HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>China's relaxation of COVID-19 control measures is much faster than expected. Due to rising infection rate and mortality rate, China would bear some pressure in the short term. </li>
<li>We analyzed the direct impacts due to COVID policy shift and related investment opportunities. The hardest time of three-year COVID-19 has passed.The playbook of the pandemic is about to end.</li>
<li>With the new leadership taking office, China will be more committed to economic growth after the Two Sessions. Starting from 2023H2, China could formulate independent financial/monetary policies. China will change. </li>
</ul>


China's relaxation of COVID-19 control measures is much faster than expected. Due to rising infection rate and mortality rate, China would bear some pressure in the short term. 
We analyzed the direct impacts due to COVID policy shift and related investment opportunities. The hardest time of three-year COVID-19 has passed.The playbook of the pandemic is about to end.
With the new leadership taking office, China will be more committed to economic growth after the Two Sessions. Starting from 2023H2, China could formulate independent financial/monetary policies. China will change. 


China Makes U-Turn on COVID Policy - Here Are the Direct Impacts and Investment Opportunities

Equity Bottom-Up

<ul>
<li>China funeral industry has large growth potential.The total market scale would be about RMB400 billion if based on annual death toll of 10 million and per capita expenditure of RMB40,000.</li>
<li>Information asymmetry weakens the bargaining power of buyers. Administrative barriers raise the threshold of market access and weaken competition. So, related companies usually have high profitability and return on capital.</li>
<li>Changes in population structure would have a negative impact on most consumer goods, but demand of funeral industry would continue to rise. Investors would have both alpha and beta superposition.</li>
</ul>


China funeral industry has large growth potential.The total market scale would be about RMB400 billion if based on annual death toll of 10 million and per capita expenditure of RMB40,000.
Information asymmetry weakens the bargaining power of buyers. Administrative barriers raise the threshold of market access and weaken competition. So, related companies usually have high profitability and return on capital.
Changes in population structure would have a negative impact on most consumer goods, but demand of funeral industry would continue to rise. Investors would have both alpha and beta superposition.


China Funeral Industry - Investment Opportunity with Both Alpha and Beta Superposition

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Headquartered in Shanghai, <a href="https://www.smartkarma.com/entities/fu-shou-yuan-international" target="_blank" data-smartkarma-citation="entities:18168:1" rel="noopener">Fu Shou Yuan International (1448 HK)</a> (FSY) is one of the largest funeral home companies worldwide with revenue of US$289mn in 2020.
China has high entry barriers for the death care industry as local governments enforce licensing caps. Coupled with a shortage of burial space, an increasing wealthy portion of the population, and the social stigma attached to the business, FSY enjoys high margins amid a relatively inelastic demand.
Shares are down 12% from the recent high in May. A sound investment or is this dead money?

Headquartered in Shanghai, Fu Shou Yuan International (1448 HK) (FSY) is one of the largest funeral home companies worldwide with revenue of US$289mn in 2020.
China has high entry barriers for the death care industry as local governments enforce licensing caps. Coupled with a shortage of burial space, an increasing wealthy portion of the population, and the social stigma attached to the business, FSY enjoys high margins amid a relatively inelastic demand.
Shares are down 12% from the recent high in May. A sound investment or is this dead money?

Fu Shou Yuan (1448 HK): No Stiff Competition

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Event-Driven

We are following up on Crispin Francis' analysis of the Nirvana Asia privatization offer <a href="https://www.smartkarma.com/insights/nirvana-smells-like-team-spirit" target="_blank" data-smartkarma-citation="insights:4531">Nirvana - Smells like Team Spirit</a> with data on precedent M&amp;A transactions in the death services sector.  The data are predominately from North America, but appear to be comprehensive.  We obtained the information from the proxy statements for the privatization of Arbor Memorial Services in 2012, and Service Corporation International's (SCI: US) purchase of Stewart Enterprises.The table below provides the…

We are following up on Crispin Francis' analysis of the Nirvana Asia privatization offer Nirvana - Smells like Team Spirit with data on precedent M&amp;A transactions in the death services sector.  The data are predominately from North America, but appear to be comprehensive.  We obtained the information from the proxy statements for the privatization of Arbor Memorial Services in 2012, and Service Corporation International's (SCI: US) purchase of Stewart Enterprises.The table below provides the…

China

Fu Shou Yuan International Group, Ltd. is a death care service provider in China.  The Company operates cemeteries and funeral facilities.

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Fu Shou Yuan (1448 HK)

China Makes U-Turn on COVID Policy - Here Are the Direct Impacts and Investment Opportunities

China's U-turn on COVID policy will lead to rising infection/mortality rate.We analyzed the direct impact/investment opportunity. Under new...

Xinyao (Criss) Wang

China Funeral Industry - Investment Opportunity with Both Alpha and Beta Superposition

Death is inevitable, which provides continuous demand for China funeral industry. Related companies have high return on capital. investors will...

Xinyao (Criss) Wang