Yunfeng Financial Group Limited announced additional details on its planned disposal of wholly-owned subsidiary Yunfeng Financial Markets Limited (YFML) to Mega Investment (HK) Limited. The transaction, first disclosed on 18 September 2026, forms part of a broader reorganisation of the group’s licensed entities.

YFML’s recent financial performance shows a sharp turnaround: it posted a profit after tax of HK$5.34 million in FY 2024 but swung to a HK$263.40 million loss in FY 2025, mainly due to a one-off impairment of HK$269.30 million on intra-group receivables. These receivables arose from historic transfers of surplus cash to other group companies under Yunfeng’s cash-management policy and were unsecured, interest-free and without fixed repayment terms.

At 31 December 2025, YFML’s audited net asset value (NAV) stood at HK$21.02 million. By 30 June 2026, unaudited NAV had fallen to HK$4.05 million after a further HK$17.00 million intra-group cash transfer was written off, mirroring the prior-year impairment approach.

Deal terms set the consideration as two components: (1) a fixed licence premium of HK$4.00 million and (2) YFML’s NAV five business days before completion, subject to a cap that NAV will not exceed HK$8.00 million. Using the 30 June 2026 unaudited balance sheet as a reference, this framework implies a provisional transaction value of about HK$8.05 million.

An independent financial adviser appointed by Yunfeng benchmarked the HK$4.00 million licence premium against three indicative market quotes for SFC-licensed entities with Type 1, 4 and 9 permissions, which ranged between HK$2.50 million and HK$4.00 million. The adviser also cited a comparable completed transaction with an implied premium of HK$2.66 million. The board—excluding Chairman Yu Feng due to his deemed interest—concluded the agreed consideration is fair, citing the premium’s position at the top of market indications, YFML’s limited standalone business and dormant client accounts, and the inclusion of a NAV adjustment mechanism.

Post-completion, existing intra-group revenue arrangements will cease, underscoring that the buyer is principally acquiring YFML’s licensed platform rather than an ongoing revenue-generating business.

Completion remains conditional upon customary approvals and satisfaction (or waiver) of agreed conditions. Shareholders and potential investors are advised to exercise caution when dealing in Yunfeng Financial’s securities.