Lung Yen Life Service Corp., Asia’s second-biggest cemetery and funeral-service operator, plans to expand to Hong Kong and Singapore as populations across the region age.
The company is in talks with the respective governments to obtain licenses and will invest at least NT$10 billion ($331 million) in each market, Chairman and Founder David Lee said in an interview on Jan. 22. The company has formed a unit to study overseas markets including China and Malaysia, he said.
“We plan to become the world’s largest brand among the Chinese community, with a focus in Asia,” Lee said. “We are also optimistic on the China market because of its large population.”
Lung Yen, based in Taipei, is expanding outside Taiwan to serve a bigger population pool. Those over 65 years of age accounted for 11 percent of China’s 1.3 billion population as of 2012, and 24 percent of Japan’s population, Citigroup Inc. analyst Eric Lau wrote in a Jan. 22 report, citing data from Euromonitor. China’s death-care service industry reached 46.5 billion yuan ($7.7 billion) in 2012, Lau said.
The company expects to receive government approval to enter Hong Kong and Singapore in two years, Lee said. The investments will include cemeteries, columbariums -- or vaults with niches for urns containing the ashes of cremated bodies -- and funeral services, Lee said at his True Dragon Tower, a columbarium in New Taipei City, about 20 miles northwest of Taipei. He declined to name his Hong Kong partner or the location of the planned site.
Lung Yen also wants to enter 10 Chinese cities in the next 10 years, Lee said. The company announced last June a 2 billion yuan investment in China’s eastern city of Wenzhou in Zhejiang province. The price of land still under negotiation, Lee said this week.
“The key is to win support from local governments,” Lee said. “We would also consider mergers or acquiring some local partners in China.”
About 90 percent of the company’s profit comes from the columbarium and cemetery business, according to Lee, who is targeting 10 percent growth in both revenue and profit this year compared with 2013.
Burial plots in some luxury cemeteries in Taiwan have become more expensive than homes. Plots cost as much as NT$500,000 per ping, or $460 per square foot, according to taiwanfuneral.com, the biggest funeral service data tracking site in Taiwan.
Taiwan home prices in the third quarter last year were NT$241,000 per ping, the latest data from Ministry of the Interior. That is equivalent to $222 per square foot. A ping, a standard measure in Taiwan, is about 36 square feet or 3.3 square meters.
Prices for a standard one-person columbarium niche, measuring about 1.7 square feet, start from NT$80,000 and sell for as much as NT$500,000, according to taiwanfuneral.com. Prices at Lung Yen’s True Dragon Tower range start at NT$300,000 for a one-person niche and a space for a family of 24 can go for as much as NT$12.5 million, Lee said.
Lung Yen’s top line porcelain urns manufactured by Okura Art China, a favorite brand of the Japanese royal family, according to the company’s marketing materials, sell for as much as NT$500,000.
The company also offers a spa service for the deceased, where the embalmer follows a 35-step process including hair and body washing, massage, hair dying and manicure, he said. Families can watch the process. A two-hour spa treatment costs about NT$25,000.
Lung Yen shares gained 0.4 percent to NT$84.30 at the market close in Taipei trading today after rising as much as 1.1 percent. Taiwan’s GreTai Securities Market Index, which includes all stocks that have been listed for more than a month on the island’s secondary board, fell 0.5 percent.
The company, with a market capitalization of about $1.1 billion, may also list in Hong Kong, Lee said, without giving a timetable.
Asia’s biggest operator of cemeteries and funeral facilities by market capitalization is China’s Fu Shou Yuan International Group Ltd., which debuted in Hong Kong in December and is valued at about $1.4 billion, according to data compiled by Bloomberg.