Nirvana Asia 1438 / David Kong

Re: Nirvana Asia 1438

Postby winston » Thu Dec 18, 2014 3:29 am

The unusual business model of Nirvana Asia, Hong Kong’s latest “death care” IPO

Nirvana Asia is the latest funeral company to go public on Hong Kong’s stock exchange, in a public offering this week that raised an estimated HK$1.9 billion ($250 million). It follows in the footsteps of Fu Shou Yuan, a luxury Chinese cemetery and funeral chain, that raised about the same amount a year ago. But Nirvana Asia has a special advantage over its rivals.

Nirvana Asia, which calls itself the “largest integrated death care service provider in Asia,” sells tombstones, funeral services, and burial plots in Malaysia, Singapore, and Indonesia, mostly to ethnic Chinese Buddhists and Taoists. But its largest, most-lucrative, and fastest-growing business is in so-called “niches,” or reserved spots for relatives to leave the urns of the deceased:

The niche business is growing faster than the company’s other segments—gross profits rose by 32% between 2011 and 2013, according to the company’s IPO prospectus (pdf, p. 15), and the business line boasted an 80.5% profit margin in the first half of 2014, the most lucrative of all of the company’s services.

The niche business is making money because it is so necessary. Nirvana’s massive Singapore columbarium opened in 2009 as space for burials on the island was shrinking so fast that bodies were being exhumed after only 15 years to make room for the newly dead. Other Asian urban centers are also putting pressure on citizens to choose something besides a land burial.

Nirvana Asia said 40% of the proceeds of its IPO will be used to add new cemeteries, columbarium facilities, and funeral homes in new markets. The biggest opportunity may be nearby, in mainland China, where burial plot prices have skyrocketed, as the government has tried encourage families to scatter their relatives’ ashes at sea, or banned land burials entirely.

Due to land restrictions, ground burials are mostly outlawed in Hong Kong except under special circumstances. Space in local columbaria is so scare that there are lottery systems for public niche spaces. Private columbaria, like the ones run by Nirvana, can charge as much as HK$500,000 ($64,483) for a spot that fits a small urn.

http://qz.com/314059/the-unusual-busine ... -care-ipo/
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Re: Nirvana Asia 1438

Postby winston » Fri Dec 19, 2014 5:28 am

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Nirvana CEO: Opportunity to accumulate shares By: WONG WEI-SHEN

HONG KONG: Integrated death care service provider Nirvana Asia Ltd that made its debut amid weak market sentiments on the Hong Kong Exchange yesterday feels the current valuation provides an opportunity for investors to accumulate the shares.

Unperturbed by its share price performance, chief executive officer and managing director Datuk Kong Hon Kong said that the company’s fundamentals have not changed.

“We believe that this can be seen as an opportunity for investors to accumulate,” said Kong after the listing.

The counter opened at HK$2.36 (RM1.06), 21% lower than its issue price of HK$3, with more than 53 million shares done in early trade.

At market close, Nirvana’s share price was HK$2.10, bringing its market capitalisation to HK$1.4bil.

A total of 290.44 million shares were traded. Some 40% of the deal went to retail investors while the remainder 60% went to institutional investors. “We can’t control market sentiments. As long as we can perform and achieve our targets, then we are not worried,” he added.

Its listing in Hong Kong would enable easier entry into China, said Kong. It is the only Malaysian company to have a singular listing on the Hong Kong Exchange.

Nirvana issued 674.7 million shares at HK$3, the lower end of its price range of between HK$3 and HK$3.38, raising HK$2.024bil in initial public offering (IPO) proceeds.

Nirvana will be using 40% of the proceeds to acquire more land in Malaysian cities that it has not yet covered as well as in Jakarta and Bangkok.

As of June 30, 2014, its land bank stood at 2.2 million sq m.

It will also use the proceeds to expand its current capacity and acquire other funeral service providers both in Malaysia as well as in China and Indonesia.

The company has entered into a non-binding memorandum of understanding (MoU) with a land owner in Vietnam to establish a greenfield cemetery near Ho Chi Minh city.

It also has an MoU with a cemetery operator in the Guangdong province in China to develop a piece of land.

Kong said the company was still conducting due diligence on the MoUs.

Currently more than 80% of the company’s revenue comes from its Malaysian operations. However, Kong expected the overseas markets to contribute more over time.

DBS and UBS are joint sponsors of the IPO exercise while CIMB is a joint bookrunner.

Books closed on Dec 9, with the IPO oversubscribed by more than 50 times.

Taiking Life Insurance Co Ltd and ViewFinder L. P. are cornerstone investors in Nirvana, each taking up US$30mil of the deal.

Private equity firms Orchid Asia V GP Ltd and AIF Capital Asia IV GP Ltd, which invested in Nirvana ahead of its IPO, own 21.64% and 10.66% respectively post-listing.

Orchid and AIF will be subjected to a six month moratorium along with the cornerstones.

The closest benchmark to Nirvana on the Hong Kong Exchange is Fu Shou Yuan International Group, which listed last December, raising HK$1.67bil from its IPO.

For the six month period ended June 30, 2014, Nirvana recorded a revenue of US$70.6mil and net profit of US$14.9mil.

The company was previously listed on Bursa Malaysia under the name NV Multi Corp Bhd in 2000. It was privatised in 2010 by a private equity firm and Kong’s investment vehicle Rightitan Sdn Bhd. Kong now owns 42.70% of Nirvana through Rightitan.

Nirvana runs 10 cemeteries, 12 columbarium facilities as well as two funeral homes across Malaysia, Singapore and Indonesia.

According to Frost & Sullivan, in terms of contract sales, Nirvana has a market share of 56.3% and 78.5% respectively in Malaysia and Singapore. In Indonesia, it holds a 36.1% market share.

Source: The Star
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Re: Nirvana Asia 1438

Postby winston » Sat Dec 27, 2014 9:58 am

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Re: Nirvana Asia 1438

Postby winston » Sun Dec 28, 2014 7:35 am

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Kong: Nirvana Asia will deliver on promise to investors By: WONG WEI-SHEN

NIRVANA Asia Ltd founder Datuk Kong Hon Kong (pic) is confident that the company will deliver the financial results that it has promised to investors and its share performance will improve.

“We are happy that we have managed to raise HK$2.02bil from the listing,” he told a press briefing in Hong Kong last week.

Nirvana Asia was listed on the Hong Kong Exchange recently. Its share price has fallen about 35% to HK$1.93 on Wednesday from its initial public offering (IPO) of HK$3, after issuing 674.7 million shares in its IPO.

The company was listed at a time when the overall market sentiment was weak mainly due to uncertainties in the external environment.

Kong added that the company’s fundamentals had not changed since the listing, and it would continue to operate as usual to achieve the targets it set for itself. He believes it’s an opportune time for investors to accumulate shares in the company.

Market watchers say one of the reasons for Nirvana’s lacklustre share price performance is the large portion of retail investors. Prior to its book building exercise, the company had allocated 90% of its IPO to institutional investors while the remainder 10% went to retail investors.

However, under the Hong Kong public offering, Nirvana’s shares were more than 50 times oversubscribed.

In a statement issued on its website, Nirvana said a total of 17,695 applications were received for 3.49 million shares. This represents approximately 51.67 times of the 67.47 million shares made available to the Hong Kong public.

According to regulations of the Hong Kong Exchange, oversubscription of more than 50 times requires Nirvana to reallocate and clawback the final number of shares under the public offering.

Therefore, Nirvana increased its Hong Kong public offering to 269.88 million shares, representing approximately 40% of its IPO.

“This is Hong Kong. Investors here behave differently,” says Kong.

Of the 674.7 million shares it offered in its IPO, 404.82 million went to international placing shares while the remainder 269.9 million went to Hong Kong offer shares.

It is the first Malaysian company to have a singular listing on the Hong Kong Exchange, and apparently also the only foreign company to list on the exchange this year.

Kong says the listing in Hong Kong will also enable easier entry into the China market. It recently signed a memorandum of understanding (MoU) with a cemetery operator in Guangdong province, China to develop a greenfield cemetery.

Apart from China, Nirvana also signed a MoU with a land owner in Vietnam to establish a greenfield cemetery near Ho Chi Minh city.

The company is still conducting due diligence on both deals, but Kong remains confident that those deals will be closed in due time.

This is in line with its strategy to increase contribution from its overseas operations in the future. Its Malaysian operations currently contribute more than 80% to the group’s revenue.

A majority of its IPO proceeds, about 40% will be used to acquire more land in Malaysian cities that it has not yet covered, as well as in Jakarta and Bangkok.

Kong says it may take between one and three years to utilise the proceeds. Its land bank as of June 30, 2014 stood at 2.2 million sq m.

Meanwhile, it has put aside 25% of the proceeds for potential mergers and acquisitions in Malaysia, China and Indonesia.

It has also allocated 25% of its proceeds to expand the capacity of its existing cemeteries, columbarium facilities and funeral homes.

The remaining 10% of IPO proceeds will go to working capital.

The company was previously listed on Bursa Malaysia under the name NV Multi Corp Bhd on Aug 23, 2000.

Ten years later, it was taken private by Kong and his son Kong Yew Foong through their vehicle Mutual Tactic Sdn Bhd and parties acting in concert, due to a lack of liquidity in its shares.

In an announcement to Bursa in October 2010, the company said Mutual Tactic, which is a unit of Peace Ventures Ltd offered to take the company private for about RM295mil or 78 sen per share, representing a price-earnings ratio of 9.79 times.

The shareholders of Peace Ventures are Rightitan Sdn Bhd (70%), which is controlled by Kong and Yew Foong, and Portwell Investments Ltd (30%), whose directors were Asiasons Capital Group managing directors Datuk Jared Lim and Ng Teck Wah.

Later in 2012, Asiasons disposed off its interests in Portwell.

Rightitan is an investment holding company controlled by Kong.

Rightitan remains the largest shareholder in Nirvana with a 42.70% stake, while private equity firms Orchid Asia V GP Ltd and AIF Capital Asia IV GP Ltd, which invested in Nirvana ahead of its IPO, own 21.64% and 10.66% respectively post-listing.

Taikang Life Insurance Co Ltd and ViewFinder L. P. are cornerstone investors in Nirvana, each taking up US$30mil of the deal.

DBS and UBS are joint sponsors of the IPO exercise while CIMB is a joint bookrunner.

For the six-month period ended June 30, 2014, Nirvana’s revenue grew to US$70.6mil from US$66.1mil. However, net profit fell to US$14.9mil from US$17.74mil a year ago.

Post the IPO, the company is in a net cash position of about US$260mil (RM910mil).

According to research conducted by Frost & Sullivan, Nirvana is the largest integrated death care services provider in Asia in terms of contract sales, revenue and land bank.

It currently runs 10 cemeteries, 12 columbarium facilities as well as two funeral homes across Malaysia, Singapore and Indonesia.

In terms of contract sales, Nirvana has market share of 56.3% and 78.5% respectively in Malaysia and Singapore.

Meanwhile, in Indonesia Nirvana holds a 36.1% market share.

The IPO gave investors the opportunity to buy into a very different and niche industry, compared with what makes up the Hong Kong market. This is supported by the fact that there are very few Asian funeral services companies that have gone public.

China-based Fu Shou Yuan International Group listed on the Hong Kong Exchange last December, after raising HK$1.67bil from its IPO.

The cemetery developer has a current PE of 27.4 times and market capitalisation of HK$7.78bil. Its share price has risen 12.61% to HK$3.75 on Wednesday since listing on Dec 19, 2013.

One of the reasons Nirvana took its listing to Hong Kong, rather than Bursa, was because it has comparable companies on the exchange.

Another benchmark company is Taiwan-­listed Lung Yen Life Service Corp, which also provides funeral services. This company has a PE of 16.24 times at its current share price of Taiwan dollar 95.30.

Source: The Star
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Re: Nirvana Asia 1438

Postby winston » Fri Feb 06, 2015 3:37 pm

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NIRVANA ASIA (01438.HK) to provide sales services for Huizhou Longyan death care products & facilities

NIRVANA ASIA (01438.HK) announced that the group has entered into a non-binding MOU with a Chinese cemetery operator in order to seek the further cooperation and investment opportunities regarding the funeral services market in China.

A subsidiary of the group and Huizhou Longyan Art Cemetery Development Co., Ltd signed a binding cooperation agreement, pursuant to which Huizhou Longyan Art Cemetery Development will grant an exclusive right to the group to provide services in relation to the management, operation and sales of such number of niches.

It's equivalent to not less than 30,000 double niches equivalent of Huizhou Longyan located in its columbarium facilities known as the ??Longyan Main Tower?? in Huiyang District, Huizhou City, Guangdong Province; and a non-exclusive right to the group to provide services in relation to the sales of other death care products and facilities of Huizhou Longyan.

Source: AAStocks Financial News
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Re: Nirvana Asia 1438

Postby winston » Fri Mar 20, 2015 9:13 am

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<Result Ann>NIRVANA ASIA (01438.HK) annual net profit US$35.76M; final div HK5 cents

NIRVANA ASIA (01438.HK) announced annual results for the year ended 31 December 2014.

Revenue climbed 18.1% year-on-year to US$165 million.

Net profit amounted to $35.76 million, up 1.3%.

EPS was US1.74 cents.

A final dividend of HK5 cents was declared.


Source: AAStocks Financial News
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Re: Nirvana Asia 1438

Postby winston » Fri Mar 20, 2015 5:06 pm

vested.

NIRVANA ASIA hopes to reduce income proportion of Malaysian market in three years

NIRVANA ASIA (01438.HK) -0.060 (-2.597%) chief executive officer Kong Hon Kong said at the press conference that the company will focus its development in existing markets.

Overall, it is hoped to reduce the income proportion of the Malaysian market in the next three years.

Source: AAStocks Financial News
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Re: Nirvana Asia 1438

Postby winston » Thu Jun 11, 2015 11:27 am

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May 6, 2015

NIRVANA ASIA (01438.HK) 1Q contracted sales US$40.22M

NIRVANA ASIA (01438.HK) announced that the group recorded a contracted sales amount of US$40.22 million or MYR145 million for the first quarter ended 31 March 2015, up 11.3% or 22.3% year-on-year.

Among of which, the pre-need contracted sales amounted to US$32.79 million or MYR119 million, up 13.7% or 24.9%.

During the quarter, the group sold 20,879 square meters, or 715 units of burial plots, up 38.3% and 41.9% respectively.

Source: AAStocks Financial News
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Re: Nirvana Asia 1438

Postby investar » Sat Jun 13, 2015 7:08 pm

Interesting stock to watch...
Best Small Cap Company in HK according to Finance Asia
Solid growth
I am not used to the idea that columbaria can be commercial though
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Re: Nirvana Asia 1438

Postby winston » Wed Jun 24, 2015 10:13 am

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NIRVANA ASIA (01438.HK) Signs Agreement for Columbarium, Funeral Home in Malaysia

NIRVANA ASIA (01438.HK) announced that its subsidiary entered into two agreements with Klang Kwong Tung Association, namely a joint venture agreement to build columbarium complexes on 2 pieces of zoned cemetery land with an area of around 7.474 acres and a license agreement to construct a funeral home on another piece of land with an area of approximately 2.081 acres, which will be subsequently leased to a wholly-owned subsidiary of the group.

One of the pieces of land is located in Mukim Bukit Raja, Daerah Petaling, Selangor, Malaysia, which is approximately 25 kilometres from the capital city of Kuala Lumpur.

Another piece of land is located Klang, Selangor, Malaysia, which is the fifth largest city in Malaysia.


Source: AAStocks Financial News
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