Imagi International Holdings Announces Discloseable Transaction: Issuance of New Shares by Subsidiary IFGL

Key Points Investors Need to Know

• Imagi International Holdings Limited has issued a supplemental announcement regarding a significant transaction: its subsidiary, IFGL, will issue new shares in exchange for shares held by a subscriber.
• The Subscription Price was determined through arm’s length negotiations between IFGL and the Subscriber, referencing both the net asset value (HK\$820.3 million) and the market value (HK\$720.5 million as of 30 November 2025) as assessed by an independent valuer.
• The Valuation Methodology adopted was the asset-based approach, primarily because IFGL’s value is driven by its investment positions and liquid assets, which can be reliably measured at market value. Market-based and income-based approaches were deemed unsuitable due to lack of comparable data and the market-dependent nature of IFGL’s earnings, respectively.

Detailed Valuation Breakdown

• Major assets measured:
  • Accounts Receivable and Loan Receivables (with expected credit losses and counterparty risk considered)
  • Other Financial Assets and Held-For-Trading Investments (all listed securities in Hong Kong, valued at closing prices as of 30 November 2025)
  • Other Investments (equity interests in three private corporate entities; book values used as proxies for market value, adjusted for credit losses on loan receivables)
• The value attributable to IFGL was calculated based on the effective interest held in each portfolio company and their respective market values.
• Marketability Discount: A 9.88% discount was applied, referencing the Stout Restricted Stock Study, to reflect the lack of marketability in privately held companies compared to public companies.
• Minority Discount: A 10.73% discount was applied for non-controlling interests, referencing the Mergerstat Control Premium Study, to account for lower marketability compared to controlling interests.

Key Valuation Assumptions

1. Unaudited financial statements as at 30 November 2025 were used, given the absence of audited statements.
2. All relevant legal approvals and licenses for IFGL’s business operations are assumed to be obtained and renewable.
3. Sufficient technical staff and retention of competent management are assumed for continued operations.
4. No major changes in taxation laws or applicable regulations are expected.
5. No significant changes in political, legal, economic, or financial conditions are assumed that would adversely affect IFGL’s revenues or profitability.
6. Interest rates and exchange rates are assumed not to materially differ from current levels.

Important Information for Shareholders

Completion of the Transaction: The completion of the Subscription is subject to fulfillment of certain conditions.
Implications: There is a possibility that the Subscription may or may not proceed. Shareholders and potential investors are strongly advised to exercise caution when dealing in the shares of Imagi International Holdings Limited.

Potential Share Price Impact

• The announcement discloses a significant corporate action involving the issuance of new shares by a key subsidiary, which could affect Imagi International Holdings’ ownership structure and asset values.
• The use of substantial discounts (marketability and minority) and reliance on unaudited financials introduces uncertainties that may affect investor perception and share price volatility.
• The deal’s completion remains uncertain, which may contribute to market speculation and price movement.

Board and Directors

The Board currently comprises:
Executive Directors: Mr. Kitchell Osman Bin (Chairman), Ms. Choi Ka Wing, Mr. Shimazaki Koji.
Independent Non-executive Directors: Mr. Chan Hak Kan, Ms. Liu Jianyi, Mr. Miu Frank H.

Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisers before making any investment decisions. The completion of the transaction described is subject to conditions and may not proceed.

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