HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hashkey-holdings-limited" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey (3887 HK)</a> confirmed its IPO price at HK$6.68, 3.9% below the top end. Despite favourable subscription and placement levels, this suggests some concerns. </li>
<li>Digital asset-related names, BTC and ETH, have retreated by an average of 11.6% last week, implying a challenging environment for the debut. </li>
<li>It is priced at 14.5x FY26 P/S, vs. 10.5x (peer average) and only a 23% discount to <a href="https://www.smartkarma.com/entities/robinhood-markets-inc" target="_blank" data-smartkarma-citation="entities:33532:1" rel="noopener">Robinhood Markets (HOOD US)</a>. It is only attractive at the low-end price.</li>
</ul>



HashKey (3887 HK) confirmed its IPO price at HK$6.68, 3.9% below the top end. Despite favourable subscription and placement levels, this suggests some concerns. 
Digital asset-related names, BTC and ETH, have retreated by an average of 11.6% last week, implying a challenging environment for the debut. 
It is priced at 14.5x FY26 P/S, vs. 10.5x (peer average) and only a 23% discount to Robinhood Markets (HOOD US). It is only attractive at the low-end price.


HashKey Holdings (3887 HK): A Challenging Debut Despite Oversubscription

Equity Capital Markets

<ul>
<li>At the top end of the price range (HK$6.95), <a href="https://www.smartkarma.com/entities/hashkey-holdings-limited" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey (3887 HK)</a>'s IPO equals a FY26F P/S of 14.9x, and this is not a particularly appealing level. </li>
<li>While it is the industry leader in the region and Hong Kong, it is expected to stay in the red for FY25-27, making a PER comparison meaningless. </li>
<li>Tiny public shareholder base, cryptocurrency volatilities, and the increasingly competitive environment heightened risks. Only a low-end IPO price, or 12.7x FY26F P/S, is attractive.</li>
</ul>


At the top end of the price range (HK$6.95), HashKey (3887 HK)'s IPO equals a FY26F P/S of 14.9x, and this is not a particularly appealing level. 
While it is the industry leader in the region and Hong Kong, it is expected to stay in the red for FY25-27, making a PER comparison meaningless. 
Tiny public shareholder base, cryptocurrency volatilities, and the increasingly competitive environment heightened risks. Only a low-end IPO price, or 12.7x FY26F P/S, is attractive.


Hashkey Holdings (3887 HK) IPO: Pricing Uncertainties Expensively

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hashkey-holdings-limited" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey (3887 HK)</a> is looking to raise up to US$215m in its upcoming Hong Kong IPO.</li>
<li>It operates the largest licensed crypto exchange in Hong Kong.</li>
<li>In this note, we examine the IPO dynamics, and look at the firm’s valuation.</li>
</ul>



HashKey (3887 HK) is looking to raise up to US$215m in its upcoming Hong Kong IPO.
It operates the largest licensed crypto exchange in Hong Kong.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.


HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bc-technology-group-ltd" target="_blank" data-smartkarma-citation="entities:704:1" rel="noopener">BC Technology Group (863 HK)</a> is looking to raise around US$157m from a primary placement.</li>
<li>The deal is a large one to digest, representing 20.2 days of the stock’s three month ADV, and 11.3% of total shares outstanding.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



BC Technology Group (863 HK) is looking to raise around US$157m from a primary placement.
The deal is a large one to digest, representing 20.2 days of the stock’s three month ADV, and 11.3% of total shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.


OSL Group Placement: Momentum Is Strong but Is Opportunistic

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
That trade worked out well.
In my note <a href="https://skr.ma/eEB66" target="_blank" rel="noopener">Microstrategy (MSTR US): "Crypto Through The Tulips"</a> back on the 28 June, I recommended shorting <a href="https://www.smartkarma.com/entities/microstrategy-inc-cl-a" target="_blank" data-smartkarma-citation="entities:14717:1" rel="noopener">Microstrategy Inc Cl A (MSTR US)</a> and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its <a href="https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-acquires-additional-bitcoins-and-now-holds-over-105000-bitcoins-in-" target="_blank" rel="noopener">21 June 21</a> announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/764/original/image_1404123321631156413189.png?1631156418" class="editor-image img-responsive" data-smartkarma-image-id="228764"></figure>
MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/821/original/image_21363881771631163833057.png?1631163833" class="editor-image img-responsive" data-smartkarma-image-id="228821"></figure>
Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.
</div>


That trade worked out well.
In my note Microstrategy (MSTR US): "Crypto Through The Tulips" back on the 28 June, I recommended shorting Microstrategy Inc Cl A (MSTR US) and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its 21 June 21 announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.

MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.

Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.


Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

Hong Kong

OSL Group is a Hong Kong-based investment holding company focused on digital assets and blockchain platforms. It offers brokerage, digital asset exchange, over-the-counter (OTC) trading, custody, and SaaS solutions, including products like OSL Global, OSL BizPay, and USDGO. The company was founded in 2003 and is headquartered in Causeway Bay, Hong Kong.

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OSL (863 HK)

HashKey Holdings (3887 HK): A Challenging Debut Despite Oversubscription

HashKey's IPO is priced at HK$6.68, 3.9% below the top end, signalling concerns despite strong demand. Digital assets were down 11.6% last week...

Osbert Tang, CFA

Hashkey Holdings (3887 HK) IPO: Pricing Uncertainties Expensively

HashKey's IPO at HK$6.95 equals 14.9x FY26F P/S, unappealing due to a tiny public shareholder base, crypto volatilities, and a competitive...

Osbert Tang, CFA

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

OSL Group Placement: Momentum Is Strong but Is Opportunistic

OSL Group is looking to raise around US$157m from a primary placement. In this note, we will talk about the placement and run the deal through our...

Nicholas Tan

Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

But my preference would be cryptocurrency exchange platforms, as they capture all key digital currencies, plus dumb down some of the volatility of...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HashKey Holdings (3887 HK): A Challenging Debut Despite Oversubscription

​HashKey's IPO is priced at HK$6.68, 3.9% below the top end, signalling concerns despite strong demand. Digital assets were down 11.6% last week...

Osbert Tang, CFA

Hashkey Holdings (3887 HK) IPO: Pricing Uncertainties Expensively

​HashKey's IPO at HK$6.95 equals 14.9x FY26F P/S, unappealing due to a tiny public shareholder base, crypto volatilities, and a competitive...

Osbert Tang, CFA

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

​HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

OSL Group Placement: Momentum Is Strong but Is Opportunistic

OSL Group is looking to raise around US$157m from a primary placement. In this note, we will talk about the placement and run the deal through our...

Nicholas Tan

Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

But my preference would be cryptocurrency exchange platforms, as they capture all key digital currencies, plus dumb down some of the volatility of...

David Blennerhassett

HashKey's IPO is priced at HK$6.68, 3.9% below the top end, signalling concerns despite strong demand. Digital assets were down 11.6% last week...

HashKey's IPO at HK$6.95 equals 14.9x FY26F P/S, unappealing due to a tiny public shareholder base, crypto volatilities, and a competitive...

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...