New IPO News | Hong Kong-based health and beauty retailer Lung Fung Group has launched its initial public offering, targeting a listing on June 5 with a minimum subscription amount of HK$3,222.17 per lot

Futu News, May 28: $LUNG FUNG GROUP (02290.HK)$ announced in a filing that it will open its IPO subscription from May 28 to June 2, offering approximately 125 million shares globally, with an expected listing date of June 5.

Company Overview

Lung Fung Group is a leading Hong Kong-based retail chain operating under the 'Lung Fung' brand, specializing in cosmetics, health supplements, and pharmaceutical products. As of the latest practicable date, the company operates 31 retail stores in Hong Kong and multiple online sales platforms, focusing on delivering a wide selection of high-value products to customers. With over 30 years of experience, the company has developed a strong capability to effectively identify and respond to consumer demand in the local retail market, establishing itself as a one-stop supplier of cosmetics, health supplements, and pharmaceuticals.

The company possesses strong supply chain procurement capabilities, sourcing from over 600 suppliers as of November 30, 2025, including international brand manufacturers and authorized distributors, ensuring a stable and timely supply of various products. In each of the fiscal years 2023, 2024, and 2025, three of the company’s top five suppliers had maintained business relationships with the company for more than 15 years.

Financial Summary

For the fiscal years 2023, 2024, and 2025, Lung Fung Group reported total revenues of HK$10,940 million, HK$20,207 million, and HK$24,605 million, respectively, representing a compound annual growth rate of 50.0% over the three-year period. The company recorded a loss of HK$271 million in fiscal year 2023, followed by net profits of HK$1,445 million and HK$1,704 million in fiscal years 2024 and 2025, respectively, reflecting a 17.9% increase over the two-year period.

Source: Prospectus

Use of Proceeds

Regarding the use of proceeds, Lung Fung Group expects to receive net proceeds of approximately HK$672 million from the global offering (assuming the over-allotment option is not exercised and based on the mid-point offer price of HK$5.78 per share). According to the prospectus, Lung Fung Group intends to allocate the proceeds from the global offering as follows:

Approximately 36.6% is expected to be used to expand, enhance, and optimize the company’s physical and online sales networks; approximately 3.5% is expected to be allocated to brand management and marketing activities to enhance the group’s public recognition and the effectiveness of its marketing campaigns; approximately 3.5% is expected to be used to strengthen the company’s supply chain capabilities by expanding and upgrading its existing procurement office and warehouse in Japan, as well as its warehouse in Korea; and approximately 11.4% is expected to be used to upgrade and improve the company’s information technology systems.

Approximately 20% is expected to be used to repay the company’s outstanding borrowings; approximately 15% is expected to be allocated toward pursuing selective strategic investments and acquisition opportunities, as well as further developing strategic partnerships to expand the company’s business scale and geographic reach; and approximately 10% is expected to be used as general working capital for the group.

Further reading:Lung Fung Group Prospectus

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