More than once (probably twice) had I heard from gurus if there is a listed funeral stock, it is a must buy. I have look at such companies. Listed in Australia Invocare own Singapore Casket and Simplicity Casket in Singapore, Service Corporation International in US, San Holdings Inc in Japan and HKEX listed Fu Shou Yuan in China.
Their business grow like a turtle. sure, like what the gurus said, when your loves are dead. The service provider is almost a must and unlikely to haggle. The service provider is impossible to DIY and is up to the business to price an expensive price tag for their services. Surprising the margin wasn't so great across different region, maybe a Chinese funeral is more costly?
However, for their business to grow, either they need to keep increasing prices, grow through M&A or pray more deaths every year. The latter seem impossible, depending in demography of the country, hence can only rely on inorganic growth. even so growth is limited on the amount of deaths. Stable undying trade no doubt but don't expect nice growth numbers.
Asia ageing population may tell a different story with an ageing population. This will aid in the the top line of these companies, Although I do not know how long will the majority of the seniors died off, which will end the boom cycle.
Out of the 4 listed above, the best and only growing business will be Fu Shou Yuan, the growth is double digit, owning to inorganic growth and of cos china has a huge population and the population is starting to age as well thanks to the one child policy.
Out of the 4 listed above, the best and only growing business will be Fu Shou Yuan, the growth is double digit, owning to inorganic growth and of cos china has a huge population and the population is starting to age as well thanks to the one child policy.
Of course, Fu Shou Yuan will be in my watchlist (Took a glace at their AR only) but in general, after death service isn't as great a business as it said/looks to be.
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