The Motley Fool

Why is Lendlease investing in Chinese aged care?

According to an article in the Australian Financial Review (AFR) on Monday evening, Lendlease Group (ASX: LLC) has plans to invest in more than $2 billion in new retirement villages across China over the next 5 years – but why?

What are Lendlease’s plans for Shanghai?

The Aussie development company is set to launch a pilot program in Shanghai this week as it tries to get a foot in the door of China’s booming aged care sector.

Lendlease’s first $400 million facility is expected to house more than 1,000 residents in 850 apartments outside Shanghai, adding to its existing status as Australia’s largest owner and operator of retirement villages in Australia.

Lendlease CEO Steve McCann unveiled the company’s $400 million project on the outskirts of Shanghai on Monday, capping a project that started with the signing of a 50-year land usage contract with the provincial government in January.

The Lendlease share price barely moved on the news yesterday given it has already been largely priced in by the market, closing 0.07% higher at $14.21 per share (up 27.9% since the start of the year), and has now dropped back down in morning trade to $14.13 (at the time of writing).

Why invest in China’s aged care sector?

Despite boasting the world’s largest population with 1.3 billion people, China’s population demographics suggest the aged care sector could be set to boom.

The impact of the country’s One Child Policy is now being felt, as the country currently has over 250 million aged over 60 of people entering the retirement age bracket with less children to care for more parents.

Coupled with an increase in wealth across the country, there is a potentially lucrative market waiting for foreign operators in the aged care sector in China, which is why Lendlease is in a race against several big-name players to capture a slice of the sector.

The Lendlease share price has managed to rebound in 2019 despite a significant fall in February after the company reported a writedown in its engineering business and scrapped a $300 million bond issuance in light of the struggling segment.

While Lendlease has had its fair share of troubles in 2019, it hasn’t been the only construction company in the same boat, with both Emeco Holdings Ltd (ASX: EHL) and Seven Group Holdings Ltd (ASX: SVW) investors riding out waves of share price volatility this year.

For those not too keen on the construction and engineering sector, this buy-rated ASX cannabis stock could probide a growth ioption in your portfolio in 2019.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.