[Executive Summary](index=1&type=section&id=Executive%20Summary) [2025 Interim Results Highlights](index=1&type=section&id=2025%20Interim%20Results%20Highlights) Fushouyuan International Group Co Ltd reported unaudited consolidated financial results for the six months ended June 30, 2025, with total revenue of approximately RMB 610.9 million, a 44.5% year-on-year decrease, and a loss attributable to owners of approximately RMB 261.4 million, resulting in a basic loss per share of RMB 11.5 cents, while the Board declared an interim dividend of HK 7.00 cents per share 2025 First Half Key Financial Summary | Indicator | Amount (RMB Million) | | :--- | :--- | | Total Revenue | 610.9 | | Loss Attributable to Owners of the Company | 261.4 | | Basic Loss Per Share | 11.5 cents | | Interim Dividend | HK 7.00 cents per share | - Total revenue decreased by approximately **44.5%** year-on-year[3](index=3&type=chunk) - Loss attributable to owners of the company was approximately **RMB 261.4 million**[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded total revenue of RMB 610,850 thousand, a significant decrease from RMB 1,099,991 thousand in the prior period, with operations shifting from profit to a total loss of RMB 263,873 thousand for the period, and a loss attributable to owners of the company of RMB 261,411 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 610,850 | 1,099,991 | | Operating (Loss) Profit | (229,249) | 512,237 | | (Loss) Profit Before Tax | (232,370) | 542,737 | | Income Tax Expense | (31,503) | (179,602) | | Total (Loss) Profit for the Period | (263,873) | 363,135 | | (Loss) Profit Attributable to Owners of the Company | (261,411) | 298,801 | | Basic (Loss) Earnings Per Share (RMB Cents) | (11.5) | 13.2 | - Impairment losses of **RMB 217,638 thousand** were recognized for property and equipment, intangible assets, cemetery assets, and goodwill, compared to zero in the prior period[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets decreased to RMB 7,238,279 thousand from RMB 8,181,197 thousand as of December 31, 2024, with reductions in both non-current and current assets, notably in financial assets at fair value through profit or loss and bank balances and cash, while net assets stood at RMB 4,865,631 thousand Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Assets | 4,390,160 | 4,624,213 | | Current Assets | 2,848,119 | 3,556,984 | | **Total Assets** | **7,238,279** | **8,181,197** | | Current Liabilities | 1,557,568 | 1,163,420 | | Non-current Liabilities | 815,080 | 861,949 | | **Total Liabilities** | **2,372,648** | **2,025,369** | | Net Assets | 4,865,631 | 6,155,828 | | Equity Attributable to Owners of the Company | 4,291,235 | 5,561,154 | | Non-controlling Interests | 574,396 | 594,674 | | **Total Equity** | **4,865,631** | **6,155,828** | - Goodwill decreased from **RMB 1,106,076 thousand** as of December 31, 2024, to **RMB 940,923 thousand** as of June 30, 2025, primarily due to impairment recognized during the period[6](index=6&type=chunk)[21](index=21&type=chunk) - Financial assets at fair value through profit or loss decreased from **RMB 589,176 thousand** as of December 31, 2024, to **RMB 311,892 thousand** as of June 30, 2025[6](index=6&type=chunk)[27](index=27&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=7&type=section&id=General%20Information) Fushouyuan International Group Co Ltd is incorporated in the Cayman Islands and listed on the Stock Exchange, with the Group primarily engaged in providing cemetery services, funeral services, and other related services - The company was incorporated in the Cayman Islands on January 5, 2012, and listed on the Stock Exchange on December 19, 2013[9](index=9&type=chunk) - The Group is primarily engaged in providing cemetery services, funeral services, and other services[9](index=9&type=chunk) [Application of New and Revised IFRSs](index=7&type=section&id=Application%20of%20New%20and%20Revised%20IFRSs) During the period, the Group first applied certain amendments to International Financial Reporting Standards that became mandatorily effective, which had no significant impact on the Group's financial position, performance, or disclosures in the condensed consolidated financial statements for the current and prior periods - The Group first applied certain amendments to International Financial Reporting Standards that became mandatorily effective during the period[10](index=10&type=chunk) - These amendments had no significant impact on the Group's financial position and performance and/or disclosures for the current and prior periods[10](index=10&type=chunk) [Significant Accounting Policies](index=7&type=section&id=Significant%20Accounting%20Policies) The consolidated financial statements are prepared on a historical cost basis and in accordance with accounting policies compliant with International Financial Reporting Standards, except for investment properties and certain financial instruments measured at fair value at each period end, with historical cost generally determined by the fair value of consideration received for goods exchanged and services rendered - The consolidated financial statements are prepared on a historical cost basis and in accordance with accounting policies compliant with International Financial Reporting Standards, except for investment properties and certain financial instruments[11](index=11&type=chunk) - Historical cost is generally determined by the fair value of consideration received for goods exchanged and services rendered[12](index=12&type=chunk) [Revenue Recognition](index=7&type=section&id=Revenue%20Recognition) Revenue is measured at the fair value of consideration received or receivable, with revenue from the sale of burial plots recognized when control is transferred, cemetery maintenance service revenue recognized over the service period based on estimated deferred income from expected costs plus reasonable profit, and funeral and other service revenue recognized when services are provided - Revenue from the sale of burial plots is recognized when control related to the burial plot is transferred to the customer[15](index=15&type=chunk) - Revenue from cemetery maintenance services is recognized over the service period, with deferred income calculated based on the expected cost of providing services plus a reasonable profit, less the total future maintenance fees to be collected[15](index=15&type=chunk) - Revenue from funeral and other services is recognized when the services are provided[16](index=16&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) The Group's revenue is derived from cemetery services, funeral services, and other services, with all service types experiencing a year-on-year decrease in revenue for the six months ended June 30, 2025, and a general decline across regions, where Shanghai contributed the most but saw a significant drop [Revenue by Service Type](index=8&type=section&id=Revenue%20by%20Service%20Type) For the six months ended June 30, 2025, cemetery services revenue was RMB 477,375 thousand, funeral services RMB 121,873 thousand, and other services RMB 14,628 thousand, with all service types experiencing a year-on-year decrease in revenue Revenue by Service Type (For the six months ended June 30) | Service Type | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cemetery Services | 477,375 | 906,082 | | Funeral Services | 121,873 | 184,083 | | Other Services | 14,628 | 15,059 | | Inter-segment Eliminations | (3,026) | (5,233) | | **Total** | **610,850** | **1,099,991** | - Cemetery services revenue decreased by **47.3%** year-on-year, and funeral services revenue decreased by **33.8%** year-on-year[17](index=17&type=chunk) [Revenue by Geographical Region](index=8&type=section&id=Revenue%20by%20Geographical%20Region) For the six months ended June 30, 2025, the Shanghai region contributed 40.2% of the Group's total revenue but saw a significant year-on-year decrease, with major regions like Liaoning, Anhui, and Henan also experiencing general revenue declines, and Fujian having no revenue due to a subsidiary no longer being consolidated Revenue by Geographical Region (For the six months ended June 30) | Region | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Shanghai | 240,970 | 526,143 | | Liaoning | 65,607 | 69,766 | | Anhui | 63,662 | 87,739 | | Henan | 33,165 | 68,805 | | Jiangxi | 32,489 | 46,154 | | Jiangsu | 32,059 | 52,524 | | Shandong | 27,736 | 44,558 | | Zhejiang | 22,632 | 25,354 | | Chongqing | 20,330 | 37,787 | | Heilongjiang | 17,995 | 42,568 | | Guizhou | 14,667 | 23,604 | | Gansu | 12,010 | 13,821 | | Inner Mongolia | 6,761 | 9,332 | | Guangxi | 6,584 | 8,980 | | Shaanxi | 2,300 | 1,530 | | Hubei | 281 | 814 | | Fujian | — | 30,686 | | **Total** | **599,248** | **1,090,165** | - Shanghai region revenue decreased by **54.2%** year-on-year, with its proportion of total revenue falling from **48.3%** to **40.2%**[18](index=18&type=chunk) - Fujian region had no revenue in the current period because a funeral subsidiary is no longer included in the Group's consolidated financial statements[18](index=18&type=chunk) [Loss Before Tax](index=9&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, the loss before tax was RMB 232,370 thousand, compared to a profit of RMB 542,737 thousand in the prior period, primarily impacted by factors such as staff costs, depreciation and amortization, and amortization of cemetery assets Loss Before Tax Components (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Staff Costs | 180,310 | 255,647 | | Depreciation of Property and Equipment | 28,395 | 25,992 | | Amortization of Right-of-use Assets | 11,032 | 12,060 | | Amortization of Intangible Assets | 12,578 | 11,475 | | Amortization of Cemetery Assets | 35,813 | 40,043 | - Total staff costs decreased by **29.5%** year-on-year to **RMB 180,310 thousand**[19](index=19&type=chunk) [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was RMB 31,503 thousand, a significant decrease from RMB 179,602 thousand in the prior period, mainly due to reduced taxable income and changes in deferred tax during the period Income Tax Expense (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | China Corporate Income Tax (Current Period) | 52,612 | 162,288 | | Under-provision in Prior Years | 617 | 162 | | Deferred Tax | (21,726) | 17,152 | | **Total** | **31,503** | **179,602** | - Income tax expense decreased by **82.5%** year-on-year[19](index=19&type=chunk) [Loss Per Share](index=10&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share was RMB 11.5 cents, compared to basic earnings per share of RMB 13.2 cents in the prior period Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (RMB Thousand/Cents) | 2024 (RMB Thousand/Cents) | | :--- | :--- | :--- | | (Loss) Profit for Calculating Basic (Loss) Earnings Per Share | (261,411) | 298,801 | | Weighted Average Number of Ordinary Shares | 2,271,063,422 | 2,271,063,422 | | Basic (Loss) Earnings Per Share | (11.5) cents | 13.2 cents | [Property and Equipment](index=10&type=section&id=Property%20and%20Equipment) As of June 30, 2025, the carrying value of property and equipment was RMB 571,235 thousand, a slight increase from RMB 565,676 thousand as of December 31, 2024, with construction in progress growing but impairment provisions also increasing Property and Equipment (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Buildings | 342,106 | 350,464 | | Construction in Progress | 172,097 | 142,867 | | Impairment Provision | (9,315) | (1,306) | | **Total** | **571,235** | **565,676** | - Construction in progress increased by **RMB 29,230 thousand**, and impairment provision increased by **RMB 8,009 thousand**[20](index=20&type=chunk) [Goodwill](index=11&type=section&id=Goodwill) As of June 30, 2025, the carrying value of goodwill was RMB 940,923 thousand, a decrease of RMB 165,153 thousand from the beginning of the year, primarily due to goodwill impairment recognized during the period Goodwill Movement (As of June 30) | Indicator | Amount (RMB Thousand) | | :--- | :--- | | January 1, 2025 (Audited) | 1,106,076 | | Less: Goodwill Impairment Recognized During the Period | 165,153 | | **June 30, 2025 (Unaudited)** | **940,923** | - Goodwill impairment of **RMB 165,153 thousand** was recognized during the period[21](index=21&type=chunk) [Cemetery Assets](index=11&type=section&id=Cemetery%20Assets) As of June 30, 2025, total cemetery assets were RMB 1,922,097 thousand, a decrease from December 31, 2024, primarily due to impairment provisions, with land costs, landscaping facilities, and development costs all amortized on a straight-line basis Cemetery Assets (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Land Costs | 1,350,007 | 1,374,151 | | Landscaping Facilities | 254,418 | 255,951 | | Development Costs | 397,776 | 401,444 | | Impairment Provision | (80,104) | (36,137) | | **Total** | **1,922,097** | **1,995,409** | - Impairment provision increased by **RMB 43,967 thousand**[21](index=21&type=chunk) - Land costs, landscaping facilities, and development costs are all amortized using the straight-line method[21](index=21&type=chunk)[22](index=22&type=chunk) [Inventories](index=12&type=section&id=Inventories) As of June 30, 2025, total inventories amounted to RMB 558,421 thousand, primarily comprising burial plots, gravestones, and other items, representing a slight decrease from December 31, 2024 Inventories (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Burial Plots | 441,247 | 450,015 | | Gravestones | 80,508 | 86,983 | | Other | 36,666 | 39,328 | | **Total** | **558,421** | **576,326** | - Total inventories decreased by **RMB 17,905 thousand** year-on-year[24](index=24&type=chunk) [Trade and Other Receivables](index=12&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables totaled RMB 144,049 thousand, an increase from December 31, 2024, with trade receivables net of credit loss provisions amounting to RMB 91,258 thousand Trade and Other Receivables (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables (Net of Provision) | 91,258 | 98,215 | | Prepayments for Land | 10,525 | — | | **Total** | **144,049** | **132,922** | Trade Receivables Aging Analysis (As of June 30) | Aging | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 Year | 32,006 | 42,459 | | Over 1 Year but Less Than 2 Years | 28,752 | 34,166 | | Over 2 Years but Less Than 3 Years | 21,272 | 10,537 | | Over 3 Years but Less Than 4 Years | 3,899 | 10,427 | | Over 4 Years but Less Than 5 Years | 5,329 | 626 | | **Total** | **91,258** | **98,215** | - Provision for credit losses on trade receivables increased from **RMB 27,002 thousand** as of December 31, 2024, to **RMB 29,686 thousand** as of June 30, 2025[24](index=24&type=chunk) [Bank Balances and Cash](index=13&type=section&id=Bank%20Balances%20and%20Cash) As of June 30, 2025, bank balances and cash amounted to RMB 1,622,742 thousand, a significant decrease from RMB 2,056,626 thousand as of December 31, 2024, primarily denominated in RMB, with holdings in HKD, USD, and JPY Bank Balances and Cash (As of June 30) | Currency | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | HKD | 314,976 | 560,431 | | USD | 895 | 7,886 | | JPY | 6,319 | — | | **Total Non-RMB Currencies** | **322,190** | **568,317** | Bank Balances Annual Interest Rates (As of June 30) | Currency | 2025 | 2024 | | :--- | :--- | :--- | | RMB | 0.05%–1.35% | 0.10%–1.35% | | HKD | 0.01%–3.60% | 0.01%–3.74% | | USD | 0.05% | 0.05% | | JPY | 0.0001% | — | - Total bank balances and cash decreased by **RMB 433,884 thousand** year-on-year[6](index=6&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=14&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, total financial assets at fair value through profit or loss amounted to RMB 311,892 thousand, a significant decrease from RMB 589,176 thousand as of December 31, 2024, primarily consisting of cash management products with portfolios including government debt instruments, treasury bonds, and corporate bonds Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Structured Deposits and Cash Management Products | 311,892 | 589,176 | | **Total** | **311,892** | **589,176** | Cash Management Product Details (As of June 30, 2025) | Bank | Product Name | Currency | Amount (RMB Thousand) | Term/Redemption Time | Expected Yield | Principal Guaranteed | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Pudong Development Bank | Tian Tian Li Pu Hui Plan | RMB | 2,505 | Redeemable after 1 business day | 1.25% | N | | Shanghai Pudong Development Bank | Tian Tian Li Pu Tian Tong Ying No. 1 | RMB | 548 | Redeemable after 1 business day | 1.28% | N | | Shanghai Rural Commercial Bank | Corporate Quarterly Jinli 3-Month Fixed Open | RMB | 35,147 | Redeemable after 90 business days | 2.00%~2.80% | N | | Shanghai Rural Commercial Bank | Suyin Wealth Qiyuan Cash No. 1F | RMB | 70,034 | Redeemable after 1 business day | 1.38% | N | | Industrial Bank | Xingyin Wealth Tianli Kuaixian F | RMB | 40,371 | Redeemable after 1 business day | 1.87% | N | | China Construction Bank | Hengying (Corporate Version) | RMB | 142,878 | Redeemable after 1 business day | 1.44% | N | | China Construction Bank | Jiaxin Fixed Income Daily | RMB | 20,409 | Redeemable after 1 business day | 1.68% | N | | **Total** | | **RMB** | **311,892** | | | | - These product portfolios include government debt instruments, treasury bonds, and corporate bonds[29](index=29&type=chunk) [Time Deposits](index=15&type=section&id=Time%20Deposits) As of June 30, 2025, time deposits amounted to RMB 381,824 thousand, a slight decrease from RMB 396,008 thousand as of December 31, 2024, with deposit terms ranging from three months to three years and fixed annual interest rates between 1.15% and 4.13% Time Deposits (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Time Deposits | 381,824 | 396,008 | - Time deposit terms range from three months to three years, with fixed annual interest rates between **1.15% and 4.13%** (December 31, 2024: 1.60% to 4.43%)[31](index=31&type=chunk) [Trade and Other Payables](index=15&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 864,674 thousand, an increase from RMB 667,564 thousand as of December 31, 2024, with trade payables accounting for RMB 300,124 thousand Trade and Other Payables (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Payables | 300,124 | 319,760 | | Customer Prepayments | 23,047 | 17,829 | | Accrued Wages, Benefits, and Bonuses | 49,923 | 130,860 | | Other Accrued Expenses | 34,443 | 25,721 | | Consideration Payable for Acquisition of Subsidiaries | 21,741 | 22,217 | | Other | 435,396 | 151,177 | | **Total** | **864,674** | **667,564** | Trade Payables Aging Analysis (As of June 30) | Aging | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | 0 to 90 Days | 59,808 | 75,060 | | 91 to 180 Days | 22,948 | 22,450 | | 181 to 365 Days | 33,762 | 48,263 | | Over 365 Days | 183,606 | 173,987 | | **Total** | **300,124** | **319,760** | - The "Other" category within other payables significantly increased from **RMB 151,177 thousand** as of December 31, 2024, to **RMB 435,396 thousand** as of June 30, 2025[32](index=32&type=chunk) [Contract Liabilities](index=16&type=section&id=Contract%20Liabilities) As of June 30, 2025, total contract liabilities amounted to RMB 629,655 thousand, primarily comprising liabilities related to cemetery maintenance services and pre-need contract sales Contract Liabilities (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cemetery Maintenance Services | 579,839 | 585,101 | | Pre-need Contract Sales | 49,816 | 52,542 | | **Total** | **629,655** | **637,643** | [Cemetery Maintenance Services](index=16&type=section&id=Cemetery%20Maintenance%20Services) Contract liabilities for cemetery maintenance services represent the unearned portion of revenue in accordance with revenue recognition policies, where customers typically prepay 10 to 20 years of maintenance fees, and the Group estimates deferred income based on expected costs plus a reasonable profit - Contract liabilities for cemetery maintenance services represent the portion of revenue from providing cemetery services not yet earned as revenue[35](index=35&type=chunk) - Customers are required to prepay 10 to 20 years of maintenance fees, and deferred income is calculated based on the expected cost of providing services plus a reasonable profit, less the total future maintenance fees to be collected[36](index=36&type=chunk) [Pre-need Contract Sales](index=16&type=section&id=Pre-need%20Contract%20Sales) Pre-need contract sales refer to funeral services sold based on pre-death contracts, where payment occurs at the time of contract signing, and contract liabilities persist until the funeral services are provided and revenue is recognized - Pre-need contract sales refer to funeral services sold based on pre-death contracts[37](index=37&type=chunk) - Contract liabilities will be recognized at the inception of the contract until revenue is recognized upon the provision of funeral services[37](index=37&type=chunk) [Deferred Tax](index=17&type=section&id=Deferred%20Tax) As of June 30, 2025, total deferred tax assets (liabilities) amounted to RMB (8,214) thousand, an improvement from RMB (29,940) thousand as of December 31, 2024, primarily influenced by contract liabilities, loss provisions, and fair value adjustments Deferred Tax Assets (Liabilities) (As of June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Contract Liabilities | 79,532 | 80,531 | | Loss Provisions | 17,808 | 17,137 | | Withholding Income Tax on China-sourced Income | (17,967) | (30,087) | | Unused Deductible Tax Losses | 9,776 | 4,672 | | Fair Value Adjustments | (111,334) | (118,799) | | Right-of-use Assets | (27,047) | (30,489) | | Lease Liabilities | 25,944 | 31,705 | | Cemetery Assets | 15,074 | 15,390 | | **Total** | **(8,214)** | **(29,940)** | - Total deferred tax assets (liabilities) significantly improved from a negative value, primarily influenced by fair value adjustments and changes in withholding income tax on China-sourced income[38](index=38&type=chunk) [Dividends_Note](index=17&type=section&id=Dividends_Note) The Board declared a special dividend of HK 38.82 cents per share on January 24, 2025, with the first tranche of HK 17.24 cents already paid, and also declared and paid a final dividend of HK 9.54 cents per share for 2024, totaling approximately RMB 573.4 million, while an interim dividend of HK 7.00 cents per share for the six months ended June 30, 2025, was declared on August 29, 2025 - A special dividend of **HK 38.82 cents per share** was declared on January 24, 2025, with the first tranche of **HK 17.24 cents** already paid[39](index=39&type=chunk) - The 2024 final dividend of **HK 9.54 cents per share** was declared and paid, totaling approximately **RMB 573.4 million**[39](index=39&type=chunk) - An interim dividend of **HK 7.00 cents per share** for the six months ended June 30, 2025, was declared on August 29, 2025[39](index=39&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) [Chairman's Statement](index=18&type=section&id=Chairman's%20Statement) Chairman Mr. Bai Xiaojiang reviewed the Group's performance for the first half of 2025, noting that despite global economic challenges, the Chinese economy showed resilience and demand for life services steadily increased, with the Group adhering to innovation-driven and high-quality development, advancing digital transformation, and achieving significant accomplishments in ESG, brand building, and public welfare - The Chinese economy continued its recovery amidst multiple challenges, with accelerating population aging and steadily increasing demand for life services[40](index=40&type=chunk) - The Group adheres to innovation-driven and high-quality development, upholding the "3JI" philosophy of "making marks beautiful, making records profound, and making memorials lasting"[40](index=40&type=chunk) [Group Performance and Dividend Distribution](index=18&type=section&id=Group%20Performance%20and%20Dividend%20Distribution) For the six months ended June 30, 2025, the Group recorded revenue of RMB 610.9 million and a loss attributable to owners of RMB 261.4 million, with the Board proposing an interim dividend of HK 7.00 cents per share to shareholders, consistent with the Group's stable and sustainable dividend policy 2025 First Half Group Performance | Indicator | Amount (RMB Million) | | :--- | :--- | | Revenue | 610.9 | | Loss Attributable to Owners of the Company | 261.4 | - The Board proposes to distribute a 2025 interim dividend of **HK 7.00 cents per share** to thank shareholders for their long-term support and trust[41](index=41&type=chunk) [Brand Building and Social Responsibility](index=19&type=section&id=Brand%20Building%20and%20Social%20Responsibility) Fushouyuan was awarded the "Annual Responsible Brand Award" at the 14th Public Welfare Festival, was shortlisted for the "2024 World Innovative Brands 500" list at the Davos World Brand Summit with a brand value of USD 2.916 billion, ranking 380th, and Shanghai Fushouyuan consecutively won the "National Civilized Unit" honor for three terms - Awarded the "Annual Responsible Brand Award" at the 14th Public Welfare Festival[42](index=42&type=chunk) - Shortlisted for the "2024 World Innovative Brands 500" at the Davos World Brand Summit, with a brand value of **USD 2.916 billion**, ranking **380th**[42](index=42&type=chunk) - Shanghai Fushouyuan consecutively won the "National Civilized Unit" honor for three terms[42](index=42&type=chunk) [ESG and Digital Transformation](index=19&type=section&id=ESG%20and%20Digital%20Transformation) Fushouyuan achieved significant progress in ESG, with its MSCI rating upgraded from AA to the highest AAA level, and was included in the Hang Seng Corporate Sustainability Benchmark Index for four consecutive years, maintaining an A+ rating, while actively promoting digital transformation to form a preliminary digital life service system, launching innovative services such as AI memorial and digital mourning halls - MSCI rating upgraded from **AA to the highest AAA level**, entering the top 1% of the MSCI China Investable Market Index constituents[43](index=43&type=chunk) - Included in the Hang Seng Corporate Sustainability Benchmark Index for four consecutive years, with the latest score increasing to **65.20 points**, maintaining an **A+ rating**[43](index=43&type=chunk) - A preliminary digital life service system has been formed, covering all scenario needs through four core functions: digital mourning halls, AI memorial, Fushou Online, and Memorial Home Yuan[43](index=43&type=chunk) [Public Welfare and Future Outlook](index=20&type=section&id=Public%20Welfare%20and%20Future%20Outlook) Fushouyuan actively participates in life education and public welfare, supporting the "2025 National Human Organ Donation Memorial Event" and continuously carrying out multiple public welfare projects, while looking ahead, the Group will continue to enhance corporate governance, advance sustainable development strategies, innovate service models, and fulfill corporate social responsibility - Supported the "2025 National Human Organ Donation Memorial Event" and continuously carried out multiple public welfare projects such as poverty alleviation, assistance to the needy, elderly care, orphan relief, and preferential treatment for beneficiaries[44](index=44&type=chunk) - Looking ahead, the Group will continue to enhance corporate governance, firmly advance sustainable development strategies, and promote low-carbon, low-energy consumption, and efficient operations[44](index=44&type=chunk) - Adhering to the principle of "respecting life and warming hearts," the Group will continue to promote digital transformation through the corporate spirit of "innovation, responsibility, and win-win"[44](index=44&type=chunk) [Market Overview](index=21&type=section&id=Market%20Overview) The Chinese funeral industry faces vast and continuously growing market demand driven by new urbanization, accelerating population aging, and increasing cremation rates, with macro-economic policies stimulating service consumption potential, but a complex external environment and cautious consumer spending, while improving funeral policies and regulations promote industry standardization and modernization, making technology-enabled and digital transformation key directions - The acceleration and synergy of new urbanization, population aging trends, and increasing cremation rates will continuously generate vast demand for funeral services[47](index=47&type=chunk) - In the first half of 2025, GDP grew by **5.3%** year-on-year, urban residents' per capita disposable income increased by **4.7%** in real terms, and service consumption expenditure grew by **4.9%**[48](index=48&type=chunk) - The revision of the "Regulations on Funeral and Interment Management (Draft for Public Comment)" and related management measures will deepen funeral reform and improve the funeral service system[49](index=49&type=chunk)[50](index=50&type=chunk) - Online memorial services have become an important way for people to express their grief, and the internet is driving the transformation and upgrading of the funeral industry from traditional to modern[51](index=51&type=chunk) [Industry Development Trends](index=21&type=section&id=Industry%20Development%20Trends) The Chinese funeral industry is experiencing trends of new urbanization, accelerating population aging, and continuously increasing cremation rates, which collectively drive the growth and deepening development of demand for funeral services - By the end of 2024, China's urban permanent population reached **943.5 million**, with an urbanization rate of **67.0%**[47](index=47&type=chunk) - By the end of 2024, the population aged 60 and above was **310.31 million**, accounting for **22.0%**, and is expected to exceed **400 million** by 2035[47](index=47&type=chunk) - In 2021, **5.966 million** bodies were cremated nationwide, with a cremation rate of **58.8%**[47](index=47&type=chunk) [Economic Environment and Consumer Behavior](index=22&type=section&id=Economic%20Environment%20and%20Consumer%20Behavior) In the first half of 2025, China's economy started steadily with GDP growing by 5.3% year-on-year, and both resident income and consumption expenditure saw real growth, indicating huge potential for service consumption, yet the complex external environment and insufficient domestic demand growth momentum, coupled with residents' cautious spending, led to more prudent consumer behavior in funeral scenarios 2025 First Half Macroeconomic Data | Indicator | Amount/Growth Rate | | :--- | :--- | | Gross Domestic Product | RMB 66,053.6 billion (5.3% year-on-year growth) | | Per Capita Disposable Income of Urban Residents | RMB 28,844 (4.7% real growth) | | Per Capita Consumption Expenditure of Urban Residents | RMB 17,545 (4.6% real growth) | | National Per Capita Service Consumption Expenditure | RMB 6,504 (4.9% growth) | - Service consumption expenditure accounted for **45.5%** of residents' total consumption expenditure, indicating that service consumption is a crucial area for future consumption growth[48](index=48&type=chunk) - The current external environment remains complex and severe, with insufficient domestic demand growth momentum and residents' consumption capacity needing further improvement, leading to cautious customer consumption behavior in funeral scenarios[48](index=48&type=chunk)[53](index=53&type=chunk) [Policies and Regulations](index=22&type=section&id=Policies%20and%20Regulations) China's funeral sector continues to deepen reform and innovation, with the Ministry of Civil Affairs issuing the "Regulations on Funeral and Interment Management (Draft for Public Comment)" and the "Ministry of Civil Affairs 2025 Legislative Work Plan" to strengthen public welfare attributes, improve management systems, and regulate industry practices, while also releasing multiple recommended industry standards to enhance service supply and promote healthy industry development - The Ministry of Civil Affairs issued the "Regulations on Funeral and Interment Management (Draft for Public Comment)," primarily making revisions in strengthening public welfare attributes, improving institutional mechanisms, and perfecting service management systems[49](index=49&type=chunk) - The "Ministry of Civil Affairs 2025 Legislative Work Plan" explicitly included the revision of the "Regulations on Funeral and Interment Management," "Interim Measures for Cemetery Management," and the formulation of "Measures for Funeral Home Management" in its legislative plan[50](index=50&type=chunk) - The Ministry of Civil Affairs issued 10 recommended industry standards, including the "Funeral Reception Service Standards," effective immediately, aiming to enhance service supply and strengthen supervision and management[50](index=50&type=chunk) [Technology in Funeral Services and Digital Transformation](index=24&type=section&id=Technology%20in%20Funeral%20Services%20and%20Digital%20Transformation) The Ministry of Civil Affairs issued the "14th Five-Year Plan for Civil Affairs Informatization Development" to promote the construction of a national integrated funeral management and service information platform, enhancing informatization levels, with online memorial services becoming an important method, and the internet driving the transformation and upgrading of the funeral industry from traditional to modern, making technology-enabled funeral services a future development direction - The Ministry of Civil Affairs issued the "14th Five-Year Plan for Civil Affairs Informatization Development," aiming to build a national integrated funeral management and service information platform to enhance informatization levels[51](index=51&type=chunk) - During the 2025 Qingming Festival holiday, a total of **1,576** online memorial platforms were opened nationwide, serving approximately **927,500** online memorial customers[51](index=51&type=chunk) - "Using scientific and technological thinking and methods to give the deceased more dignity, and enhancing funeral services with modern technology to make them more humane and high-end" will be the future direction of the funeral industry[51](index=51&type=chunk) [Industry Drivers and Development Potential](index=24&type=section&id=Industry%20Drivers%20and%20Development%20Potential) The development of China's funeral industry is driven by multiple factors including increasing per capita disposable income, promotion of traditional culture, urbanization, population aging, and rising cremation rates, which not only increase the total demand for services but also raise requirements for service quality and diversification, signaling a deepening and stable development of the industry - Factors such as increasing per capita disposable income, promotion of traditional Chinese culture, urbanization, population aging trends, and rising cremation rates collectively drive the development of the funeral industry[52](index=52&type=chunk) - The increase in public demand for funeral services is more reflected in the demand for improved service quality and diversified, differentiated service content[52](index=52&type=chunk) - The funeral industry will gradually integrate into the overall planning for the development of the aging care sector, coordinating its development with various "elderly-serving" industries[52](index=52&type=chunk) [Business Review and Strategy](index=25&type=section&id=Business%20Review%20and%20Strategy) Facing changes in the economic environment and customer consumption behavior, the Group focuses on both market and product dimensions, enhancing core competitiveness through service extension, technological leadership, and cultural innovation, developing multi-price point products and deepening digital strategy in cemetery business, focusing on digital transformation and venue upgrades in funeral business, expanding the pre-need contract market through service content enhancement and cross-industry cooperation, and optimizing product performance and expanding overseas markets for eco-friendly cremator business, while continuously advancing market expansion and talent development, and leveraging Liji College's role in industry education and policy research - The Group continuously focuses on both market and product dimensions, making efforts in service extension, technological leadership, and cultural innovation, implementing tailored strategies for each "park" to meet diverse and differentiated customer needs[53](index=53&type=chunk) - The Group's business has entered **40+ cities** in **19 provinces, autonomous regions, and municipalities**, including Shanghai, Henan, and Chongqing, and is steadily advancing expansion plans in other important provinces' capital cities and key blank areas nationwide[60](index=60&type=chunk) - Liji College hosted the "2025 Cemetery Operations Management Professional Training" and "International Respectful Body Aesthetics (Embalming) Training," and participated in drafting the "Standards for Construction and Service of Public Welfare Burial (Placement) Facilities in Pudong New Area, Shanghai"[61](index=61&type=chunk) [Cemetery Services](index=25&type=section&id=Cemetery%20Services) In the cemetery business, the Group develops more price-range burial plot products to increase market share, fully upgrades the cemetery business system and seamlessly integrates with the "Fushouyuan Service Online" mini-program to enhance customer convenience for online transactions, and intensifies R&D efforts for ecological, land-saving, and artistic products, incorporating digital technology and applying innovative services such as AI memorial videos and digital mourning halls - Developed more price-range burial plot product categories, targeting a broader and growing customer base, with a long-term focus on increasing market share[54](index=54&type=chunk) - All cemeteries have completed a comprehensive upgrade of their business systems and seamlessly integrated with the "Fushouyuan Service Online" mini-program, enhancing the efficiency of customer information digital management and the convenience of online transactions[54](index=54&type=chunk) - Increased R&D efforts for ecological, land-saving, and artistic products, incorporating digital technology, and applying innovative services such as AI memorial videos and digital mourning halls[54](index=54&type=chunk)[55](index=55&type=chunk) [Funeral Services](index=26&type=section&id=Funeral%20Services) Funeral services focus on digital transformation, sales process optimization, and venue upgrades, with AI memorial services as the core product, leveraging technology to redefine the service experience, significantly enhancing "animated old photos" and "digital human replication of the deceased's voice and appearance" functions, while comprehensively upgrading Chongqing Yuzhong Anletang to create the Anle Life Memorial Hall, introducing digital human imaging technology and a life public welfare cafe - With AI memorial services as the core product, the Group redefines the service experience through technology empowerment, significantly enhancing the "animated old photos" and "digital human replication of the deceased's voice and appearance" functions[56](index=56&type=chunk) - Chongqing Yuzhong Anletang underwent a comprehensive upgrade to create the Anle Life Memorial Hall, establishing **8 digital mourning halls** and introducing digital human imaging technology and a life public welfare cafe[56](index=56&type=chunk) [Design Segment](index=26&type=section&id=Design%20Segment) The Group's design segment, through its wholly-owned subsidiary Tianquan Jiajing, focuses on research and planning design under new funeral circumstances, emphasizing the integration of ecology, intelligence, and humanity, and developing low-cost strategies for funeral facility design, construction, and maintenance models - Tianquan Jiajing focuses on research and planning design under new funeral circumstances, emphasizing the integration of ecology, intelligence, and humanity[57](index=57&type=chunk) - Developed low-cost strategies for funeral facility design, construction, and maintenance models that align with social civilization development and modern intelligent memorial needs[57](index=57&type=chunk) [Pre-need Contract Business](index=27&type=section&id=Pre-need%20Contract%20Business) The pre-need contract business aims to provide life planning advice and end-of-life management solutions to the public, helping the Group secure customers early, with 10,252 contracts signed during the period, and the Group focusing on designing integrated multi-professional support services such as palliative care, grief counseling, and emotional intervention, while promoting comprehensive cooperation with insurance companies - During the period, a total of **10,252** pre-need contracts were signed (2024 prior period: 11,923 contracts)[58](index=58&type=chunk) - Focused on designing integrated pre-need contracts that combine multi-professional support services such as palliative care, grief counseling, and emotional intervention[58](index=58&type=chunk) - Continued to promote comprehensive and multi-type cooperation with insurance companies, aiming to achieve business growth and rapid market expansion through cross-industry collaboration[58](index=58&type=chunk) [Eco-friendly Cremator Business](index=27&type=section&id=Eco-friendly%20Cremator%20Business) The Group's eco-friendly cremator business integrates R&D, independent production, comprehensive support, and after-sales services, with the Group continuously optimizing product performance and production processes, strengthening customer after-sales service, actively maintaining domestic and international customers, expanding into new overseas markets, and continuously conducting data statistical analysis and verification of equipment to optimize adjustments for reducing cremation time and fuel consumption - Continuously optimized product performance and production processes, with a focus on strengthening customer after-sales service to further enhance customer experience and product quality[59](index=59&type=chunk) - Actively maintained domestic and international customers, expanded into new overseas markets, and provided good pre-sales technical support and after-sales maintenance services[59](index=59&type=chunk) - Continuously conducted data statistical analysis and verification of various flat-plate furnaces, ash collection furnaces, and exhaust gas purification system equipment, constantly optimizing adjustments to further reduce cremation time and fuel consumption[59](index=59&type=chunk) [Market Expansion and Talent Development](index=28&type=section&id=Market%20Expansion%20and%20Talent%20Development) The Group's business has entered over 40 cities in 19 provinces, autonomous regions, and municipalities, and is steadily advancing expansion plans in other important provinces, while highly valuing organizational vitality and talent development, actively building multi-channel development models for employees and innovative organizational incentive mechanisms, introducing group-wide management support systems, improving management and professional promotion pathways, and establishing organizational performance and labor cost control early warning mechanisms - The Group's business has entered **40+ cities** in **19 provinces, autonomous regions, and municipalities**, including Shanghai, Henan, and Chongqing[60](index=60&type=chunk) - Steadily advancing expansion plans in capital cities of other important provinces and key blank areas nationwide[60](index=60&type=chunk) - Introduced a group-wide management support system, improved both management and professional promotion pathways, and established organizational performance and labor cost control early warning mechanisms[60](index=60&type=chunk) [Liji College and Industry Education](index=28&type=section&id=Liji%20College%20and%20Industry%20Education) Liji College, a corporate vocational education institution for the funeral industry and a core member of the National Funeral Industry Production-Education Integration Community, hosted the "2025 Cemetery Operations Management Professional Training" and "International Respectful Body Aesthetics (Embalming) Training," and actively participated in industry exchanges and policy research, co-drafting the "Standards for Construction and Service of Public Welfare Burial (Placement) Facilities in Pudong New Area, Shanghai" - Liji College hosted the "2025 Cemetery Operations Management Professional Training" and "International Respectful Body Aesthetics (Embalming) Training"[61](index=61&type=chunk) - Co-participated in drafting and releasing the district standard for the "Standards for Construction and Service of Public Welfare Burial (Placement) Facilities in Pudong New Area, Shanghai"[61](index=61&type=chunk) [Brand Culture and Social Influence](index=29&type=section&id=Brand%20Culture%20and%20Social%20Influence) The Group continues to uphold its corporate mission of "people-oriented, culture-rooted," transforming from a traditional funeral service provider to a comprehensive funeral and life technology service provider, with "Fushouyuan" related information across the entire network totaling 23,295 entries during the 2025 Qingming Festival, an 18% year-on-year increase, widely recognized for its digital exploration and innovative civilized memorial initiatives, and receiving multiple accolades in public welfare, media communication, brand development, and spiritual civilization construction - The Group transformed from a traditional funeral service provider to a comprehensive funeral and life technology service provider, evolving from the physical "Fushouyuan" to the spiritual "Fushouyuan"[62](index=62&type=chunk) - During the 2025 Qingming Festival, "Fushouyuan" related information across the entire network totaled **23,295 entries**, an **18%** year-on-year increase, with total online coverage, positive coverage, and central media coverage all reaching new highs[62](index=62&type=chunk) - Received the "Annual Responsible Brand Award" at the 14th Public Welfare Festival, the Excellent Work Award in the "Civil Affairs China" section of the 15th Beijing International Film Festival Short Video Unit, and Shanghai Fushouyuan consecutively won the "National Civilized Unit" honorary title for three terms[62](index=62&type=chunk) [Financial Performance Analysis](index=30&type=section&id=Financial%20Performance%20Analysis) In the first half of 2025, the Group's total revenue decreased by 44.5% year-on-year to RMB 610.9 million, with a loss attributable to owners of RMB 261.4 million, a 187.5% year-on-year decrease, primarily due to reduced cemetery and funeral service volumes, lower average selling prices, and the deconsolidation of some subsidiaries, while operating expenses increased due to higher asset impairment and bad debt provisions, leading to a shift from operating profit to loss, and although income tax expense significantly decreased, it could not offset the operating loss 2025 First Half Key Financial Performance | Indicator | 2025 First Half (RMB Million) | 2024 First Half (RMB Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 610.9 | 1,100.0 | -44.5% | | Loss Attributable to Owners of the Company | 261.4 | 298.8 (Profit) | -187.5% | - Operating expenses increased by **RMB 252.3 million** or **42.9%**, primarily due to an increase of **RMB 206.0 million** in asset impairment and bad debt provisions, which includes **RMB 217.6 million** in impairment losses for property and equipment, intangible assets, cemetery assets, and goodwill[77](index=77&type=chunk)[80](index=80&type=chunk) - Income tax expense was **RMB 31.5 million**, a year-on-year decrease of **82.5%**, mainly due to reduced taxable income and a decrease in the withholding income tax rate to **5%** for intra-group dividends from domestic to offshore holding companies, in compliance with double taxation agreements[86](index=86&type=chunk) [Overall Performance Overview](index=30&type=section&id=Overall%20Performance%20Overview) In the first half of 2025, the Group's total revenue reached RMB 610.9 million, a 44.5% decrease from the prior period, and the loss attributable to owners of the company was RMB 261.4 million, a 187.5% decrease from the profit in the prior period - Total revenue reached **RMB 610.9 million**, a decrease of approximately **44.5%** from the prior period[63](index=63&type=chunk) - Loss attributable to owners of the company was **RMB 261.4 million**, a decrease of approximately **187.5%** from the profit attributable in the prior period[63](index=63&type=chunk) [Revenue Analysis](index=30&type=section&id=Revenue%20Analysis) During the period, the Group's total revenue decreased by RMB 489.1 million or 44.5%, primarily across the three major business segments of cemetery services, funeral services, and other services, with all segments experiencing year-on-year revenue declines, and cemetery services showing the largest decrease, while the Shanghai region contributed the most revenue but also saw a significant drop - Total revenue decreased by **RMB 489.1 million** or **44.5%**, from **RMB 1,100.0 million** in the prior period to **RMB 610.9 million**[64](index=64&type=chunk) [Revenue by Business Segment](index=30&type=section&id=Revenue%20by%20Business%20Segment) In the first half of 2025, cemetery services accounted for 78.1% of revenue, funeral services for 20.0%, and other services for 2.4%, with all business segments experiencing year-on-year revenue declines, and cemetery services showing the largest decrease Revenue by Business Segment (For the six months ended June 30) | Business Segment | 2025 Revenue (RMB Thousand) | 2025 Share (%) | 2024 Revenue (RMB Thousand) | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Cemetery Services | 477,375 | 78.1% | 906,082 | 82.4% | | Funeral Services | 121,873 | 20.0% | 184,083 | 16.7% | | Other Services | 14,628 | 2.4% | 15,059 | 1.4% | | Inter-segment Eliminations | (3,026) | (0.5%) | (5,233) | (0.5%) | | **Total** | **610,850** | **100.0%** | **1,099,991** | **100.0%** | - Cemetery services revenue decreased by **47.3%** year-on-year, and funeral services revenue decreased by **33.8%** year-on-year[64](index=64&type=chunk) [Cemetery Services Revenue](index=31&type=section&id=Cemetery%20Services%20Revenue) Cemetery services revenue decreased by 47.3% year-on-year to RMB 477,375 thousand, with operating burial plot sales service revenue declining by 51.0%, sales volume decreasing by 6.7%, and average selling price decreasing by 47.5%, primarily due to cautious customer spending, product structure adjustments, and VAT impact, while newly acquired or constructed cemeteries contributed RMB 2.9 million in revenue Cemetery Services Revenue Details (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Burial Plot Sales Service Revenue (RMB Thousand) | 398,792 | 815,867 | | Operating Burial Plot Sales Volume (Units) | 6,253 | 6,704 | | Operating Burial Plot Sales Revenue (RMB Thousand) | 396,164 | 808,815 | | Public Welfare Burial Plot and Village Relocation Sales Volume (Units) | 1,055 | 2,527 | | Public Welfare Burial Plot and Village Relocation Sales Revenue (RMB Thousand) | 2,628 | 7,052 | | Other Cemetery Services Revenue (RMB Thousand) | 78,583 | 90,215 | | **Total Cemetery Services Revenue (RMB Thousand)** | **477,375** | **906,082** | - Operating burial plot sales service revenue decreased by **RMB 412.7 million** or **51.0%** year-on-year, with sales volume decreasing by **451 units** or **6.7%**, and average selling price decreasing by **RMB 57,000 per unit** or **47.5%**[66](index=66&type=chunk) - Operating burial plot sales service revenue from comparable cemeteries decreased by **RMB 415.5 million** or **51.4%** year-on-year, with sales volume decreasing by **520 units** or **7.8%**[69](index=69&type=chunk) - Operating burial plot sales service revenue from newly acquired or constructed cemeteries increased by **RMB 2.9 million**, primarily from the cemetery project in Dezhou, Shandong[69](index=69&type=chunk) [Funeral Services Revenue](index=33&type=section&id=Funeral%20Services%20Revenue) Funeral services revenue decreased by 33.8% year-on-year to RMB 121,873 thousand, with service volume decreasing by 25.5% and average selling price declining by 11.2%, mainly due to the expiration of a cooperation project in Hefei, Anhui, the deconsolidation of a subsidiary in Xiamen, Fujian, and changes in the proportion of different service categories Funeral Services Revenue Details (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of Customers (Households) | 26,000 | 34,884 | | Revenue (RMB Thousand) | 121,873 | 184,083 | | Average Selling Price (RMB/Household) | 4,687 | 5,277 | - Funeral services revenue decreased by **RMB 62.2 million** or **33.8%**, with service volume decreasing by **8,884 households** or **25.5%**, and average selling price decreasing by **RMB 590 per household** or **11.2%**[72](index=72&type=chunk) - The decrease in revenue was primarily due to the expiration of a funeral cooperation project in Hefei, Anhui, before the end of last year, and a funeral subsidiary in Xiamen, Fujian, no longer being included in the Group's consolidated financial statements due to the expiration of its original cooperation agreement[72](index=72&type=chunk) [Revenue by Geographical Region_MD&A](index=34&type=section&id=Revenue%20by%20Geographical%20Region_MD%26A) Revenue in all regions generally decreased year-on-year, primarily affected by market competition, cautious customer spending, product structure adjustments, and VAT, while revenue in Shaanxi increased year-on-year, and Fujian had no revenue due to a subsidiary no longer being consolidated Cemetery Services and Funeral Services Revenue by Geographical Region (For the six months ended June 30) | Region | 2025 Revenue (RMB Thousand) | 2025 Share (%) | 2024 Revenue (RMB Thousand) | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Shanghai | 240,970 | 40.2% | 526,143 | 48.3% | | Liaoning | 65,607 | 11.0% | 69,766 | 6.4% | | Anhui | 63,662 | 10.6% | 87,739 | 8.0% | | Henan | 33,165 | 5.5% | 68,805 | 6.3% | | Jiangxi | 32,489 | 5.4% | 46,154 | 4.2% | | Jiangsu | 32,059 | 5.4% | 52,524 | 4.8% | | Shandong | 27,736 | 4.6% | 44,558 | 4.1% | | Zhejiang | 22,632 | 3.8% | 25,354 | 2.3% | | Chongqing | 20,330 | 3.4% | 37,787 | 3.5% | | Heilongjiang | 17,995 | 3.0% | 42,568 | 3.9% | | Guizhou | 14,667 | 2.4% | 23,604 | 2.2% | | Gansu | 12,010 | 2.0% | 13,821 | 1.3% | | Inner Mongolia | 6,761 | 1.1% | 9,332 | 0.9% | | Guangxi | 6,584 | 1.1% | 8,980 | 0.8% | | Shaanxi | 2,300 | 0.4% | 1,530 | 0.1% | | Hubei | 281 | 0.1% | 814 | 0.1% | | Fujian | — | — | 30,686 | 2.8% | | **Total** | **599,248** | **100.0%** | **1,090,165** | **100.0%** | - Revenue in the Shaanxi region increased year-on-year, primarily because a company in Yan'an, Shaanxi, was a recently acquired entity with a low comparison base[75](index=75&type=chunk) - The Fujian region had no revenue in the current period because a funeral subsidiary is no longer included in the Group's consolidated financial statements[75](index=75&type=chunk) [Other Services Revenue](index=35&type=section&id=Other%20Services%20Revenue) Other services revenue primarily stemmed from providing professional design services to domestic cemeteries and funeral homes (RMB 7.5 million) and cremator sales and related services (RMB 2.9 million) - Other services revenue primarily stemmed from professional design services (**RMB 7.5 million**) and cremator sales and related services (**RMB 2.9 million**)[76](index=76&type=chunk) [Operating Expenses Analysis](index=35&type=section&id=Operating%20Expenses%20Analysis) In the first half of 2025, the Group's operating expenses increased by RMB 252.3 million or 42.9% year-on-year, mainly due to an increase of RMB 206.0 million in asset impairment and bad debt provisions, as well as higher tax costs for some subsidiaries, while staff costs, project costs, material and supply consumption, and marketing and sales channel costs all decreased - Operating expenses increased by **RMB 252.3 million** or **42.9%** year-on-year[77](index=77&type=chunk) - Asset impairment and bad debt provisions increased by a total of **RMB 206.0 million**, including **RMB 217.6 million** in impairment losses for property and equipment, intangible assets, cemetery assets, and goodwill[77](index=77&type=chunk)[80](index=80&type=chunk) [Staff Costs](index=35&type=section&id=Staff%20Costs) Staff costs decreased by RMB 75.3 million or 29.5% year-on-year, primarily due to a reduction in employee salaries and bonuses commensurate with the decline in sales service revenue Staff Costs (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Staff Costs | 180,310 | 255,647 | - Staff costs decreased primarily due to a reduction in employee salaries and bonuses as cemetery and funeral sales service revenue declined[77](index=77&type=chunk) [Project Costs](index=35&type=section&id=Project%20Costs) Product project costs decreased by RMB 12.7 million or 32.8% year-on-year, primarily due to a reduction in construction volume commensurate with lower sales, and the Group's enhanced planning, optimized investment intensity, and improved input-output turnover rate Project Costs (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Project Costs | 26,020 | 38,705 | - Product project costs decreased primarily due to a reduction in construction volume commensurate with lower sales, in addition to the Group's enhanced planning for park and cemetery construction, optimized investment intensity, and improved input-output turnover rate[77](index=77&type=chunk) [Materials and Supplies Consumption](index=35&type=section&id=Materials%20and%20Supplies%20Consumption) Materials and supplies consumption decreased by approximately RMB 22.1 million or 28.6% year-on-year, primarily due to reduced direct material consumption resulting from lower cemetery and funeral sales service volumes Materials and Supplies Consumption (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Materials and Supplies Consumption | 55,184 | 77,241 | - Materials and supplies consumption decreased primarily due to reduced direct material consumption resulting from lower cemetery and funeral sales service volumes during the period[78](index=78&type=chunk) [Marketing and Sales Channel Costs](index=36&type=section&id=Marketing%20and%20Sales%20Channel%20Costs) Marketing and sales channel costs decreased by RMB 3.7 million or 17.9% year-on-year, primarily due to lower sales service volumes, the Group's control over marketing cost expenditures, and sales commission ratios Marketing and Sales Channel Costs (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Marketing and Sales Channel Costs | 16,724 | 20,381 | - Marketing and sales channel costs decreased primarily due to lower sales service volumes during the period, the Group's further control over marketing cost expenditures, and the management of sales commission ratios[79](index=79&type=chunk) [Depreciation and Amortization](index=36&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization decreased by RMB 1.8 million or 2.0% year-on-year, primarily due to some assets being fully depreciated Depreciation and Amortization (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Depreciation and Amortization | 87,818 | 89,570 | - Depreciation and amortization decreased primarily because some assets were fully depreciated during the period, resulting in lower depreciation and amortization expenses compared to the prior period[79](index=79&type=chunk) [Other General Operating Expenses](index=36&type=section&id=Other%20General%20Operating%20Expenses) Other general operating expenses increased by approximately RMB 145.4 million or 194.4% year-on-year, mainly due to slight increases in repair and office expenses and higher tax costs for some subsidiaries, partially offset by reductions in entertainment, travel, and vehicle transportation expenses Other General Operating Expenses (For the six months ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Other General Operating Expenses | 220,239 | 74,810 | - Other general operating expenses significantly increased primarily due to slight increases in repair and office expenses compared to the prior period, as well as higher tax costs for some subsidiaries due to different tax factors[79](index=79&type=chunk) [Impairment Losses](index=36&type=section&id=Impairment%20Losses) Impairment losses of RMB 217.6 million were recognized for property and equipment, intangible assets, cemetery assets, and goodwill, primarily for goodwill and related assets of cemetery projects in Shandong, Jiangxi, Hebei, and Hubei provinces Impairment Losses (For the six months ended June 30) | Impairment Type | Amount (RMB Million) | | :--- | :--- | | Impairment Losses on Property and Equipment, Intangible Assets, Cemetery Assets, and Goodwill | 217.6 | - Impairment provision of approximately **RMB 77.9 million** was recognized primarily for goodwill of a cemetery project in Shandong Province[80](index=80&type=chunk) - Impairment provision of approximately **RMB 68.5 million** was recognized for goodwill and related assets of a cemetery project in Jiangxi Province[80](index=80&type=chunk) - Impairment provision of approximately **RMB 37.6 million** was recognized for goodwill of a cemetery project in Hebei Province, and approximately **RMB 32.8 million** for goodwill and related assets of a cemetery project in Hubei Province[80](index=80&type=c

Core Viewpoint - The funeral industry in China is driven more by the economic conditions of the living rather than the number of deceased individuals, highlighting a disconnect between increasing mortality rates and declining revenues for funeral companies [4][13][56]. Group 1: Industry Overview - The funeral profession, despite being considered niche, has a near 100% employment rate, with some students securing jobs before graduation [5]. - The aging population in China has reached 310 million, with an estimated 10.93 million deaths in 2024, a 10% increase from four years ago [7][16]. - Major listed funeral companies, including Fushouyuan and Fucheng Co., experienced a 19.3% decline in total revenue in 2024 [9][17]. Group 2: Business Dynamics - The funeral business is fundamentally a perception-driven industry, where collective beliefs about death create significant pricing power, leading to gross margins exceeding 80% [11][12]. - Despite the increase in the number of deaths, profits for funeral companies have halved, indicating that economic conditions, rather than mortality rates, dictate business performance [14][13]. - Fushouyuan's revenue in 2024 was 2.078 billion yuan, down 20.9%, with net profit dropping 52.8%, marking a significant break in its growth trajectory [20]. Group 3: Revenue Composition - The funeral industry consists of three main segments: funeral services, cremation, and burial plots, with burial plot sales accounting for 50%-70% of total funeral costs [21]. - Fushouyuan relies heavily on burial plot sales, which constituted 80% of its revenue in 2024, but the number of plots sold decreased by 23.2% to 12,569 [22][23]. Group 4: Market Trends - The decline in burial plot sales is attributed to alternative burial methods gaining popularity, such as eco-burials and traditional burials, which divert demand from commercial burial plots [24]. - The high prices of burial plots, averaging 121,200 yuan, are significantly higher than real estate prices in major urban areas, indicating a market driven by scarcity and emotional value [30][32]. Group 5: Future Outlook - The traditional growth strategy of price increases in the funeral industry is becoming unsustainable, as evidenced by the decline in sales volume despite rising prices [42][43]. - The average cost of funeral services has decreased from over 6,000 yuan in 2019 to around 5,200 yuan in 2024, reflecting a shift in consumer spending behavior [38]. - Companies are exploring new business avenues, such as AI technology for digital memorials, but these innovations have yet to demonstrate significant market differentiation or growth potential [54][55].

Core Viewpoint - The funeral service company Fushouyuan, listed in Hong Kong since 2013, is experiencing a significant downturn, projecting a loss of 235 to 265 million yuan for the first half of 2025, a stark contrast to a net profit of 299 million yuan in the same period last year, indicating profound changes in China's funeral industry [2][4][9]. Group 1: Company Performance - Fushouyuan's revenue has increased from 600 million yuan to 2.628 billion yuan over the past decade, more than tripling [2][7]. - The company reported a significant drop in revenue in 2024, with total revenue decreasing by over 500 million yuan to 2.078 billion yuan, a year-on-year decline of 21% [7][8]. - The average selling price of burial plots has risen from 102,400 yuan per unit in 2017 to 122,000 yuan per unit in 2024, reflecting a high price point in the market [5][7]. Group 2: Reasons for Loss - The projected loss is attributed to three main factors: macroeconomic conditions leading to cautious consumer spending, increased costs due to tax issues for some subsidiaries, and impairment provisions for goodwill and related assets [4][9]. - The demand for high-priced burial plots has decreased, with consumers becoming more cautious in their spending behavior, leading to a longer decision-making process [9][12]. - Regulatory changes and local policies are shifting, with the Ministry of Civil Affairs actively working on legislation to manage funeral service pricing and practices [10][12]. Group 3: Market Dynamics - Fushouyuan's business spans 19 provinces and municipalities, but revenue has declined across 16 of these regions, particularly in Shanghai, where revenue fell from 1.262 billion yuan in 2023 to 998 million yuan in 2024 [8][9]. - The company is facing challenges from changing consumer behavior, regulatory adjustments, and tax policy changes that impact the funeral service industry [12]. - Fushouyuan plans to adapt by focusing on market and product diversification, leveraging technology to enhance service offerings, and exploring new business models such as digital memorial services [12].

Core Viewpoint - The funeral service company Fushouyuan (01448.HK) has experienced a significant downturn, projecting a loss of 235 to 265 million yuan for the first half of 2025, contrasting sharply with a net profit of 299 million yuan in the same period last year, indicating profound changes in China's funeral industry [2][4][5] Company Performance - Fushouyuan's revenue has increased from 600 million yuan in 2013 to 2.628 billion yuan in 2023, representing over a threefold growth [2][10] - The company was known for its high gross profit margins, which reached 85.85% in 2024, up from 77.60% in 2015 [10] - However, in 2024, the company's revenue dropped by over 500 million yuan to 2.078 billion yuan, a year-on-year decrease of 21%, with net profit halving to 373 million yuan, primarily due to declining cemetery service income [10][11] Market Dynamics - The average selling price of burial plots has significantly increased, with prices in Shanghai reaching three times that of top luxury real estate, indicating a high demand for premium burial services [6][7] - The company operates in 19 provinces and municipalities, but revenue has declined across 16 of these regions, particularly in Shanghai, where revenue fell from 1.262 billion yuan in 2023 to 998 million yuan in 2024 [11] Challenges and Regulatory Environment - The projected losses are attributed to several factors, including macroeconomic conditions, rising costs due to tax issues, and impairment provisions for goodwill and related assets [5][12] - The changing consumer behavior in the funeral service market, with clients becoming more cautious in their spending, has also contributed to the downturn [13][17] - Recent regulatory changes, including the Ministry of Civil Affairs' efforts to revise funeral management regulations, may further impact the pricing and operation of funeral services [14][15][17] Future Outlook - Fushouyuan aims to adapt to the changing market by focusing on diverse consumer needs and leveraging technology to enhance service offerings, including digital memorial services and smart service ecosystems [17]

Core Viewpoint - The funeral service company Fushouyuan (01448.HK), once known for its high profit margins and growth, is now facing significant losses, reflecting profound changes in China's funeral industry [3][5][12]. Group 1: Company Performance - Fushouyuan's revenue increased from 600 million to 2.6 billion yuan from 2013 to 2023, marking over a threefold growth [3][10]. - The company is expected to report a loss of 235 to 265 million yuan for the first half of 2025, a stark contrast to a net profit of 299 million yuan in the same period last year [5][6]. - In 2024, Fushouyuan's revenue dropped by over 500 million yuan to 2.078 billion yuan, a 21% year-on-year decrease, with net profit halving to 373 million yuan [12]. Group 2: Revenue Sources and Pricing - The majority of Fushouyuan's revenue comes from cemetery services, which accounted for 21.65 billion yuan in 2023 but fell to 17.09 billion yuan in 2024 [12]. - The average price of burial plots has significantly increased, with some plots in Shanghai priced at three times the cost of top luxury apartments [8][14]. - The average selling price of burial plots rose from 102,400 yuan in 2017 to 122,000 yuan in 2024 [8]. Group 3: Industry Challenges - The company cites three main reasons for its expected losses: macroeconomic factors leading to cautious consumer spending, rising costs due to tax issues, and impairment provisions for goodwill and related assets [7][14]. - The funeral industry is experiencing a shift in consumer behavior, with clients becoming more cautious and taking longer to make purchasing decisions [14]. - Regulatory changes are also impacting the industry, with new policies aimed at controlling high burial plot prices and enhancing oversight of funeral services [15][16]. Group 4: Future Strategies - Fushouyuan plans to adapt to changing market conditions by focusing on diverse consumer needs and leveraging technology to enhance service offerings [17]. - The company is exploring new business models, including digital memorial services and smart service ecosystems, to maintain its competitive position in the industry [17].

Core Viewpoint - Despite the increasing aging population in China, the high-priced operational cemeteries are facing declining sales, as evidenced by the significant loss forecast from the leading funeral service company, Fushouyuan [1][2]. Company Overview - Fushouyuan, listed in Hong Kong since 2013, has seen its revenue grow from 600 million yuan to 2.6 billion yuan over ten years, reflecting a more than threefold increase [1][2]. - The company primarily generates income from cemetery operations and funeral services, covering 19 provinces and municipalities in China [2]. Financial Performance - Fushouyuan has issued a profit warning, expecting a loss of 235 million to 265 million yuan for the first half of 2025, a stark contrast to a net profit of 299 million yuan in the same period last year [2][3]. - The company’s revenue reached 2.628 billion yuan in 2023, marking a fourfold increase compared to its revenue a decade ago [5]. - The average selling price of burial plots has increased significantly, with prices in Shanghai reaching three times that of top luxury apartments [3][5]. Market Challenges - The decline in sales of high-priced operational cemeteries is attributed to several factors, including macroeconomic conditions, cautious consumer spending, and rising costs due to tax issues [2][7]. - Fushouyuan's revenue from cemetery services dropped from 2.165 billion yuan in 2023 to 1.709 billion yuan in 2024, indicating a significant downturn in this key revenue stream [6]. Regulatory Environment - Recent government initiatives aim to regulate cemetery pricing and enhance oversight of funeral services, which may impact the operational strategies of companies like Fushouyuan [8][9]. - The Ministry of Civil Affairs has included the revision of the Funeral Management Regulations in its legislative agenda, indicating a shift towards more stringent regulations in the industry [8]. Future Outlook - Fushouyuan plans to adapt to changing market conditions by focusing on diversified consumer needs and leveraging technology to enhance service offerings [10].

Core Viewpoint - The company, Fushouyuan (01448.HK), has announced that its board meeting will take place on August 29, 2025, to consider and approve the interim results for the six months ending June 30, 2025, and to discuss the potential distribution of an interim dividend, if any [1]. Group 1 - The board meeting is scheduled for August 29, 2025 [1] - The meeting will focus on the interim performance for the six months ending June 30, 2025 [1] - The board will also consider the distribution of an interim dividend [1]

（股份代號：1448） 董事會會議日期 福壽園國際集團有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此公佈，董事會 會議將於二零二五年八月二十九日（星期五）舉行，藉以（其中包括）考慮及批准本公 司及其附屬公司截至二零二五年六月三十日止六個月中期業績及其發佈，並考慮派 發中期股息（如有）。 承董事會命 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何 部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Fu Shou Yuan International Group Limited 福壽園國際集團有限公司 （於開曼群島註冊成立的有限公司） 福壽園國際集團有限公司 主席兼執行董事 白曉江 香港，二零二五年八月十五日 於本公告日期，執行董事為白曉江先生、談理安先生及王計生先生；非執行董事為 陸鶴生先生、Huang James Chih-Cheng先生及周立杰女士；及獨立非執行董事為 羅祝平先生、何敏先生、梁艷君女士及陳欣先生。 ...

Group 1 - The core viewpoint is that Fushouyuan, a leading player in the cemetery industry, has experienced a significant decline in financial performance, reporting a loss of over 200 million yuan after previously earning 300 million yuan the year before, leading to a 9% drop in stock price [1][2] - The average price of a burial plot at Fushouyuan reached 121,200 yuan, which is 1.76 times higher than the average price of second-hand housing in Beijing, indicating a high cost of burial plots compared to real estate [1][2] - Sales of burial plots have decreased, with Fushouyuan selling 12,600 plots last year, nearly 4,000 fewer than the previous year, suggesting a decline in demand [2][3] Group 2 - Fushouyuan attributes its financial losses to macroeconomic factors, claiming that consumers are becoming more budget-conscious, as the price of 121,200 yuan is close to the average annual salary of an ordinary person [2][5] - The strategy of relying on continuous price increases to compensate for declining sales has not been effective, as consumers are unwilling to pay the high prices [3][4] - The situation highlights the reality that there are no forever appreciating assets, only consumers who remain vigilant about their spending [4]

Core Viewpoint - The company Fushouyuan, a leading player in the cemetery industry, has experienced a significant decline in performance, reporting a loss of over 200 million yuan after previously earning 300 million yuan the year before, leading to a 9% drop in stock price [1][2]. Group 1: Financial Performance - Fushouyuan's average grave price reached 121,200 yuan, which is 1.76 times higher than the average price of second-hand houses in Beijing [1]. - The company sold 12,600 graves last year, a decrease of nearly 4,000 graves compared to the previous year [2]. - The company's losses have been attributed to macroeconomic factors, with consumers becoming more budget-conscious [2]. Group 2: Pricing Strategy and Consumer Behavior - Fushouyuan has been increasing grave prices annually, from 95,400 yuan in 2017 to 121,200 yuan last year, but this strategy has not been effective in maintaining sales [1][3]. - Consumers are unwilling to purchase graves at such high prices, which are close to the average annual salary of an ordinary person [2][5]. - The notion that asset prices can continuously rise is challenged by the reality of consumer awareness and spending limits [4].