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/hashkey-digital-asset-group-lt" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey Digital Asset Group Lt (2365361D HK)</a> is looking to raise at least US$200m in its upcoming Hong Kong IPO.</li>
<li>It operates the largest licensed crypto exchange in Hong Kong.</li>
<li>In this note, we look at the firm's past performance.</li>
</ul>



HashKey Digital Asset Group Lt (2365361D HK) is looking to raise at least US$200m in its upcoming Hong Kong IPO.
It operates the largest licensed crypto exchange in Hong Kong.
In this note, we look at the firm's past performance.


HashKey Holdings Pre-IPO: Volatile Crypto Space, and Volatile Financials

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>On 6 Feb, eight Chinese regulatory authorities jointly issued a notice on further preventing and addressing risks relevant to digital currencies (Yinfa No.42), reaffirming China’s restrictive stance on crypto trading and tightening oversight on tokenized real-world asset (RWA) and overseas issuance of RMB-referenced stablecoin.</li><li>The CSRC then followed with new practical regulatory guidelines for the tokenization of domestic assets issued overseas as asset-backed securities.</li><li>We believe the highlight of the notice lies in its first official definition of RWA by Chinese regulators and the establishment of a clear regulatory framework for domestic companies in pursuit of overseas RWA issuance. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

On 6 Feb, eight Chinese regulatory authorities jointly issued a notice on further preventing and addressing risks relevant to digital currencies (Yinfa No.42), reaffirming China’s restrictive stance on crypto trading and tightening oversight on tokenized real-world asset (RWA) and overseas issuance of RMB-referenced stablecoin.The CSRC then followed with new practical regulatory guidelines for the tokenization of domestic assets issued overseas as asset-backed securities.We believe the highlight of the notice lies in its first official definition of RWA by Chinese regulators and the establishment of a clear regulatory framework for domestic companies in pursuit of overseas RWA issuance. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Moves from a Blanket Ban on Crypto-Related to Tailored Rules for Tokenized RWAs

Hong Kong

HashKey Holdings Limited is a digital asset financial services company that provides a licensed platform for transaction facilitation, on-chain services, and asset management. Its offerings include digital asset exchange, brokerage, custody, staking, tokenization, and venture capital fund management. The company was founded in 2018 and is headquartered in Central, Hong Kong.

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HashKey (3887 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

HashKey Holdings Pre-IPO: Volatile Crypto Space, and Volatile Financials

HashKey is set to raise over $200m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. A closer look at its past...

Nicholas Tan

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

HashKey Holdings Pre-IPO: Volatile Crypto Space, and Volatile Financials

​HashKey is set to raise over $200m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. A closer look at its past...

Nicholas Tan

China Moves from a Blanket Ban on Crypto-Related to Tailored Rules for Tokenized RWAs

On 6 Feb, eight Chinese regulatory authorities jointly issued a notice on further preventing and addressing risks relevant to digital currencies...

CMB International

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...

HashKey is set to raise over $200m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. A closer look at its past...