Zheshang Securities: Capitalizing on Web3 regulatory dividends, why is HashKey the top choice for compliance in Asia?

Original author: Wang Wushi

HashKey is a rare compliant and licensed digital asset exchange in Hong Kong that combines a retail license, stablecoin offerings, and access to traditional finance. It is poised to capitalize on the global trend of Web3 compliance, institutionalization, and widespread adoption.

Licenses and Location Moat: As one of the first licensed virtual asset trading platforms in Hong Kong to operate for retail users, HashKey accounts for over 75% of the market share of licensed platforms in Hong Kong. With Hong Kong as its base, it is accelerating its expansion into global markets such as Bermuda, Dubai, and the European Union, positioning itself for the "onshore" super cycle.

HashKey currently has only 139,000 clients with assets, representing a significant untapped market compared to Hong Kong's 4.789 million active stock market users. Through the Omnibus model, HashKey embeds its API into partner brokerage apps, enabling traditional investors to seamlessly enter the market without requiring repeated KYC and keeping funds within the same platform, thus accelerating its expansion into the Hong Kong market.

A Three-in-One Ecosystem: HashKey is not only a leading compliant digital asset exchange in Hong Kong, but also proactively holds a controlling stake in Yuancoin Technology, one of the Hong Kong Monetary Authority's stablecoin sandbox institutions, to create a three-in-one ecosystem integrating "compliant exchange + compliant stablecoin + traditional financial gateway." Furthermore, the company is one of the few providers capable of offering fully compliant deposit and withdrawal services 24/7, addressing key settlement and liquidity pain points for its clients.

High-quality transformation of customer structure: HashKey has gradually shifted from a subsidy-driven retail model to a growth engine centered on institutional clients and Omnibus partners. In the first half of 2025, transaction volume from institutional and Omnibus clients bucked the trend and increased, partially offsetting the contraction on the retail side and significantly improving revenue quality and sustainability.

Financial optimization is yielding results: In 2024, HashKey's revenue surged to HK$721 million, with transaction facilitation services becoming the core revenue source, accounting for approximately 70%. Although in a period of strategic investment, the expense structure is continuously being optimized. From 2022 to 2024, the proportion of R&D expenses, general and administrative expenses, and sales and marketing expenses to operating revenue continued to decline, driving a narrowing of the company's losses and demonstrating the beginnings of operating leverage.

Founder and Top Cornerstone Investor Backing: Mr. Lu Weiding, the actual controller of HashKey, along with the employee stock ownership plan and Dr. Xiao Feng, collectively hold 75.19% of the shares, ensuring strategic focus through high equity concentration. The company's IPO in December 2025 secured nine cornerstone investors, including UBS Asset Management, Fidelity International, and CDH Investments, demonstrating high international market recognition.

Earnings Forecast and Valuation: We project HashKey's revenue to be HK$700 million, HK$1.15 billion, and HK$2.02 billion in 2025, 2026, and 2027, respectively, with corresponding net profit attributable to shareholders of HK$950 million, HK$750 million, and HK$150 million.

As a leading licensed digital asset exchange based in Hong Kong, HashKey has a first-mover advantage in attracting compliant incremental funds, thus justifying a valuation premium of 12x PS.

We use the company's revenue in 2027, when its business model enters a stable operating state, as our valuation anchor, corresponding to a market capitalization of HK$24.24 billion. We discount the valuation to 2026 at a discount rate of 12%, corresponding to a share price of HK$7.83. We initiate coverage with an "Overweight" rating.