Lao Feng Xiang defends Maybach luxury investment amidst scrutiny

Lao Feng Xiang is investing in MAP to jointly develop the high-end luxury market in the Asia-Pacific region and enrich its product portfolio. MAP, established in February 2025, has not yet commenced operations. LFXHK will acquire 20% of MAP's equity, with the investment valued at $96 million pre-investment and $120 million post-investment. The valuation by Shanghai BDO Appraisal Co., Ltd. utilized the income approach, yielding a 9,692,207.69% appraisal premium over MAP's $1,300 book value.

The company acknowledges several risks, including obtaining government approvals for the offshore investment, market risks in entering new luxury segments, and integration challenges within Lao Feng Xiang's existing brand ecosystem. MAP's operational plan includes expanding its network to 75 agent-operated stores by 2030, with a focus on new product lines and brand licensing. Expected gross profit margins range from 25% for agent/dealer sales to 100% for brand licensing fees.

LFXHK's 28.17% voting rights in MAP aim to protect its investment interests, and the acquisition hinges on MAP securing Maybach trademark usage rights. The investment agreement includes clauses for buyback options and valuation adjustments if initial assumptions diverge significantly from actual performance, and also addresses dividend distribution with LFXHK seeking to formalize these arrangements in MAP's articles of association.