Global Economics

A Lively Trading Debut for a Chinese Cemetery Giant


A Lively Trading Debut for a Chinese Cemetery Giant

Photograph by ChinaFotoPress/Getty Images

For many Chinese, even those not particularly superstitious, four is a number to avoid. In Mandarin, si (four) sounds the same as si (death). Just as buildings in the West often skip the 13th floor, some Chinese buildings do away with the fourth floor and go straight from the third to the fifth.

Still, if there’s any company that should have the number four in its stock ticker, it’s Fu Shou Yuan International Group, a death-care service provider that operates cemeteries and funeral facilities. The Shanghai company’s shares began trading today in Hong Kong, appropriately enough with a double-four in its four-digit ticker symbol: 1448.

Investors don’t seem troubled by the unlucky numbers. Fu Shou Yuan (1448:HK), which includes among its foreign shareholders Carlyle Group (CG) and Farallon Investors, offered shares at $3.33 each, and by the end of the day they had jumped 45 percent. The company expects to net proceeds of HK$1.55 billion ($193 million) from its Hong Kong IPO. At 681 times oversubscribed, the stock was a big hit among retail investors upbeat about the company’s chances.

Fu Shou Yuan also benefited from news out of Washington. With Ben Bernanke announcing that the Federal Reserve is trimming its monthly bond-buying program by only about 12 percent, Hong Kong stocks enjoyed a relief rally. “The Fed tapering wasn’t that sizable, and it cleared uncertainties,” Louis Tse, a director with VC Brokerage in Hong Kong, told Bloomberg News. “And that’s being welcomed by the market.”

Which shouldn’t detract from Fu Shou’s achievement. China’s Communist officials have long promoted cremation rather than burial. More recently, Shanghai and some other cities have offered incentives to promote burial at sea as alternatives to cemetery burials that take up valuable real estate. The government has also targeted the country’s funeral-home operators, with the official China Daily newspaper last December reporting: “China’s funeral industry has been the focus of public criticism for its excessive pricing of funeral products and confused industry standards.”

Despite the government’s disapproval, many Chinese still prefer traditional burial. For them, Fu Shou Yuan offers a wide selection that includes artistic tombs designed, as the company touts on its website, “totally according to the customers’ interest and requirements.” There’s also what the company calls Flower Bed Burial, with remains buried in a garden “with flowers in bloom the year round.” E-commerce is booming in China, so naturally Fu Shou Yuan has a online-shopping option, with customers able to choose from more than 60 different tombstones.

The Chinese way of death seems to be a good business. The company’s sales have grown 17 percent over the past three years, and revenue in 2012 was 480 million yuan ($79 million). The outlook is good, too, with the industry likely to almost double in size, to nearly 100 billion yuan, by 2017, the Global Times newspaper reports, citing a study by Euromonitor International. In addition to its base in Shanghai, Fu Shou Yuan has subsidiaries in Chongqing, Hefei, Shandong, and Henan and has won numerous accolades, including citations as an “education base for patriotism.” 

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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Companies Mentioned

  • 1448:HK
    (Fu Shou Yuan International Group Ltd)
    • $3.75 HKD
    • -0.01
    • -0.27%
  • CG
    (Carlyle Group LP/The)
    • $26.92 USD
    • 0.02
    • 0.07%
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