Fair-Value Report — Best Food Holding Co. Ltd. (1488.HK)

Insider-Signal Verification

Verified Snapshot

FX used: CNY/HKD ≈ 1.080 (Jul 2026). All financial figures in CNY (reporting currency) unless stated. Market-cap and price data sourced from HKEX DI filing, stockanalysis.com, investing.com (30 Jul 2026 vintage).

Business Overview

Best Food Holding Co., Ltd. (百福控股) operates and manages a portfolio of casual-dining and quick-service restaurant brands in mainland China, with a growing focus on a franchise/asset-light model. Key brands include Chinese fast food and hot pot concepts. As of FY2025, the group reported total system sales of CNY 3,740 million (+7% YoY), the majority of which flows through franchised rather than company-owned stores. Self-operated (owned) restaurant revenue, by contrast, fell ~41% as the company accelerated store disposals and franchise conversion.

A material subsidiary-level catalyst was the IPO of Guangzhou Xiao Noodles Catering Management Co., Ltd. (2408.HK) in December 2025, in which Best Food retains a 15.46% associate stake (reduced from 17.16% after a partial disposal in FY2025 for CNY 48 million). Xiao Noodles is a profitable, fast-growing Chongqing-style noodle restaurant chain with FY2025 revenue of approximately HKD 1.62 billion, net profit of HKD 106 million, and 500+ locations including the first international store in Singapore.

Valuation

Method selection

Best Food is a loss-making operating company with negative reported equity. The playbook bars FCF-DCF and limits traditional P/B. We use two complementary lenses: (1) Sum-of-Parts (SOTP) — disaggregating the publicly-traded Xiao Noodles stake from the core restaurant operations and net liabilities; (2) P/Revenue and System-Sales multiples benchmarked to HK-listed China F&B peers.

SOTP — Key asset: Xiao Noodles stake

Note: SOTP is highly sensitive to the lease-liability estimate (not separately disclosed without the full annual report). The current negative residual reflects the structural balance-sheet deficit and does not include franchise optionality or any value for the growing system-sales network.

System-Sales Franchise Value Adjustment

If Best Food successfully transitions to a pure-franchise model, the relevant metric shifts to total system sales (CNY 3,740M = HKD 4,041M). Applying a tiered system-sales multiple:

Net debt/lease adjustment (subtracted from EV to get equity): estimated HKD 411M. Equity = EV + Xiao Noodles stake HKD 274M – net liabilities HKD 685M. These are illustrative; the franchise conversion is unproven.

Three-Scenario Summary (Probability-Weighted)

Rounding and allowing for residual optionality on a system-sales pivot, we set blended fair value at HKD 0.48/share — a 44% discount to the current price of HKD 0.85.

Reverse Read

At HKD 0.85, the market implies a system-sales multiple of ~0.27× (after crediting the Xiao Noodles stake at market and netting estimated liabilities). For a company with negative EBITDA in its owned-restaurant operations, this embeds aggressive assumptions about franchise transition speed and royalty capture that are not yet in the financial statements. Peers trading at 0.6× their recognized revenue already look undemanding against Best Food at 3.1× recognized revenue.

Peer Comparison

Sources: investing.com, valueinvesting.io, tipranks.com (data as at Jun–Jul 2026). N/D = not disclosed in available sources; N/M = not meaningful. All figures in HKD or as noted.

Conclusion

Signal is genuine — price is wrong.

Easyknit International Holdings (1218.HK), controlled by the Hooper family via the Winterbotham Trust, made a genuine, declared open-market purchase of 10.3 million Best Food shares on 28 July 2026 at HKD 0.85, crossing the 5% threshold. This is not a placement, pledge, or intra-group reshuffle. However, Easyknit is a Hong Kong property/investment company with no F&B expertise — the accumulation reflects a financial thesis, not operational synergies. At 5.31%, there is no takeover premium or control floor.

The fundamental picture is challenging: Best Food has negative equity (CNY –153M), a core restaurant business still posting operating losses (operating loss CNY 57M), and revenue declining across its owned-restaurant portfolio. The FY2025 net-loss improvement was driven almost entirely by one-time investment gains. The positive story rests on two pillars: (1) a 15.46% stake in Xiao Noodles (2408.HK), a profitable and growing noodle chain now worth ~HKD 342M at market; and (2) total system sales of CNY 3.74B growing 7%, which could eventually support a franchise-royalty model.

However, at HKD 0.85/share, Best Food trades at 3.1× its recognized revenue versus an HKEX China restaurant sector multiple of ~0.6×. Even crediting the full Xiao Noodles stake and generous franchise optionality, our blended fair value is HKD 0.48/share — a 44% discount. A buyer paying HKD 0.85 is making an explicit bet on franchise transition speed and Xiao Noodles re-rating that is not yet in the numbers.

Rating: SPECULATIVE SELL. The signal tells us a small corporate investor has conviction; the price tells us that conviction is already richly valued by the market. New investors should wait for a more compelling entry point or for tangible evidence of the franchise transition monetisation.

Key Risks

• Going-concern / dilution: Negative equity and ongoing operating losses may require additional equity issuance, diluting existing holders.
• Xiao Noodles (2408.HK) re-rating downward: The HKD 342M associate stake (HKD 0.22/share at market, no discount) is the largest identifiable asset. A further decline in 2408.HK directly erodes Best Food's NAV; the stock has already fallen 47% from its Feb 2026 peak.
• Core operations continue deteriorating: Self-operated revenue was down ~41% in FY2025. Further declines could trigger impairments and worsen equity.
• Franchise monetisation unproven: Total system sales of CNY 3.74B are large, but fee/royalty income is not separately disclosed; the franchise model has not yet generated visible royalty income.
• Buyer's limited strategic relevance: Easyknit (1218.HK) is a property company; it brings no F&B expertise, distribution, or revenue synergies. Its accumulation reflects conviction rather than strategic value creation.
• China consumer spending environment: The casual-dining sector in China faces persistent pressure from cautious consumer spending and intense competition.
• Opacity of balance sheet: IFRS 16 lease liabilities are not separately disclosed in available secondary sources; total liabilities (~CNY 950M) likely include significant right-of-use obligations that distort apparent leverage.

Sources

• HKEX Disclosure of Interests filing — Easyknit International / Hooper family concert party (28 Jul 2026)
• Easyknit International discloseable transaction announcement, minichart.com.sg / itiger.com (29 Jul 2026)
• Best Food Holding FY2025 annual results PDF — HKEXnews (filed 30 Mar 2026; AGM approved 28 May 2026)
• Best Food Holding financial summary — investing.com (30 Jul 2026)
• Best Food Holding stock data — stockanalysis.com (30 Jul 2026)
• Xiao Noodles (2408.HK) financial data — investing.com (30 Jul 2026); IPO details — intellectia.ai, uSMART.hk (Dec 2025)
• Xiao Noodles 15.46% stake & partial disposal — tipranks.com company announcement summary
• Jiumaojiu EV/EBITDA — valueinvesting.io (Jun 2026)
• Xiabuxiabu EV/EBITDA — valueinvesting.io (Dec 2025)
• Du Du Holdings (8250.HK) disposal of Best Food shares — itiger.com (Aug–Oct 2025)

Disclaimer: This report is produced for informational purposes only and does not constitute investment advice, an offer to buy or sell any security, or a solicitation. The author holds no position in Best Food Holding (1488.HK), Easyknit International (1218.HK), or Xiao Noodles (2408.HK). All valuations are estimates based on publicly available data as at 31 July 2026; they may be materially wrong. Do your own due diligence. Past performance is not indicative of future results. This is not investment advice.