Core Viewpoint - Fushouyuan, a leading funeral service company listed in Hong Kong, reported its first loss in 12 years, with revenue dropping to 611 million yuan, a 44.5% year-on-year decline, and a net loss of 261 million yuan compared to a profit of nearly 300 million yuan in the same period last year [2][3] Revenue Summary - Fushouyuan's main business segments, including cemetery services and funeral services, experienced varying degrees of decline, with total revenue falling from 1.1 billion yuan to 611 million yuan [3] - Cemetery service revenue, which constitutes the largest portion of total revenue, decreased from 906 million yuan to 477 million yuan, while funeral service revenue dropped from 184 million yuan to 122 million yuan [3] Price and Sales Volume Analysis - The significant decline in cemetery service revenue was primarily due to the average price of individual burial plots being halved, with the average price dropping from approximately 120,000 yuan to about 63,000 yuan, a decrease of 47.5% [3] - The number of burial plots sold in the first half of 2025 was 6,253, a year-on-year decrease of 6.7%, indicating that while sales volume did not collapse, the price drop significantly impacted revenue [3] Regional Revenue Decline - Fushouyuan's revenue declined across multiple provinces, with the Shanghai region, which contributes nearly half of the company's total revenue, experiencing a sharp drop from 526 million yuan to 241 million yuan, a reduction of 285 million yuan [4][5] Regulatory Impact - Market rumors suggest that the decline in revenue is linked to price caps on burial plots in Shanghai, with a maximum price set at 160,000 yuan. However, the Shanghai Civil Affairs Bureau denied the existence of such a price cap, stating that pricing should reflect operational realities and sales strategies [6] - Recent regulations emphasize the need for cemetery services to reflect social welfare, with guidelines aimed at preventing excessive pricing and promoting land-saving practices in the funeral industry [6] Asset Impairment - Fushouyuan also reported over 200 million yuan in asset impairment, primarily related to goodwill and other long-term assets from four cemetery projects, due to the overall macroeconomic environment and the impact of value-added tax on sales revenue [7]

Core Viewpoint - Fushouyuan, known as the "first stock in the funeral industry," reported a significant mid-year loss of 230 million yuan, marking its first loss since its listing in 2013, despite stable demand indicators in the funeral industry [1] Group 1: Financial Performance - Revenue decreased by 50% to 610 million yuan, with a profit drop of 145% compared to over 500 million yuan in the same period last year [1] - The main revenue source, cemetery services, saw income drop from 910 million yuan to 480 million yuan, returning to levels seen a decade ago [2] - The average sales price of graves fell by 47.5% to 57,000 yuan, with sales volume decreasing by 451 units to 6,253 [2][4] Group 2: Business Operations - The decline in cemetery service revenue is attributed to a downturn in operational cemetery sales, which dropped significantly [2] - Funeral service revenue decreased by 34% to 120 million yuan, with a 25% drop in customer numbers to 26,000 [3] - The company operates in 17 provinces, with significant revenue declines in key regions, particularly Shanghai, where income fell by over 54% [3] Group 3: Expenses and Impairments - The company recorded a rare impairment loss of 218 million yuan on cemetery assets and goodwill due to changes in business conditions [4] - General operating expenses increased by 194% to 220 million yuan, primarily due to rising maintenance and tax costs [4][5] - The profit margin for cemetery services plummeted from 54.4% to -44.9%, indicating a severe impact on profitability [5] Group 4: Regulatory Environment and Market Trends - New regulations from the Ministry of Civil Affairs aim to establish a basic public funeral service system and impose strict land use limits, affecting the pricing of cemetery services [5][6] - In response to public sentiment regarding high cemetery prices, local governments have implemented price caps and size restrictions on graves [6] - Fushouyuan is exploring service diversification, including pre-paid funeral contracts, which could stabilize future revenues despite current market volatility [6]