On 16 October 2026, Lung Fung Group Holdings Limited (Lung Fung Group) disclosed that indirect wholly owned subsidiary Lung Fung Pharmaceutical (Group) Limited (LFP) has executed three lease arrangements with entities wholly owned by Chairman and CEO Mr Tse Siu Hoi, triggering connected-transaction reporting under Hong Kong’s Listing Rules.
Key terms of the three agreements are:
• New Lease Agreement (20 July 2026): LFP will lease Room 202, Lung Fung Group Centre, Fanling, from Huge Max (Hong Kong) Limited for one year to 19 July 2027, with an extension option to 31 March 2028. Monthly rent is HK$0.16 million, with a HK$0.58 million deposit.
• First Renewal Lease Agreement (30 September 2026): LFP renewed tenancy of No. 68 San Uk Tsuen, Lung Yeuk Tau, Fanling, with Full Group Corporation Limited for two years to 30 September 2028 at HK$0.04 million per month. Deposit totals HK$0.12 million.
• Second Renewal Lease Agreement (16 October 2026): LFP renewed tenancy for a portion of 1/F, No. 66 San Hong Street, Sheung Shui, with Max Profit Investment (Holdings) Limited for two years to 15 October 2028 at HK$0.02 million per month. Deposit amounts to HK$0.05 million.
All rentals are exclusive of management fees, government rent, rates and other outgoings, and will be funded from internal resources. Rents were set with reference to prevailing market rates for comparable premises.
Accounting impact
Under HKFRS 16, Lung Fung Group will recognise an aggregate unaudited right-of-use asset of approximately HK$3.20 million, representing the present value of lease payments across the three contracts. The renewal option embedded in the New Lease Agreement is excluded from this calculation.
Listing Rules treatment
Because Huge Max (HK), Full Group and Max Profit are wholly owned by Mr Tse, each lease constitutes a connected transaction. Aggregated percentage ratios fall above 0.1 % but below 5 %, and the combined consideration exceeds HK$3 million. Consequently, the transactions require public reporting and announcement but are exempt from circular, independent financial advice and independent shareholders’ approval under Chapter 14A of the Listing Rules.
Board action
Mr Tse, holding a material interest, abstained from voting on the lease resolutions. Independent non-executive directors concurred that the terms are on normal commercial grounds and in the interests of both the company and its shareholders.
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