Shares of LUNG FUNG GROUP (02290) have plunged more than 10% on the second day of trading, hitting a fresh low of HK$2.45 during the session, which is half of its initial public offering price of HK$5.18.

As of the latest update, the stock is down 10.32%, trading at HK$2.52 with a turnover of HK$26.48 million.

The company is a Hong Kong-based retail chain specializing in cosmetics, health products, and pharmaceuticals, operating under its own "Lung Fung" brand.

According to market research, based on retail sales for the 2025 fiscal year, the company ranks third among Hong Kong cosmetics, health, and pharmaceutical retailers with a market share of 5.8%.

Measured by revenue, it is also Hong Kong's third-largest retailer of pharmaceuticals and health products, holding a 4.2% market share.

Furthermore, the company has demonstrated rapid revenue growth and steadily improving profits over the past three years.

Financial data shows that from the 2023 to 2025 fiscal years, Lung Fung's revenue increased from HK$1.094 billion to HK$2.460 billion.

The company reported a loss of HK$27.1 million in fiscal 2023, turned profitable in 2024, and achieved a net profit of HK$170 million in fiscal 2025.

Analysts have previously noted that while Lung Fung's profit growth is rapid, it is highly dependent on cross-border tourists and offline sales channels, facing significant pressure from costs such as rent and labor.

Simultaneously, the overall capacity of Hong Kong's cosmetics and pharmaceutical retail industry is limited, introducing some uncertainty to its growth prospects.

Additionally, this public offering did not include cornerstone investors.