Analysis of Convertible Bond Conversion Event of Bai Fu Holdings (01488.HK)

Bai Fu Holdings (01488.HK) is a Hong Kong-listed catering company owning well-known brands such as Hehegu, Xinladao, Meet Xiao Mian, and Xi Shaoye [2]. On January 5, 2026, the company released its monthly securities change report [1], announcing that the 3% annual interest convertible bonds issued in 2016 (matured on November 23, 2025) have been fully converted: 610,676,480 bonds were converted into 517,522,440 shares. This event was the main catalyst for the stock to become a hot pick in Hong Kong stocks on that day.

From the perspective of price and valuation, as of December 30, 2025, Bai Fu Holdings’ share price was HK$0.60 [2], with a market capitalization of approximately HK$9.47 billion (total share capital: 1.579 billion shares [2]). The 52-week price range is HK$0.44-HK$1.10; the current share price has risen by 36.36% from the low point and fallen by 45.45% from the high point. The company is currently in a loss state, with both dynamic and static P/E ratios being negative and a P/B ratio of -3.12 [2], so the market has doubts about its profit prospects.

1. Contradiction between Conversion Price and Market Confidence
   : The bond conversion price is approximately HK$1.18, which is much higher than the current market price of HK$0.60. This may be interpreted by the market as bondholders’ confidence in the company’s long-term development, but it also reflects the gap between the current share price and the expectations at the time of bond issuance.
2. Limited Dilution Effect
   : The newly added 517.5 million shares after conversion will increase the total share capital to approximately 1.63 billion shares, with a dilution ratio of about 3.28%. The short-term pressure on the share price is limited, but attention should be paid to the market’s reaction to the impact of dilution.
3. Superimposition of Industry Recovery Expectations
   : The catering industry where Bai Fu Holdings operates is an important sector for consumption recovery, and this macro background may have amplified the impact of the bond conversion event on the share price.

1. Equity Dilution Risk
   : The newly added shares will dilute earnings per share, putting short-term pressure on the share price.
2. Sustained Loss Risk
   : The company’s earnings per share are -HK$0.15 [2], and sustained losses may weaken investor confidence.
3. Financial Soundness Risk
   : The company’s net assets per share are -HK$0.19 [2], so its asset-liability status needs continuous attention.

1. Consumption Recovery Dividend
   : As a catering industry enterprise, Bai Fu Holdings may benefit from the trend of domestic consumption recovery.
2. Brand Matrix Advantage
   : It owns multiple well-known catering brands and has certain market competitiveness.

This report summarizes the situation where Bai Fu Holdings (01488.HK) became a hot pick in Hong Kong stocks due to the convertible bond conversion event. The conversion event involves 610.7 million bonds converted into 517.5 million shares, with the conversion price much higher than the current market price. The company is currently in a loss state, with equity dilution and financial risks, but it may also benefit from the recovery trend of the catering industry. Investors should make decisions based on their own risk preferences and judgments on the company’s long-term prospects.