Fairwood (52 HK) is a Hong Kong fast-food restaurant chain with 172 outlets. It serves a mix of Chinese, Japanese and Western food, catering to the tastes of white-collar workers in Hong Kong.

I believe that Fairwood fills a niche. It caters to those who want low-priced meals but prefer Hong Kong-style fare that’s healthier than a typical McDonald’s meal. Fairwood’s customer reviews tend to be average and in line with larger competitor Café de Coral, which has a similar business model.

Hong Kong’s restaurant industry is growing slowly in the low-single digits. Fast-food restaurants are taking share, however, and Fairwood in particular. The company’s return on equity has been consistently above 20%, and pre-pandemic top-line growth was typically in the high-single digits.

A double-whammy has hit Hong Kong restaurants over the past two years: the 2019 anti-government protests cut off inbound tourism from the mainland. Then came COVID-19, which led to dining-out restrictions and social d…