to the physical life with five senses: experience, thinking, emotion and cognition.
The so-called silicon-based life, that is, spiritual life, is similar to the chip technology that relies on silicon elements, and the life generated in the virtual world, such as presenting the deceased person in the form of an AI digital human, restoring the past and the aftermath of his body. To put it bluntly, it is to rely on science and technology, with silicon as the carrier, to endow the deceased with its life attributes.
Recently, the president of the company said at the performance meeting that Fushouyuan has been deeply involved in the business. Through the construction of a humanistic park, the company gathers a large number of physical and spiritual information of carbon-based life, and then integrates these physical and spiritual information, relying on modern technology to carry out large-scale digital retention of life information, such as biological genes, life stories, ideology and culture.
The company seems to have a larger vision and mission to collect and preserve information about an individual's life in a more comprehensive and detailed way, including physiological, genetic, and even physical and spiritual information such as personal stories and family histories. This vital information is essential for the future recovery or understanding of human history. Through the exploration of life, the company can help scientists design silicon-based carriers that mimic or exceed human biological function.
The management said frankly at the performance meeting that after the integration of life information is realized, Fushouyuan will use big data analysis and other means to transform life information into digital information with perception and cognition, that is, silicon-based information, so as to build a huge silicon-based information database.
At present, Fu Shou Yuan has joined hands with the Hong Kong University of Science and Technology to establish Lingjing Company to provide diversified application scenarios for the continuation of carbon-based life and the generation of silicon-based life. Through the creation of technology cloud, data cloud and scenes, a new era of Fushouyuan's development will be realized.
In the end, Fushouyuan Company wants to build a "cloud space" with the vision of "Digital Intelligence Cemetery", provide life inheritance, family culture services, integrate yuan into the park, and finally realize the digital immortality of carbon-based life.
Different from traditional funerals, the company relies on the power of science and technology to help all mankind build a digital society that respects the past and embraces the future, realizes the digital development of the funeral industry, and improves people's deep understanding and respect for life.
In layman's terms, companies are working on technological transformation.
At present, the company is making every effort to transform from the traditional funeral industry to the modern life science and technology service industry, and create a high-tech "life science service provider". To this end, the company will provide customers with funeral AI digital humans, metaverse, big data and other technological services, carry out digital preservation, connect carbon-based and silicon-based, and create new quality productivity.
At the performance meeting, the management revealed that three years ago, Fushouyuan had started to transform, carry out business layout, and prepare to build a data center in Hefei. At present, the company is the first leading enterprise in the industry to explore this business. To this end, the company's management is ambitious and determined to build Fushouyuan into a century-old enterprise.
The company's ambition is not small, and at the performance meeting, the company said that it would not rule out the layout of foreign markets when looking forward to the future business. At present, the company focuses on the domestic market, establishing a digital family culture inheritance service system for 400 million Chinese families, covering funerals, funerals, sacrifices, memorials, etc., and does not rule out the penetration of business into overseas markets such as Southeast Asia in the future, depending on the time.
In general, the traditional funeral industry, empowered by science and technology, has opened up a new track with innovative ideas and technical strength, changed the funeral industry, and developed new quality productivity. The company has found the direction of future digital technology development, relying on the deep transformation and upgrading of the industry, relying on digital innovation, getting rid of the traditional economic growth mode and productivity development path, and shaping a high-tech, high-efficiency and high-quality corporate image.
Liji College: To build a modern funeral industry talent training base
In April 2023, Liji College, a subsidiary of Fushouyuan Company, was officially inaugurated, and the company cooperated with a number of higher vocational colleges to establish the first two modern funeral industry colleges in China, committed to the integration of industry and education.
With the integration of industry and education as the core, Liji College gathers relevant internal and external resources in the national funeral industry to form an organic community, and realizes the goal of applying what has been learned and promoting learning through aggregation, division of labor and cooperation, so that the integration of industry and education can play a superposition effect in serving economic and social development.
In terms of industry talent training, Lai Chai College cooperates with colleges and universities to jointly promote the integrated development of industry, education and research in the funeral industry. By cooperating with universities, the college is able to introduce more educational resources and improve the quality of teaching and scientific research. Liji College provides a practical teaching base for students to improve their skills, promotes the continuing education of employees, and creates an incubator for talent training in the industry.
In addition, the Institute also actively conducts life education for the public to enhance the community's awareness and recognition of the funeral industry. Through life education courses and activities, the College conveys the correct outlook and values of life and death to the public, and guides people to respect and cherish life.
In the future, with the further deepening and development of the integration model of industry and education, it is believed that the Institute will continue to play a greater role in the cultivation of talents in the funeral industry and inject new vitality into the sustainable development of the industry.
epilogue
Since Fushouyuan stepped into the capital market, it has become a star in the eyes of secondary market investors.
Its unique business model is comparable to Moutai in the industry, with gross profit margin and net profit margin surpassing many industries, and its abundant cash flow and generous dividend policy are beyond the reach of other companies. In terms of financial report processing, Fushouyuan has shown an excellent and stable development concept with a prudent attitude of putting expenses in front and profits in the back.
The ancients said, "death and life are also great", life service, although the frequency of consumption is not high, it is an unavoidable part of everyone's life journey. Therefore, for the valuation and performance forecasts of the sector, we can learn from the valuation model of consumer goods.
Fushouyuan, as a leader in the industry, has a broad market space in the process of building a new life science and technology service system. With the global explosion of artificial intelligence technology in the past two or three years, it is time for companies to carry out digital transformation.
Although Fushouyuan is already a leader in the industry, its market share still has huge room for improvement, which undoubtedly provides a broad stage for the company's further development and shows its great potential as a growth stock.
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