HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lung-fung-group-holdings-limited" target="_blank" data-smartkarma-citation="entities:46142:1" rel="noopener">Lung Fung Group (2290 HK)</a> is still 37.3% below its IPO price, despite a sharp rebound following its better-than-expected FY26 results. </li>
<li>Its same-store sales have consistently outperformed, and the start for 1Q FY27 appears encouraging. With an ROE of 72.7% for FY27, its 1.9x P/B is undemanding. </li>
<li>At a 4.8x FY27F PER and a 12.6% dividend yield, the stock is extremely cheap and trades at a steep discount to its HK-listed peers. </li>
</ul>



Lung Fung Group (2290 HK) is still 37.3% below its IPO price, despite a sharp rebound following its better-than-expected FY26 results. 
Its same-store sales have consistently outperformed, and the start for 1Q FY27 appears encouraging. With an ROE of 72.7% for FY27, its 1.9x P/B is undemanding. 
At a 4.8x FY27F PER and a 12.6% dividend yield, the stock is extremely cheap and trades at a steep discount to its HK-listed peers. 


Lung Fung Group (2290 HK): Still Looks Undervalued

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back in 2021, <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a> took 84.89%-held <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic (JS SP)</a> private by way of an Amalgamation. As Matheson was permitted to vote, the outcome was assured. </li>
<li>Less clear are "fair value" appraisal rights afforded Strategic's dissentient shareholders, the outcome of which navigates the Bermuda/UK courts. To date, dissenters have mostly had their way.</li>
<li>Which may have precipitated Matheson opting for a (full value) Scheme for <a href="https://www.smartkarma.com/entities/mandarin-oriental-international-ltd" target="_blank" data-smartkarma-citation="entities:4773:1" rel="noopener">Mandarin Oriental International (MAND SP)</a>, in which appraisal rights are not afforded.</li>
</ul>


Back in 2021, Jardine Matheson (JM SP) took 84.89%-held Jardine Strategic (JS SP) private by way of an Amalgamation. As Matheson was permitted to vote, the outcome was assured. 
Less clear are "fair value" appraisal rights afforded Strategic's dissentient shareholders, the outcome of which navigates the Bermuda/UK courts. To date, dissenters have mostly had their way.
Which may have precipitated Matheson opting for a (full value) Scheme for Mandarin Oriental International (MAND SP), in which appraisal rights are not afforded.


Matheson's Motive For Avoiding MAND's Dissentient Shareholders

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lung-fung-group-holdings-limited" target="_blank" data-smartkarma-citation="entities:46142:1" rel="noopener">Lung Fung Group (2290 HK)</a>, a leading Hong Kong-based chain retail store of beauty, health and pharmaceutical products, is seeking to raise HK$672m net proceeds.</li>
<li>When compared with <a href="https://www.smartkarma.com/entities/sa-sa-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:20143:1" rel="noopener">Sa Sa (178 HK)</a>, it has higher operating and net margins, and also better net profit for FY27.  </li>
<li>At the high-end of IPO price range (HK$6.38), it trades on 9.2x FY27 PER. At par to Sa Sa's 12x, there will be a 29% upside potential to HK$8.25. </li>
</ul>



Lung Fung Group (2290 HK), a leading Hong Kong-based chain retail store of beauty, health and pharmaceutical products, is seeking to raise HK$672m net proceeds.
When compared with Sa Sa (178 HK), it has higher operating and net margins, and also better net profit for FY27.  
At the high-end of IPO price range (HK$6.38), it trades on 9.2x FY27 PER. At par to Sa Sa's 12x, there will be a 29% upside potential to HK$8.25. 


Lung Fung Group (2290 HK) IPO: Too Cheap to Ignore

<ul>
<li>This insight is part of a series of M&amp;A guides our Quiddity* team are publishing to aid investors in understanding the rules, parameters, possibilities, and processes when companies conduct M&amp;A.</li>
<li>The initial guide - <a href="https://skr.ma/iRcDn" target="_blank" rel="noopener">Quiddity Singapore M&amp;A Guide 2019</a> - was published in April 2019. Since that time, there have been various new developments. </li>
<li>This is an update.These insights are designed to be used as a reference. They are not actionable. For a list of Quiddity M&amp;A Guides, click <a href="https://www.smartkarma.com/search?q=%22quiddity%20M%26A%20Guide%22" target="_blank" rel="noopener">here</a>.</li>
</ul>


This insight is part of a series of M&amp;A guides our Quiddity* team are publishing to aid investors in understanding the rules, parameters, possibilities, and processes when companies conduct M&amp;A.
The initial guide - Quiddity Singapore M&amp;A Guide 2019 - was published in April 2019. Since that time, there have been various new developments. 
This is an update.These insights are designed to be used as a reference. They are not actionable. For a list of Quiddity M&amp;A Guides, click here.


Mandarin Oriental International / Event-Driven

Mandarin Oriental International (MAND SP)

<ul>
<li>A sale - partial or otherwise - of <a href="https://www.smartkarma.com/entities/mandarin-oriental-international-ltd" target="_blank" data-smartkarma-citation="entities:4773:1" rel="noopener">Mandarin Oriental International (MAND SP)</a>'s One Causeway Bay (OCB) was always on the cards. But I didn't see an Offer coming. </li>
<li>Concurrent with the sale of 13 floors of OCB to <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a> is seeking to take out MAND's minorities at US$3.35/share by way of a Scheme.</li>
<li>That's a 52.3% premium to undisturbed, and a 53.7% premium to NAV. Unlike the 2021 <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic (JS SP)</a> Offer, Matheson is required to abstain from voting on this takeover. </li>
</ul>


A sale - partial or otherwise - of Mandarin Oriental International (MAND SP)'s One Causeway Bay (OCB) was always on the cards. But I didn't see an Offer coming. 
Concurrent with the sale of 13 floors of OCB to Alibaba (9988 HK), Jardine Matheson (JM SP) is seeking to take out MAND's minorities at US$3.35/share by way of a Scheme.
That's a 52.3% premium to undisturbed, and a 53.7% premium to NAV. Unlike the 2021 Jardine Strategic (JS SP) Offer, Matheson is required to abstain from voting on this takeover. 


Mandarin Oriental (MAND SP): Matheson's Full Offer

Hong Kong

DFI Retail Group is a leading pan-Asian retailer operating supermarkets, hypermarkets, convenience stores, health and beauty stores, home furnishings stores, and restaurants. The company manages a portfolio of well-known brands including Wellcome, 7-Eleven, Mannings, Guardian, and IKEA. DFI Retail Group was founded in 1886 and is headquartered in Quarry Bay, Hong Kong.

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DFI Retail Group (DFI SP)

Lung Fung Group (2290 HK): Still Looks Undervalued

Lung Fung announced that its retail sales revenue increased 21.2% in 1Q FY27, while same-store sales grew 10.3%. This is solid momentum, suggesting...

Osbert Tang, CFA

Matheson's Motive For Avoiding MAND's Dissentient Shareholders

I see MAND trading at 2.1%/6.9% gross/annualised - assuming late Feb 2026 payment. That's not exciting. I prefer Matheson here.

David Blennerhassett

Lung Fung Group (2290 HK) IPO: Too Cheap to Ignore

Lung Fung Group seeks to raise HK$672m in IPO, showing higher margins and profit compared to Sa Sa, with potential 29% upside at IPO price range.

Osbert Tang, CFA

Quiddity M&A Guide 2026: Singapore

This insight is part of a series of M&A guides our Quiddity* team are publishing to aid investors in understanding the rules, parameters,...

David Blennerhassett

Mandarin Oriental (MAND SP): Matheson's Full Offer

The Scheme Doc is out for MAND. The Court Meeting is the 8th December. As previously noted "the Mandarin Oriental Transaction Committee, which has...

David Blennerhassett

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52-week Range

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Lung Fung Group (2290 HK): Still Looks Undervalued

Lung Fung announced that its retail sales revenue increased 21.2% in 1Q FY27, while same-store sales grew 10.3%. This is solid momentum, suggesting...

Osbert Tang, CFA

Matheson's Motive For Avoiding MAND's Dissentient Shareholders

I see MAND trading at 2.1%/6.9% gross/annualised - assuming late Feb 2026 payment. That's not exciting. I prefer Matheson here.

David Blennerhassett

Lung Fung Group (2290 HK) IPO: Too Cheap to Ignore

​Lung Fung Group seeks to raise HK$672m in IPO, showing higher margins and profit compared to Sa Sa, with potential 29% upside at IPO price range.

Osbert Tang, CFA

Quiddity M&A Guide 2026: Singapore

This insight is part of a series of M&A guides our Quiddity* team are publishing to aid investors in understanding the rules, parameters,...

David Blennerhassett

Mandarin Oriental (MAND SP): Matheson's Full Offer

The Scheme Doc is out for MAND. The Court Meeting is the 8th December. As previously noted "the Mandarin Oriental Transaction Committee, which has...

David Blennerhassett

Lung Fung Group seeks to raise HK$672m in IPO, showing higher margins and profit compared to Sa Sa, with potential 29% upside at IPO price range.