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Investor Presentation
Fu Shou Yuan International Group Limited
March 2015 | Strictly Private and Confidential
These presentation materials have been prepared by Fu Shou Yuan International Group Limited (the ―Company‖) and have not been
independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy,
fairness or completeness of the information presented or contained in these presentation materials. The Company will not accept any liability
whatsoever for any loss howsoever arising from any information presented or contained in these presentation materials. The information
presented or contained in these presentation materials is current as of the date hereof, unless indicated otherwise, and is subject to change
without notice and its accuracy is not guaranteed. The Company does not provide any undertaking to update any such information
subsequent to the date hereof.
These presentation materials contain certain ―forward-looking statements‖. These forward-looking statements include but not limited to
projections, targets, estimates and business plans that the Company expects or anticipates will or may occur in the future. Certain statements,
such as those include the words or phrases ―potential‖, ―estimates‖, ―expects‖, ―anticipates‖, ―objectives‖, ―intends‖, ―plans‖, ―believes‖, ―will‖,
―may‖, ―should‖, and similar expressions or variations on such expressions may be considered forward-looking statements. These forward-
looking statements are made based on the operating conditions, strategies and other circumstances of the Company and are subject to
known and unknown risks and uncertainties that may be general or specific. Readers should note that a variety of factors, many of which may
be beyond the Company’s control, affect the performance, growth trends and actual results of the Company. These factors include, but are
not limited to, exchange rate fluctuations, market shares, peer competition, environmental risks, changes in social, political, legal, financial and
regulatory frameworks, international economic and financial market conditions and other risks and factors beyond the control of the Company.
Due to these factors, the future actual operating results of the Company may differ materially from these forward-looking statements. These
and other factors should be considered carefully and readers should not place undue reliance on any of the Company’s forward-looking
statements. The Company declares that, the Company and any associated companies, directors, officers, employees, consultants or
representatives of the Company assume no obligation to update or revise any forward-looking statement that is contained in these
presentation materials as a result of new information, future events or otherwise. None of the Company, or any of its associated companies,
directors, officers, employees, consultants or representatives is making any representations concerning the future performance of the
Company, or is responsible for any losses arising from reliance on the forward-looking statements contained in these presentation materials.
These presentation materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any
offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon
in any connection with, any contract, commitment or investment decision whatsoever.
Disclaimer
1
2014 Results Highlights
Total revenue increased by approximately RMB180 million, or around 30.0%,
compared with last year
Gross profit margin remained stable at around 80%
Fast Revenue Growth
with Stable Margins
Rapid Growth in
Profitability
Solid Balance Sheet
Strong Operating Cash
Flow
Operating cash flow increased by 85% to approximately RMB300 million
Cash conversion cycle maintained at around 300 days
Gearing ratio remained stable at 4.3%
Net Cash dropped to RMB1.2 billion, primarily due to several acquisitions in 2014
Reported net income amounted to approximately RMB230 million, representing
an increase of approximately 37.7% compared with last year
Net income margin remained stable at around 29%
2
270.469
44.2%
42.7%
2013 2014
EBITDA Margin (%)
339.343
611.8
795.1
2013 2014
2014 Results Highlights (Cont’d)
Revenue (RMB Million)
Gross Profit & Margin
(RMB Million)
EBITDA & Margin (1)
(RMB Million) Reported Net Income & Margin (2)
(RMB Million)
Note: (1) EBITDA = Profit before tax - Other income and gains, net + Finance costs + Depreciation of property and equipment + Amortization of intangible assets + amortization of cemetery assets + other expenses.
(2) Refers to Total Comprehensive Income Attributable to Owners of the Company. Adjustment in 2013: Tax of retained earnings (RMB2.75 million), gain on deemed disposal of an associate (RMB 16.48 million), listing fee (RMB26.5 million), compensation fee gained
from legal dispute with China Health. Listing fee, compensation fee and the 3 years’ legal costs from the legal dispute with China Health are adjusted based on the income tax rate of 25%.
3
491.7
635.8
80.4% 80.0%
2013 2014
Gross Profit Margin (%)
170.5
230.4
27.9% 29.0%
2013 2014
Reported Net Income Margin (%)
Table of Contents
1. Company Overview 5
2. Financial Summary 12
3. Recent Developments 20
4. Future Strategy and Outlook 27
Q&A
4
1. Company Overview
Fu Shou Yuan—Largest Death Care Services Provider in China
Overview of Fu Shou Yuan No. 1 Death Care Services Provider in China
Sustained and Rapid Growth Revenue (RMB Million)
Strong Profitability Gross Profit and Gross Margin (RMB Million, %)
480.0
310.0 277.0 210.0 172.5
Guangzhou FuneralParlor
Shanghai LonghuaFuneral Parlor
ShanghaiSongheyuan
Shanghai HaiwanQinyuan
Largest Player in Terms of Revenue 2012 Revenue (RMB Million)
We are the largest provider of death care services in China and have the most extensive geographical coverage. Our emphasis on providing
unique high quality death care services combining traditions with modern concepts, have made us a benchmark of the industry that others
seek to emulate.
Fu Shou Yuan is the largest provider of death care services in the PRC in terms of revenue and geographical coverage
Founded in 1994, Fu Shou Yuan is one of the first private
companies entrants into the PRC death care services industry
We provide premium death care services in major cities in nine
provinces of the PRC, and we have become one of the
leading players in every key market where we operate
Our brand, Fu Shou Yuan, is a leading death care services
brand in the PRC and enjoys a strong level of brand
recognition among consumers and members of the industry
The PRC death care services industry is the largest and one of
the fastest growing death care services industries in the world.
Fu Shou Yuan is well positioned to become a successful
consolidator in the industry
We offer customized burial services and a complete range of
funeral services, allowing us to develop best practices
in the industry
Source: Euromonitor International.
6 Company Overview
421.4 480.0
611.8
795.1
2011 2012 2013 2014
343.8 386.3 491.7
635.8 80.7% 81.6% 80.5%
80.0%
2011 2012 2013 2014Gross Profit Margin（%）
Business Focused on the Core-Value Sectors of China’s Death Care Industry
Basic Process for China’s Death Care Services Industry
Cremation
Services All crematoriums are regulated by the government, very few private players are
permitted to run certain crematoriums for a number of years(1)
Funeral
Services
Transport the deceased
to the funeral facilities
for refrigeration
Select funeral packages
and sign contracts
Prepare for the funeral
(cosmological services
and funeral hall
decoration)
Transport the deceased
to the crematoriums
Conduct farewell
ceremony Conduct funeral ritual
Cremains delivery and
consultation on burial
arrangements
Signing of the contract
Selection and design of
burial plot and
memorial
After-burial services
such as maintenance
of burial plots and
tomb-sweeping
Performance of burial
rituals and ceremonies
on selected date
Construction of
memorial and
landscaping of burial
plot
Burial
Services
Source: Euromonitor International. Note: (1) Qualified private enterprises can engage in cremation services.
China’s death care services industry mainly involves funeral, cremation and burial services. Fu Shou Yuan, as a private player, is primarily
engaged in burial and funeral services—two sectors with the largest value and the fastest growth in China’s death care services market.
7 Company Overview
Benefits from the Rapid Growth in China’s Death Care Services Industry
Source：Euromonitor International, EIU. Notes: (1) Aging rate equals the proportion of those aged above 60 in the total population
2014 Population and Aging Rates(1)
(Million People)
Large Population
PRC Death Care Services Industry Market Size, 2008–2017 (RMB Million)
Rapid Growth
Drivers for the Chinese Death Care Services Industry
Funeral traditions and customs have been
a special and important part of Chinese
culture for 5,000 years
After the PRC was founded in
1949, cremations also became
widespread
Since 1980’s, under the guidance of the government,
more service options are offered. Contemporary and
modern death care services industry started
Today, the industry experienced rapid
growth and attracted the participation of an
increasing number of private businesses
due to its tremendous potential value
The 5,000-year old traditional culture
focusing on filial piety
Continued aging population
Large population base
Rising urbanization and
cremation rate
Booming broader economy and
rising consumption level
Private players are leading the
transformation of the sector
28,405 31,951 35,723
41,394 46,524 53,017
61,247
71,377
83,773
99,296
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
History of Chinese Death Care Services Industry
8 Company Overview
1,356.0
23.6 64.0
318.8
127.0
15.7%
20.1% 23.3%
20.1%
32.8%
China Australia UK US Japan
Total Population Aging Rate
1994 Established Shanghai FSY
Industry Development
1999 Commissioned by the China
Funeral Association to provide
regular training courses
2001 Established Shandong Fu Shou
Yuan
2002
Acquired funeral facilities in
Chongqing
Became the first PRC company
admitted as a member of the
Australasian Cemeteries and
Crematoria Association and the
International Cemetery and
Funeral Association
Established Hefei Dashushan
Cultural Cemetery
2006 Media coverage by an industry
journal in Australia; attracted wide
attention
2007
Established Shanghai Nanyuan
2008
Acquired Henan Fu Shou Yuan
Established Hefei Renben in
Hefei City to provide funeral
services
2010 Our humanity commemorative
park and memorial was opened
in Shanghai
2012
Acquired Jinzhou Maoshan
Anling in Liaoning
2013 Acquired management control of
Shanghai Nanyuan
Expanded funeral services
business into Xiamen and Ningbo
Successfully listed on the HKEX
in December 2013, raising total
proceeds of US$247 million; the
first PRC death care company
to list in Hong Kong
Key Milestones
2014 Initiated construction of
Nanchang Hongfu Cultural
Memorial Park
Became a constituent stock of
the Hang Seng Index
Anhui Zhongfude Cremation
Machine Factory began
production
Acquired Chongqing Baita Yuan
cemetery
Acquire Liaoning Guanlingshan
Cultural Landscape Cemetery
Acquire Shanting Xingtai and
Wanshoushan Lingyuan
1994–1999 2000–2003 2009－2013 2004–2008 2014－Present
9 Company Overview
Founding Period
Developing Period
Maturing Period
Exploring/ Innovating Period
Subliming Period
Group Level
Famous Trademark of Shanghai
Shanghai FSY was awarded
―National Demonstration Unit
for Death Care Services
Reform‖
Champion of Brand
Innovation in China
Deputy GM was named "Top 10 Outstanding
Women for Asian Brands"
Recent Awards and Achievements
Top 10 Most Valuable Asian Brands Group General Manager
was awarded ―National
May Day Labor Medal"
China Charity Award
Shandong FSY was awarded
"Advanced Collective for
Organizing Donation"
Jinzhou Maoshan Anling was
awarded "Ecological Cemetery
of Liaoning Province"
Jinzhou Maoshan Anling was
awarded "National Ecological
Cemetery"
The GM of Chongqing
Anletang was awarded
"Outstanding Entrepreneur of
Chongqing"
Hefei Dashushan Cultural
Cemetery was awarded ―AAA
National Tourist Attraction‖
Shandong FSY was awarded
"Provincial Demonstration Unit
for Death Care Services
Reform"
Awarded ―President’s
Award‖ by the Community
Chest of Hong Kong
Top 10 Brand for Enterprise
Culture Innovation in Shanghai
Subsidiary Level
Group Level
Group Level
Subsidiary Level
China Demonstration
Company
For PR Innovation
2008–2011
2012–2013
2014–Present
10 Company Overview
Subsidiary Level
The New Fourth Army
Square of Shanghai
FSY welcomed the
ashes of Marshal
Chen Yi and his wife
Ranked 82 in Forbes Top
100 Most Promising Chinese
Listed Enterprises
Won Silver Award of
Shanghai Outstanding PR
Case Studies
(sq.m.)
Fu Shou Yuan expended 20,691 sq.m. of land in 2014, and had an aggregate saleable area of 3,489,384 sq.m. remaining to support
development for at least another 20 years, with 1,566,404 sq.m. of which acquired land certificate
Years Already in Operation(2)
Note：(1）Public area of Chongqing Baitayuan, Wanshoushan Lingyuan and Liaoning Guanlingshan cannot be fixed, as the overall cemetery planning has not been completed at present. It is assumed that 35% of total area of the above cemeteries is public area that not for sale.
（2）All the cemeteries are permitted to operate for 50 to 70 years.
189,344
52,881
214,827
437,651
41,330 16,606
144,500 161,573 51,134 41,621 85,824 129,114
114,185
16,192
19,513
20,738
15,676 100,545
7,110 18,000
13,000 0
19,000 0
1,448,956
130,065
303,529
69,073
234,340
458,389
57,006 117,151
151,610 179,573
1,513,090
171,686
104,824 129,114
Shanghai Fu ShouYuan
Shanghai Nanyuan Henan Fu ShouYuan
Shandong Fu ShouYuan
Hefei DashushanCultural Cemetery
Jinzhou MaoshanAnling
Nanchang HongfuCultural Cemetery
ChongqingBaitayuan
LiaoningGuanlingshan
Cultural LandscapeCemetry
Shanting Xingtai WanshoushanLingyuan
Huaibei FangshanFu Shou Yuan
Total Saleable Area Area Taken Up Land Tenure Acquired in Other Ways
21 8 9 14 13 13 1 15 0 0 2 12
Saleable and Taken Up Area by Cemetery (1)
11 Company Overview
Extensive Land Bank to Support Future Growth
Fu Shou Yuan has ample land bank to support future cemetery development for at least 20 years, with potential upside
from further expansion into other major cities across China.
2. Financial Summary
The Company has been focused on product development and brand building over the past year, achieving consistent and
strong revenue growth and increasingly extensive geographic coverage.
Strong Revenue Growth & Geographic Business Expansion
2014
2014
Revenue (RMB Million)
Rapid Expansion to Various Regions Geography Split (%)
Shanghai 60.7%
Henan 6.0%
Chongqing 8.5%
Anhui 11.1%
Shandong 6.0%
Liaoning 6.4%
Fujian 1.3%
Zhejiang 0.1%
Burial services 85.6%
Funeral services 14.4%
Revenue Breakdown by Services Product Split (%)
Increases in revenue were primarily due to both increases in burial
and funeral services, as a result of increases in sales, through
expansion and acquisitions.
Auxiliary services including landscaping and designing services
for cemeteries were launched in 2014.
2013
2013
13 Financial Summary
87.2% 87.3%
85.6%
84.7%
12.8%
12.7%
14.4%
13.8%
1.5%
421.4
480.0
611.8
795.1
2011 2012 2013 2014
Burial services Funeral services Auxiliary Services
Shanghai 59.6% Henan
6.9%
Chongqing 8.5%
Anhui 10.7%
Shandong 5.6%
Liaoning 6.6%
Fujian 1.7%
Zhejiang 0.3% Jiangxi
0.1%
Burial services 84.7%
Funeral services 13.8%
Auxiliary services
1.5%
Revenue Growth in Various Regions
The Company has achieved significant growth in 9 provinces and cities and became one of the leading death care
services providers in most of the cities.
Shanghai
(RMB Million)
Henan (RMB Million)
Chongqing (RMB Million)
Shandong (RMB Million)
Liaoning (RMB Million)
Fujian (RMB Million)
Note: (1) No revenue in 2013.
Anhui (RMB Million)
Zhejiang (RMB Million)
14 Financial Summary
371.3
474.3
2013 2014
36.6
54.5
2013 2014
52.1
67.7
2013 2014
68.0
84.7
2013 2014
36.4
44.9
2013 2014
39.3
52.4
2013 2014
7.7
13.5
2013 2014
0.4
2.2
2013 2014
Jiangxi (RMB Million)
1.0
2013 2014
NA (1)
Overview of Burial Services Revenue
The Company offers 6 type of burial plots to meet different customer needs. Customized and artistic burial plots are the
primary offerings and have recorded stable sales in the last years and had relatively higher ASPs out of the segment.
Customized Burial, 31.0%
Artistic Burial, 32.4%
Traditional Burial, 16.0%
Lawn Burial, 8.2%
Green Burial, 1.1%
Indoor Burial, 1.5%
Others, 9.8%
2013
Revenue Breakdown by Segment
Customized Burial, 33.7%
Artistic Burial, 26.3%
Traditional Burial, 20.5%
Lawn Burial, 8.5%
Green Burial, 0.7%
Indoor Burial, 1.1% Others, 9.2%
2012
15 Financial Summary
Customized Burial, 27.9%
Artistic Burial, 36.3%
Traditional Burial, 17.9%
Lawn Burial, 6.1%
Green Burial, 0.9%
Indoor Burial, 1.3% Others, 9.6%
2014
Customized Burial Plots
633 696
256,670 269,647
2013 2014
No. of Units Average Selling Price (RMB/Plot)
Artistic Burial Plots
Indoor Burial Green Burial Plots Lawn Burial Plots
Traditional Burial Plots
2,032
3,783
83,427
64,662
2013 2014
No. of Units Average Selling Price (RMB/Plot)
2,068
2,520
40,594 47,909
2013 2014
No. of Units Average Selling Price (RMB/Plot)
952
755 44,915
54,417
2013 2014
No. of Units Average Selling Price (RMB/Plot)
550 586
10,340 10,401
2013 2014
No. of Units Average Selling Price (RMB/Plot)
1,432
1,753
5,583 5,003
2013 2014
No. of Units Average Selling Price (RMB/Plot)
Gross profit continued to grow at a healthy and fast pace.
Strong Profitability
Burial Service Gross Profit and Margin (RMB Million)
Gross Profit and Gross Margin (RMB Million)
Funeral Service Gross Profit and Margin (RMB Million)
Gross profit grew at 29.3% from 2013 to
2014, while maintaining a stable gross
margin at around 80% over the year, a
reflection of Fu Shou Yuan’s premium
marketing positioning, excellent pricing
power and strong cost control
Gross profit for burial services grew
steadily at a 29.2% from 2013 to 2014
Gross margin maintained stable at around
82%
Gross profit for funeral services increased
at 28.1% from 2013 to 2014
Gross margin rose by approximately 2% to
72.7%
16 Financial Summary
429.4
553.6
62.3
79.8
2.4
491.7
80.4%
80.0%
2013 2014
Burial services Funeral services Auxiliary services
429.4
553.6
82.0% 82.2%
2013 2014
62.3
79.8
70.8%
72.7%
2013 2014
EBITDA and adjusted net profit have continued to grow at a healthy pace.
Strong Profitability (Cont’d)
Note: (1) EBITDA = Profit before tax - Other income and gains, net + Finance costs + Depreciation of property and equipment + Amortization of intangible assets + amortization of cemetery assets + other expenses.
(2) 2013 adjustments: tax impact of RMB2.75mm arising from undistributed profits, gain of RMB16.48mm on deemed disposal of an associate, other expenses related to the IPO process of RMB26.5mm, compensation related to dispute settlement from China Healthcare of
RMB3.95mm. A tax rate of 25% is applied to China Healthcare compensation and consulting fees, and IPO expenses.
EBITDA(1 and EBITDA Margin (RMB Million)
Adjusted Net Income and Net Margin(2) (RMB Million)
EBITDA grew at a YoY growth rate of 25.5% from 2013 to 2014,
with slight decreases in margin
The fall in EBITDA margin was mainly because the rise in
operating expenses as a result of higher variable expenditures to
support the business growth, post-IPO investor relation and
higher staff costs
YoY growth rate of 37.7% from 2013 to 2014
There are no one-time expenses/gains that need to be adjusted
in 2014
The increase in net margin benefited from the decrease of
effective tax rate
17 Financial Summary
270.5
339.3
44.2%
42.7%
2013 2014
170.5
230.4
27.9% 29.0%
2013 2014
Cost and Expense Breakdown
The Company has a cost structure and expense management system aimed at maximizing resource utilization and
efficiency.
Operating Expenses (RMB Million)
Cost of Sales and Services (RMB Million)
Cost of sales and services includes tombstone cost, land cost,
development cost , cemetery maintenance cost and others, among
which tombstone cost accounts for the largest portion
Cost and expenses as a percentage of revenue have been largely
stable and generally in line with revenue growth
The increase were mainly due to our business growth in burial and
funeral services and launch of the auxiliary services in the year of
2014
The rise in operating expenses was mainly the result of higher
variable expenditures to support the business growth, higher staff
costs due to the effect of amortization of expenses for the pre-IPO
options granted in August 2013, annual salary adjustment and new
hiring
Increases in administrative expenses post-IPO and expenditures
related to organizing roadshows also increased administrative
expenses
18 Financial Summary
120.2
159.3
19.6% 20.0%
2013 2014
Cost of Sales and Services % as of Revenue
123.0 149.4
106.0
199.7 228.9
349.1
37.4%
43.9%
2013 2014
Selling and Distribution Expenses Administrative Expenses
% as of Revenue
Capital and Cash Management and Returns
The Company has effective cash and capital management to support its sustainable development.
Cash Conversion Cycle (1) (Days)
Strong Operating Cash Flow (RMB Million)
Strong Net Cash (3) (RMB Million)
Note: (1) Cash conversion cycle = average inventory turnover days – average trade payables days. Average inventory turnover days = average inventory / cost of sales and services * 365. Average trade payables days = average trade payables / cost of sales
and services * 365.
(2) Gearing ratio is calculated as total borrowings divided by total equity.
(3) Net cash = bank balances and cash – total borrowings.
Gearing Ratio (2) (%)
19 Financial Summary
446 457
304
(143) (164)
2013 2014
Inventory Turnover Days Trade Payables Days
1,466.8
1,202.2
2013 2014
4.4% 4.3%
2013 2014
161.7
299.1
2013 2014
3. Recent Developments
Acquisition of Chongqing Baita Yuan On June 18, 2014, Fu Shou Yuan Group purchased 60% interests in Chongqing Baita Yuan for RMB110 million, signaling its official entry into the
cremation services market in Chongqing.
Overview of Chongqing Baita Yuan Strategic Significance of Chongqing Baita Yuan
21
Cremation
Services
Funeral
Services
Burial
Services
Service Not
Provided by
FSY Prior to the
Acquisition
First integrated cemetery, funeral parlor and
crematorium provider under Fu Shou Yuan, filling
the gap on the industry chain for the Group
Fu Shou Yuan’s existing two cemetery facilities in
Chongqing and Baita Yuan can generate mutual
benefits through cross selling
Chongqing Baita Yuan signed a 30
years business licensing
agreement with the government
–The only private-owned crematorium provider
approved by government in the Yongchuan District
–The Company is entitled to 100% revenue and profit
–Subject to government regulation
• Located in the Yongchuan District of Chongqing City and 54 kilometers from
downtown
- A high speed rail will start operating by end of 2014, making it a 15-minute
ride to downtown
- Except for downtown Chongqing, Yongchuan District has the highest
urbanization rate of 58.4%
• Within the Yongchuan District, there are 1.2 million residents and Chongqing
Baita Yuan is the only commercial cemetery, crematorium as well as funeral
parlor, making it the monopoly in the highly promising local market
- Chongqing Municipal Government has declared it would not approve any
new commercial cemetery development in downtown Chongqing; there are
currently 14 commercial cemeteries in the downtown area, most of which
are mid to low-end (no Class I cemetery) and almost fully occupied
• Established in 2000, Chongqing Baita Yuan offers burial plots, funeral products
and columbarium services; it currently holds 14 parcels of land with a total area
of approximately 306,212 sq.m.
Cemetery Landscape Awards and Recognitions
Cemetery
Total Area Approximately 306,667 sq.m.
Developed Area Less than 66,667 sq.m.
Total Planned Area Approximately 179,573 sq.m.
Sufficient Land Reserve
Recent Developments
1
Acquisition of Liaoning Guanlingshan Cultural Landscape Cemetery On November 13, 2014, Fu Shou Yuan Group acquired 70% equity interest in Liaoning Guanlingshan Cultural Landscape
Cemetery with RMB 279 mm, which became the largest cemetery (in terms of land area) owned by Fu Shou Yuan.
Overview of Liaoning Guanlingshan Deal Structure and Process
22
• Liaoning Guanlingshan Cultural Landscape Cemetery is located in
scenic area and it is readily accessible. It is 40 kilometers from
Shenyang, 28 kilometers from Tieling and 18 kilometers from Fushun.
• Shenyang City is the largest city in Northeast China with a 7 million
population, while Tieling and Fushun have a total population of nearly 5
million.
- offer promising prospects to the development of deathcare services
industry, considering their respective levels of disposable income,
average spending on deathcare services and the growth in the aging
population
• The cemetery started operation in 2013. The principal businesses
comprise development and sale of burial plots and funeral products. It
currently has a total assets of approx. RMB 319mm and holds parcels of
land measuring 2.33 million sq.m
Cemetery Landscape
Pre-deal
Post-deal
Liaoning Guanlingshan Cultural
Landscape Cemetery
Shenyang Rongyuan
（90%）
Tieling Puyuan
（10%）
Panyang
Rongyuan
（27%）
Tieling
Puyuan
（3%）
Status：Announced on November 13, 2014
Capital Injection：RMB279 million
Total land ownership Approximately 2,329,333 sq.m.
Area granted land certificate Approximately 98,667sq.m.
Area to receive land certificate in
3 years
Approximately 333,333 sq.m.
Abundant Land Reserve
Liaoning Guanlingshan Cultural
Landscape Cemetery
2
Recent Developments
Fu Shou Yuan
（70%）
Acquisition of Liaoning Guanlingshan Cultural Landscape Cemetery (Cont’d) On November 13, 2014, Fu Shou Yuan Group purchased 70% interests in Liaoning Guanlingshan Cultural Landscape
Cemetery for RMB279 million, which is Fu Shou Yuan's largest cemetery in terms of land area.
Strategic Significance of Liaoning Guanlingshan Cultural Landscape Cemetery
23
Liaoning Guanlingshan Cultural Landscape Cemetery enjoys superior location and great traffic
convenience. It is 40 kilometers from Shenyang City, 28 kilometers from Tieling City and 18
kilometers from Fushun City. It is close to one of the two available funeral parlours of Fushun.
As the largest single cemetery owned by Fu Shou Yuan, Liaoning Guanlingshan holds large
parcels of land which helps strengthen Fu Shou Yuan’s position in Northeast China.
Nearly 100,000 sq.m land has received the land use right certificate, and total land use right will
be 330,000 sq.m within three years
Shenyang, the largest city in Northeast China, has a population over 7 million with the death rate
more than 7‰. Residents have higher disposable income and higher deathcare services
spending.
Total population of Fushun and Tieling City is nearly 5 million, with death rate maintained at
around 8.5‰ and 5.8‰
Fu Shou Yuan’s
Expansion into
Northeast China
Large Land
Reserve
Strong
Potential
Local Market
Saleable area of Liaoning Guanlingshan
Cultural Landscape Cemetery accounts to
40% of Fu Shou Yuan Group's total
saleable area
2
Recent Developments
Acquisition of Shanting Xingtai and Wanshoushan Lingyuan
On December 18, 2014, Fu Shou Yuan Group acquired 100% equity interest in Shanting Xingtai and 75% equity interest in Wanshoushan Lingyuan with
RMB 5mm and RMB 40mm respectively. The deals further consolidate Fu Shou Yuan’s position in Shandong and Jiangxi provinces..
Overview of Shanting Xingtai Overview of Wanshoushan Lingyuan
24
• Shanting Xingtai is located in Shanting District, Zaozhuang City,
Shandong Province.
- Shanting Xingtai has a much larger land reserve compared with
local peers, which represents strong development and expansion
potential.
- Transportation is convenient with 40 minutes by high-speed train to
Jinan.
• Zaozhuang is a major city in the south of Shandong Province, with its
population over 3 million.
• Shanting Xingtai was jointly sponsored by Department of Civil Affairs
of Shandong Province and Bureau of Civil Affairs of Zaozhuang
Municipality. FSY continues to developing the cemetery after the
takeover, which is expected to start operation by late 2015.
Total Area Approximately 164,000
sq.m.
Sold Area About 19,000sq.m.
Land Reserve
• Wanshoushan Lingyuan is located in Wuyuan County, Jiangxi
Province
- Wanshoushan Lingyuan has a tranquil environment and is readily
accessible by public transportation including the Wuyuan Station
on the Jingfu Express Railway.
- The urbanization rate of Wuyuan City has reached 43%, which is
relatively high in Jiangxi Province
• Wuyuan County has a population of 360,000. Wanshoushan is the
only commercial cemetery, crematorium as well as funeral parlor,
making it the monopoly in the highly promising local market.
• Starting operation in 2002, Wanshoushan offers burial plots, funeral
products and cremation services.
Land Reserve
Shanting Xingtai
under Construction
Total Area Approximately 64,025 sq.m.
Sold Area 0 sq.m.
Area to receive land certificate Approximately 202,639 sq.m.
3
Recent Developments
4
Government offers lands and Fu Shou Yuan provides funds to build new cemeteries jointly
Strategic cooperation in
Shenyang and Jinzhou
Strategic cooperation with
Fushun and Tai’an
Self-developed Cemeteries
Besides M&As, Fu Shou Yuan are actively developing new cemeteries to speed up the pace and expand business across
China.
Local Death Care
Authorities
Huaibei Fangshan cemetery project
Capital advantage,
rich industry
experience, strong
brand name, team
and sound service
system
Lands, business
license, favorable
policy support
At the end of 2014, FSY signed strategic
cooperation framework agreements
separately with Fushun and Tai’an.
In August 2014, FSY invested RMB 30
million to build Huaibei Fangshan
Cemetery project jointly with the local
government , and occupies a 51% stake
Huaibei Funeral Service Center owned by
Huaibei government offers 129,114 sq.m
land for stake of 49%
Huaibei Project will help FSY to further
expand market share in Anhui Province
In December 2014, FSY entered into
strategic cooperation agreement with the
People’s Government of Huinan District
Shenyang City and the People’s
Government of Jinzhou City respectively
Fu Shou Yuan will be responsible for
performing due diligence, feasibility
study, investment funding, introduction of
high-tech deathcare facilities and
construction of a new service system
while Governments of Huinan District and
Jinzhou will provide potential deathcare
services projects
According to the agreements, Huinan
District and Jinzhou City will invest RMB
2.0bn and RMB 280mm respectively
during the 10-year cooperation period
Recent Developments 25
The Cooperation with Fushun that will
further deepen and consolidate the
leading place in the Northeast China
market. As for Tai’an, the cooperation is a
key to Shandong market, and FSY will
duplicate successful experiences around
the country.
Advantages of Environmentally Friendly Cremators Creating A New Path of Growth for Fu Shou Yuan
Anhui Zhongfude Environmentally Cremation Machine Factory Began Operation
The operation of the environmentally friendly cremator factory filled in the gap along Fu Shou Yuan’s industrial chain of
death care services. It will become a new source of revenue for the Company and enhancing its brand image while
improving its earnings.
Policy Supports from Government Tremendous Market Prospect
5
Compared to previous generations, our cremators save over
50% of fuel, and meet the emission criteria for cremation
exhaust set by the Ministry of Civil Affairs
By adding combustion chambers, the volume of hazardous
substance is reduced effectively, which helps to protect
operators
Design of the front hall is more civilized, humane and
automated, which makes the deceased more dignified and
helps comfort the relatives
• Over 2,700 funeral parlors, 70% of which are equipped with
cremators, among them each owns 4 cremators on average;
most of them are working at full capacity
• Average life span of a cremator is 6-10 years
• Over 200 funeral parlors are expected to be approved by the
government in the next 5 years, all of which will be equipped
with cremators
• Annual demand of at least 1,000 machines nationwide
• Cremation rate in China stands at 48.8% and it is expected to
rise
Fulfill its own demand
Improve resource allocation
Fill in the gap along the
supply chain
New source of revenue
Use cremators as an entry point
Invest into government-
owned funeral parlors
Operate funeral parlors in
collaboration with the government
• In 2010, Chinese government has released a regulation
about the limitation of cremation exhaust emissions in order
to eliminate gradually substandard cremation machines.
• This policy largely raises the environmental standards of
cremation machines, and upgrades the whole industry.
Recent Developments 26
Becoming a new source of revenue while completing Fu Shou
Yuan’s industrial chain
4. Future Strategy and Outlook
Continue to be a role model in the death care services
industry by setting industry best practices and
reinforcing Chinese tradition and cultural awareness
through our services
Vision: Beautiful farewell, life of happiness
Mission: Humanity and Culture
Philosophy: Innovation, Pragmatism, Peaceful Mind and
Sincerity
Responsibil it ies: Corporate Responsibil ity, Social
Responsibility, and Responsibility to the Industry and
History
Increase our market share by extending the provision of
both death care services to other locations in the PRC
Current land reserve sufficient for developmental demands
for at least 20 years forward
Current business coverage is focused on municipalities,
provincial capitals, special economic zones or cities with
demograph ic potent ia l and d is t inc t ive cu l tura l
characteristics
Growth Strategies
1 2
Shanghai
（Headquarter）
28 Future Strategy and Outlook
Expand our range of service offerings to cater to evolving
market demand
Fu Shou Yuan is currently discussing with governments,
insurers and other institutions on pre-need model.
Anhui Zhongfude Cremation Machine Factory is currently
under construction, and there are opportunities to tap into
the environment-friendly cremation machine market
Develop more unique and innovative services, such as
online service, video recording, and online live
broadcasting
Base on the internet to develop physical and virtual after-
burial services
Leverage our“Fu Shou Yuan” brand and leading market
position and further expand through acquisition,
collaboration and joint ventures
Connect the Fu Shou Yuan brand with high quality service
Expand geographical coverage via mergers and
acquisitions
Strengthen brand recognition; further market penetration
Growth Strategies (Cont’d)
3 4
Environmentally-
friendly Cremation
Machines
Pre-need Death
Care Service Plan
Burial and
funeral services
After-burial
services
29 Future Strategy and Outlook
Q&A
