[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  LTValue [@qualitybargain](/creator/twitter/qualitybargain) on x 2243 followers Created: 2025-07-17 01:29:08 UTC Ming Fai Group $3828.HK - another one from NCAV screening US$80m market cap, only XX% of free float. Has been highlighted before on here by several people incl. @MikeFritzell Manufacturer of consumable amenity products and accessories for hotel, hospitality, and travel industries (e.g. soaps, toothbrushes, slippers, etc.). Has been a leading supplier for >30 yrs. Production is based in Cambodia. Mostly weighted to hospitality supplies which is ~80% of revenue and EBITDA. Geographic exposure to China and HK is largest at XX% and XX% but then also diversified across Europe, North America, other Asia. 2nd-gen family owned and operated business. Chairman (and effectively the CEO) is Ching Chi Fai, aged 63, who founded the business in 2007. Other executive directors include Ching Chi Keung (the brother) and Ching Tsun Wah (the son). Chairman Fai owns 30%, Keung 5%, and ~8% from other directors. David Webb (HK activist investor) still there at 16%. Travel/tourism volume is main driver of growth. Business was hit in FY20-21 due to COVID but has since restored earnings power with EBITDA margins going from X% in FY21 back to XX% in FY24, and revenue now XXX% of FY19 levels. Has maintained a mid-20s gross margin. ROIC in FY18-19 was ~HSD and has returned to XXX% in FY24. Cash conversion has been a bit lumpy due to movements in working capital. Otherwise, has been steadily paying dividends (38%, 49%, and XX% payout in FY22-24), paying down debt, and re-investing through capex. Has HK$ 1.8m + 24.3m of debt against cash and equivalents of 399m. Market cap is 631m, so still over-capitalised with too much cash. Have already haircut AR and inventory to XX% and 50%, so market cap is XX% of NCAV (mostly cash). Receivables stepped down from 819m Dec-24 to 668m in the Mar-25 update. On earnings basis, currently at 4.3x LTM PE and 6.4x LTM EV/FCF. LTM dividend yield of 12%. Not a bad business but selling commodity products in a competitive industry. Am not sure on sustainability of growth (failed to grow earnings power in years prior to COVID). If earnings can grow, then risk-reward may be interesting from div yield + re-rate. Otherwise, will be just a cheap stock of an ok business with poor capital allocation and no catalyst. Plenty of research follow-ups needed on more history of mgmt capital allocation, mgmt comp, recent capacity investments, future growth, industry competitive dynamics. Potential red flags: 1) Why so much cash? Unclear about accuracy/truth of numbers... 2) Tariff risk (North America is XXXX% of revenue) 3) Mar-25 trading update wasn't great with revenue and profit -X% and -XX% y/y 4) As at March 2025, has 668m of receivables, XX% of which aged >90d. Purchases and revenue of top X customers was <30% in FY24. 5) Some related party transactions but they don't look very material in magnitude or alarming in nature.  XXXXX engagements  **Related Topics** [market cap](/topic/market-cap) [accessories](/topic/accessories) [$80m](/topic/$80m) [$3828hk](/topic/$3828hk) [fai](/topic/fai) [Post Link](https://x.com/qualitybargain/status/1945656985434968482)
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LTValue @qualitybargain on x 2243 followers
Created: 2025-07-17 01:29:08 UTC
Ming Fai Group $3828.HK - another one from NCAV screening
US$80m market cap, only XX% of free float. Has been highlighted before on here by several people incl. @MikeFritzell
Manufacturer of consumable amenity products and accessories for hotel, hospitality, and travel industries (e.g. soaps, toothbrushes, slippers, etc.). Has been a leading supplier for >30 yrs. Production is based in Cambodia.
Mostly weighted to hospitality supplies which is ~80% of revenue and EBITDA. Geographic exposure to China and HK is largest at XX% and XX% but then also diversified across Europe, North America, other Asia.
2nd-gen family owned and operated business. Chairman (and effectively the CEO) is Ching Chi Fai, aged 63, who founded the business in 2007. Other executive directors include Ching Chi Keung (the brother) and Ching Tsun Wah (the son). Chairman Fai owns 30%, Keung 5%, and ~8% from other directors.
David Webb (HK activist investor) still there at 16%.
Travel/tourism volume is main driver of growth. Business was hit in FY20-21 due to COVID but has since restored earnings power with EBITDA margins going from X% in FY21 back to XX% in FY24, and revenue now XXX% of FY19 levels. Has maintained a mid-20s gross margin. ROIC in FY18-19 was ~HSD and has returned to XXX% in FY24.
Cash conversion has been a bit lumpy due to movements in working capital. Otherwise, has been steadily paying dividends (38%, 49%, and XX% payout in FY22-24), paying down debt, and re-investing through capex.
Has HK$ 1.8m + 24.3m of debt against cash and equivalents of 399m. Market cap is 631m, so still over-capitalised with too much cash. Have already haircut AR and inventory to XX% and 50%, so market cap is XX% of NCAV (mostly cash).
Receivables stepped down from 819m Dec-24 to 668m in the Mar-25 update.
On earnings basis, currently at 4.3x LTM PE and 6.4x LTM EV/FCF. LTM dividend yield of 12%. Not a bad business but selling commodity products in a competitive industry.
Am not sure on sustainability of growth (failed to grow earnings power in years prior to COVID). If earnings can grow, then risk-reward may be interesting from div yield + re-rate. Otherwise, will be just a cheap stock of an ok business with poor capital allocation and no catalyst.
Plenty of research follow-ups needed on more history of mgmt capital allocation, mgmt comp, recent capacity investments, future growth, industry competitive dynamics.
Potential red flags:
Why so much cash? Unclear about accuracy/truth of numbers...
Tariff risk (North America is XXXX% of revenue)
Mar-25 trading update wasn't great with revenue and profit -X% and -XX% y/y
As at March 2025, has 668m of receivables, XX% of which aged >90d. Purchases and revenue of top X customers was <30% in FY24.
Some related party transactions but they don't look very material in magnitude or alarming in nature.
XXXXX engagements
Related Topics market cap accessories $80m $3828hk fai