IPO hopeful's business is built on a dead certainty: hundreds of millions of Chinese will die one day

Before Santa Claus visits Hong Kong this Christmas, a mainland firm in the “death care” business aims to go public in the city, offering investors the gift of a rare opportunity to make some quick cash, bankers say.

Shanghai-based Fu Shou Yuan International, the largest provider of death care services on the mainland by revenue and geographical coverage, plans to launch a roadshow next week for its initial public offering of shares to raise up to US$250 million on the Hong Kong stock exchange.

If successful, Fu Shou Yuan, which offers tombs, funerals and other death-related ceremonial services on the mainland, would be the first mainland-based provider to list in the city.

“I know some investors may not like this kind of business if they are superstitious, believe in feng shui or something like that,” said one of the bankers familiar with the deal.

“But a good business is a good business, and you can also consider Fu Shou Yuan as just a different kind of real estate company to some extent,” he said.

Indeed, the battle for burial plots in Shanghai entered a tumultuous new phase this year. Prices soared to the sky as the city faced the need to allocate more space for the dead.

A tomb site of less than one square metre in Shanghai now costs about 50,000 yuan (HK$63,200) – more than double the average 22,500 yuan per square metre paid for a home in the city at the end of last year.