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HK Equities · Finance research note

HKEX 0532 - Wong's Kong King International (Holdings) Ltd.

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Evidence and analysis

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2. Company Fundamentals

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 105.04%
Risk / Std Dev (Ann.)* 133.94%
1-Year Price Return* 0.00%

Latest Market Data (as of 2026-08-14, Hong Kong time):

Metric Value
Last Price HK$0.3
52-Week Range HK$0.242 – HK$1.12
Observation Count 245 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year price series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue HK$3.67B HK$3.45B
Net income Reported net income HK$-55.32M HK$-190.16M
Total assets Year-end reported balance HK$2.99B HK$2.91B
Shareholders’ equity Year-end reported balance HK$1.35B HK$1.40B
Net margin Net income ÷ revenue -1.51% -5.52%
Asset turnover Revenue ÷ total assets 1.2284x 1.1860x
Equity multiplier Total assets ÷ shareholders’ equity 2.2237x 2.0691x
ROE Net margin × asset turnover × equity multiplier -4.11% -13.54%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue HK$3.67B
Prior annual revenue HK$3.45B
EBIT HK$36.25M
Tax rate 16.50%
NOPAT = EBIT × (1 − tax rate) HK$30.27M
Forecast start-growth basis 6.62%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT HK$30.27M
Add: depreciation & amortisation HK$59.95M
Less: capital expenditure -HK$11.00M
Less/(add): working-capital cash-flow movement HK$39.51M
Current unlevered FCFF HK$118.73M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 6.62% HK$32.27M HK$63.92M -HK$11.73M HK$42.13M HK$126.59M HK$123.50M
2 5.59% HK$34.08M HK$67.49M -HK$26.16M HK$44.48M HK$119.89M HK$111.32M
3 4.56% HK$35.63M HK$70.57M -HK$41.76M HK$46.51M HK$110.95M HK$98.05M
4 3.53% HK$36.89M HK$73.06M -HK$58.14M HK$48.15M HK$99.95M HK$84.07M
5 2.50% HK$37.81M HK$74.88M -HK$74.88M HK$49.35M HK$87.16M HK$69.78M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.78
Cost of equity 8.98%
Pre-tax cost of debt 4.50%
WACC 5.07%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value HK$3.48B
Implied terminal EV / EBITDA 28.96x
Terminal value as % of enterprise value 84.81%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF HK$486.72M
Present value of terminal value HK$2.72B
Indicated enterprise value HK$3.20B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value HK$3.20B
Less: gross interest-bearing debt HK$664.74M
Add: cash and equivalents HK$610.25M
Add: affiliate investments HK$0.00
Less: minority interests HK$89.28M
Indicated common equity value HK$3.06B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 729,897,964.00
Share-count basis reported shares outstanding; option/RSU dilution data not separately available
Current market price HK$0.30
DCF indicative value per share HK$4.19
Indicative value vs. market price 1,274.94%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 16:26:00.611109 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set Asia Pacific ex Japan
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-20 to 2026-06-30
Aligned daily observations 210
Minimum observation requirement 120
Currency conversion for HK listings HKD adjusted close divided by daily USD/HKD close before simple daily return calculation

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 108.53% 69.24%
Adjusted R² 0.02 0.04
Annualised residual volatility 139.87% 138.04%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.52 (-0.65) 0.22 (0.25)
Size (SMB) 1.91 (1.63) 3.87 (2.66)
Value (HML) 2.33 (2.10) 1.71 (1.41)
Profitability (RMW) NM -0.00 (-0.00)
Investment (CMA) NM 4.08 (2.33)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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