Is a 12% yield with a Chinese small cap reasonable?
The Best Pacific International Case
I initially became interested in Nameson Holdings as I was looking for high dividend opportunities in Asia outside the tech, energy, or REIT sectors (see last week’s article). This company belongs to the discretionary consumption sector. It supplies elastic bands and lace to lingerie and sportswear companies. As always, there’s a mystery—or rather, a dilemma: a 12% yield on a Chinese small cap – is it the opportunity of a lifetime or a trap? Such a high yield, often associated with high risk, piques curiosity and warrants analysis. Let’s dive in and see whether this yield is sustainable and “deserves” to be included in my Pipart Global Income portfolio.
Source: http://www.bestpacific.com/uploads/20250325_IR%20PPT_FY2024(Print).pdf
I/ A Successful Global Business in a Discretionary Market
A/ Strengths of a B2B Player
1/ BPI’s Job: Crafting Core Elastic Textiles for Global Apparel
Best Pacific International Holdings Limited (Stock code: 2111.HK) is a B2B player, a global manufacturer and supplier of elastic textile materials—including fabrics, webbing, and lace—primarily for the lingerie and sportswear industries. It benefits from a kind of niche leadership: recognized leader in its niche (manufacturing high-quality elastic fabrics and lace), with technical expertise that is difficult to replicate in the short term.
Source: http://www.bestpacific.com/uploads/20250325_IR%20PPT_FY2024(Print).pdf
Unlock the Full 12% Yield Analysis
You have the core question: Is this 12% yield a high-risk trap or a justified opportunity for your global income portfolio?
The remainder of this in-depth analysis is hosted on our main platform and is crucial for your investment decision.
In the full article, we finalize the analysis, covering:
B2B Strengths vs. Operational Risks: A deep dive into Best Pacific’s global B2B niche, its reliance on major clients, and the volatility of raw materials.
The Dividend Sustainability: Analysis of the financials, cash flow, and whether the low P/E (7.5x) and P/B (0.9x) truly justify the risk.
The Macro Verdict: A full breakdown of geopolitical risks (US-China trade war, supply chains) and why a small allocation is still justified to capture this passive income potential.
To get the full risk/reward analysis and the final verdict on Best Pacific (2111.HK), click the button below to read the complete article on our website:
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