Huachuang Securities has initiated coverage on HASHKEY HLDGS (03887) with a "Recommend" rating. The company holds a dominant market position in Hong Kong's compliant digital asset exchange market, possessing first-mover advantages. With compliant digital asset trading as its core business, supplemented by on-chain services and asset services, HASHKEY is building a comprehensive digital asset ecosystem and contributing to Hong Kong's Web3.0 development.
The brokerage forecasts EPS of -HK$0.32, -HK$0.25, and -HK$0.10 for 2025, 2026, and 2027 respectively. Using comparable company PS valuation methodology, it assigns a 22x 2026 PS target valuation, corresponding to a target price of HK$8.55.
HashKey is an Asia-leading digital asset financial services group with global operations. Rooted in Hong Kong with a "compliance-first" strategy, the company holds regulatory licenses in key jurisdictions including Hong Kong, Bermuda, and Singapore. It has established a core business matrix integrating transaction facilitation, on-chain services, and asset management, covering the entire digital asset ecosystem.
The company maintains concentrated ownership with clear ultimate controlling shareholders. Founder Xiao Feng, an early pioneer in digital assets with extensive industry experience, serves as executive director and CEO. Financially, revenue grew from HK$129 million in 2022 to HK$721 million in 2024, representing a CAGR of 136.31%. In H1 2025, transaction facilitation, on-chain services, and asset management services contributed 68%, 19%, and 13% of revenue respectively. Net losses showed narrowing trends in H1 2025, with profitability expected to improve further as scale effects materialize.
HashKey Exchange leads Hong Kong's digital asset exchange market. Benefiting from global expansion and client structure optimization, transaction-related revenue has significant growth potential. The company's early compliance investments have created a virtuous cycle of liquidity and scale, strengthened by ongoing regulatory developments in Hong Kong's virtual asset space.
Global expansion is showing results, with the Bermuda exchange launched in 2024 generating 2.4 times the revenue of Hong Kong operations in its first year, successfully acquiring overseas customers. Client structure has upgraded from retail-driven to institution and omnibus model-dominated. Institutional clients demonstrate high loyalty and trading volumes, enhancing business cycle resilience. Omnibus services already cover 90% of licensed brokers in Hong Kong, with average monthly trading volume reaching HK$6.216 billion in H1 2025, a 238-fold increase year-over-year.
On-chain businesses including staking and tokenization feature high margins, low volatility, and high technical barriers, presenting long-term growth potential. As Asia's largest on-chain service provider by staking assets, the company's staking assets grew from HK$10.2 billion in 2022 to HK$29 billion in Q3 2025, driven by institutional-grade services with zero asset losses and innovative products like ETF Staking Pro. The company possesses strong blockchain technology foundations, with its self-developed public chain HashKey Chain already supporting HK$1.7 billion in RWA tokenization. HashKey Tokenisation provides full-process compliant tokenization solutions and has successfully implemented financial and physical asset tokenization projects. Stablecoin capabilities are established, positioning the company to participate deeply in cross-border payments and RWA applications, potentially benefiting from Hong Kong's growing stablecoin market.
As Asia's largest digital asset manager by AUM, HashKey deploys venture capital funds to invest in frontier blockchain technologies and offers secondary liquidity funds as bridges between traditional finance and crypto investments. Venture capital investments span various Web3 sectors, promoting technological innovation. Secondary liquidity funds provide institutional and professional investors with accessible digital asset exposure through products including digital asset index passive funds and Bitcoin/Ethereum spot ETFs, lowering investment barriers.
Risk factors include significant digital asset price volatility, regulatory changes, and intensified industry competition potentially affecting the company's market position.
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