Water companies on the stock exchange earn tens of billions of dong a year from cemetery business and funeral services
Referring to Biwase (code BWE), investors often immediately think of a “big man” in the water industry in Binh Duong province who is aggressively implementing M&A deals of businesses in the same industry. However, few people know that this enterprise also trades in a “rare” field on the stock exchange through Chanh Phu Hoa Investment – Construction Associate (CPHACO).
CPHACO was established in 2006, main activities in the field of technical infrastructure investment in parks, people’s cemeteries, industrial parks, residential areas and especially business in cemeteries and funeral homes. This business is known as the owner of Hoa Vien Cemetery Chanh Phu Hoa Binh Duong with an area of about 300 hectares, the largest in Binh Duong province.
Owning one of the largest cemeteries in the country, CPHACO regularly brings in tens of billions of dong in profit each year from the sale of burial land and burial and funeral services… In 2021, the company’s revenue this enterprise reached 402 billion dong, up 18% over the same period. Profit after tax reached nearly 83 billion dong, up 33% compared to the previous year.
Impressive growth, especially in the context of high costs due to the deployment of “3 on-site” work for 300 employees. In addition, CPHACO also maximum support families in cremating victims of Covid-19 with a package price lower than other burial facilities in the area.
With the results achieved, CPHACO plans to pay a dividend of 15%/charter capital equivalent to an amount of about VND 48.5 billion. In which, Biwase, as the largest shareholder in the year, holds 43.16% of the shares, will earn nearly 21 billion dong. Not only dividends, It is estimated that in 2021, CPHACO also brings Biwase nearly 36 billion dong in profit from accounting for associates. and this number will continue to increase if CPHACO maintains its growth momentum.
In 2022, CPHACO aims to maintain revenue growth at 18% and plan to pay a dividend of 14%/charter capital. In addition, CPHACO also plans to issue more common shares besides the plan Expansion of Hoa Vien area by 100 hectares will be completed in 2022. The enterprise said that there will be more new services born to meet the needs of people and customers inside and outside the province.
With the advantage of the ability to scale up and the demand for funeral services tend to increase as a matter of course, CPHACO completely has a basis to maintain profit growth. This will guarantee Biwase an interest from the associate and a regular annual dividend. Therefore, it is not exaggerated to think that this is the “goose that lays golden eggs” for water enterprises, even though it is not a key business.
In fact, compared to the only enterprise dealing in cemeteries and funeral services on the stock exchange, Hai Phong Burial (code CPH), CPHACO is much superior in scale. Hoa Vien Chanh Phu Hoa Binh Duong Cemetery covers an area of up to 300 hectares while Phi Liet cemetery managed by the CPH has an area of just over 11 hectares. Even in the expansion plan, by 2025 the area of Phi Liet cemetery is only about 50 hectares.
The advantage of equitization is the ability to generate profits on a small capital. The charter capital is only 44 billion dong, but this business has a steady profit of more than 9 billion dong per year. Annual dividend remains in the range of 16-17%/charter capital, only slightly higher than CPHACO and not too impressive.
However, compared to the market price of only 1,900 VND/share, the above dividend is too attractive for investors. But to own CPH is not easy when this stock has not appeared any transactions after 5 years on UpCOM exchange because there are no shareholders to sell. This partly shows the value of Biwase’s investment in CPHACO.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
