Death-care service ends 2016’s IPO drought with a bang

GOLDEN HAVEN Memorial Park, Inc. yesterday made a strong debut on the Philippine Stock Exchange (PSE), soaring by almost 50% to reach its ceiling price.

Shares in the memorial park business of billionaire Manuel B. Villar, Jr. settled at P15.74 apiece, gaining 49.9% from their listing price of P10.50. This brought the company’s market capitalization to P5.188 billion.

The PSE index finished the day 1.72% up, while the Services sectoral index to which Golden Haven belongs ended 1.96% higher.

Golden Haven traded above its listing price throughout the session, opening 4.76% higher at P11. The stock touched a P10.82 low before bouncing to its ceiling.

Investors traded more than 36 million shares worth about P419.4 million in Golden Haven.

“It performed better than expected, hitting the ceiling and staying there,” Eagle Securities, Inc. President Joseph Y. Roxas said in a telephone interview.

Regina Capital Development Corp. business development head Luis A. Limlingan also noted that Golden Haven “was taken rather well” by investors.

DEMAND STRONG

The active trading of the Golden Haven shares reflects the strong demand received during the maiden share sale.

The IPO was oversubscribed by more than double, Golden Haven Chief Operating Officer Maribeth C. Tolentino told reporters after the listing ceremony on Wednesday.

The offering consisted of 74,117,647 shares, representing 15% of the company’s issued and outstanding common shares. That provided the company with about P778.2 million in fresh capital.

“What we are seeing now is that the past six months have really created… a lot of… uninvested capital,” PSE Chief Operating Officer Roel A. Refran told reporters on the sidelines of the listing ceremony.

Golden Haven is the first company to debut on the local stock market this year. It represents the country’s first listed deathcare firm.

“We are looking forward to several more IPOs. We have an exciting year remaining for us,” Mr. Refran said.

Messrs. Roxas and Limlingan expect Golden Haven to usher in more IPOs within the next six months.

“Of course there will be some demand now for the others,” Mr. Roxas said.

“Looking at how Golden Haven [fared], others may be expected to perform in the same way.”

Mr. Limlingan, however, noted that the small size of the maiden offering and largely helped Golden Haven perform well on its first day at the stock market.

NICHE

Asked how a deathcare company would possibly fare in the stock market, Mr. Refran said: “I think culturally, we don’t really talk about it openly, but I think the reality is, it is niche industry and there are very few players.”

Deathcare is actually a “stable” business abroad, Mr. Refran added.

“If we are able to sell houses for the living, the living will also require houses when they die so there’s natural requirement for cemeteries and services,” Golden Haven Chief Financial Officer Roy Joseph S. Fernandez told reporters after the listing ceremony.

EXPANSION

The company intends to further expand its business in the provinces, using the net proceeds from the maiden share sale amounting to about P703.046 million.

For this year alone, Golden Haven will launch projects in Pampanga, Nueva Viscaya, Batangas and Cebu. These expansion projects will span a total of four to eight hectares.

The four developments will provide an additional inventory of about 39,000 memorial lots, with sales value totaling P1.8 billion or P35,000 to P40,000 each.

“Based on the lineup of the parks that we’ll launch this year, we’re expecting much higher revenue for 2016,” Mr. Fernandez noted.

Golden Haven is also considering foraying into the pre-need business. This will allow the company to offer memorial lots and services under a flexible financing plan.

Such a plan, however, will take time because this would require Golden Haven to establish a trust fund and have a bigger capitalization, Ms. Tolentino said.

“You have to manage the future expenses. Remember ‘ yung educational plans, di ba nagcollapse because future expenses they were not able to manage versus the return of the trust fund. But in our case, we already have a business plan to control the expenses,” Mr. Fernandez noted.

In the meantime, Golden Haven is focused on expanding its footprint across the country, starting with areas where the housing business of Mr. Villar has already established presence.

Vista Land and Landscapes, Inc. currently has housing developments in 97 cities and municipalities.

Golden Haven has entered nine locations thus far.

“I think we have to always revert back to our vision, which is a park in every hometown,” Mr. Fernandez said.

“In the provinces, mostly the services are in public cemetery [and] there’s also a demand for people to be buried in their hometown,” he noted.

“So the vision ties up with our founder’s desire to uplift the services, the experience in the countryside, from public to private.” —