Bilbel Capital Fund LP / Bilbel Capital LLC on Water Oasis Group Limited
Thesis
Water Oasis is one of Hong Kong's leading beauty-services groups and has compounded services profit at roughly 14.9% annually since 2002. Its brand reduces customers' perceived treatment risk and adds status, which supports pricing, customer retention and the ability to collect non-refundable payments in advance. The prepaid model creates favorable working-capital economics, while the company holds roughly HK$1 billion in cash against a market value of about HK$900 million. The founding family has historically returned substantial capital to shareholders, including paying out roughly 90% of cumulative profits as dividends, and raised the dividend by 43% in May 2026. Industry pressure on smaller Hong Kong clinics could also allow Water Oasis to acquire competitors cheaply and improve their economics using its stronger brands, systems and equipment. Bilbel estimates real profit could exceed HK$250 million by 2030 while substantial cash would remain available for dividends or additional acquisitions.
“Any mix of the two, is worth much more than today’s market price.”
Key risks
- Sustained sales declines would reduce the amount of cash that is truly excess
- Acquisitions may not be available at attractive prices or generate expected returns
- Hong Kong beauty operators face pressure from lower-cost Shenzhen competitors and rising wages and equipment costs