An overview of the latest 8 Hong Kong stocks' cryptocurrency layouts: the highest investment exceeds 100 million USD, and the stock price has increased by up to 3.6 times since the beginning of the year

Author: Nancy, PANews

As the Web3 environment in Hong Kong becomes increasingly open, in addition to several Hong Kong investment institutions making significant purchases of U.S. Bitcoin spot ETFs, more and more Hong Kong stocks are also entering the crypto space. This article by PANews reviews eight Hong Kong-listed companies that have embraced the Web3 wave this year. These institutions not only allocate substantial amounts to crypto assets but also integrate their business with Web3 technology and invest in related crypto projects to promote diversified development and even transformation, which has a certain uplifting effect on their stock prices.

Boyaa Interactive: Plans to Purchase Up to $100 Million in Cryptocurrency, Driving a 1130% Year-on-Year Increase in Latest Quarterly Profit

Boyaa Interactive is a Hong Kong-listed company primarily engaged in gaming, which began exploring the crypto market in the second half of last year, aiming to fully transform into a Web3-listed company. As of May 16, Boyaa Interactive's stock price has increased nearly 3.6 times since the beginning of the year, reaching a historical high not seen since February 2016.

In August 2023, Boyaa Interactive announced that its board had approved a budget of $5 million to purchase cryptocurrencies such as Bitcoin and Ethereum, with the funds coming from cash reserves generated by the group's operations in Hong Kong and overseas. A few months later, Boyaa Interactive announced plans to purchase up to $100 million in cryptocurrencies over the next 12 months, including Bitcoin, Ethereum, and USDT, stating that the purchase and holding of cryptocurrencies are important measures for the group's business layout and development in the Web3 field, as well as a key component of the group's asset allocation strategy.

According to an announcement in March this year, Boyaa Interactive purchased a total of 1,110 Bitcoins at an average price of approximately $41,790, 14,855 Ethereum at an average price of approximately $2,777, and about 8 million USDT. Based on the current prices of these cryptocurrencies (as of May 16), Boyaa Interactive has an unrealized gain of over $30.335 million. Furthermore, according to Boyaa Interactive's latest announcement, its profit in the first quarter of this year increased by 1130% year-on-year due to cryptocurrencies.

In addition to purchasing cryptocurrencies, Boyaa Interactive has also invested in several Web3 projects, including in April this year, where Boyaa Interactive signed a subscription agreement with Pacific Waterdrip Digital Asset Fund SPC to invest $1 million in the fund and engage in strategic cooperation in Web3 game development and the Bitcoin ecosystem, with the latter primarily investing in projects related to the metaverse, NFTs, and Web3 infrastructure; Boyaa Interactive participated in a $1.25 million seed round financing for the Web3 asset data platform RootData; and the Web3 venture capital fund AWAKENING VENTURES received a $500,000 investment from Boyaa Interactive, mainly for investments in programmable Bitcoin networks, Web3 games, Easy Smart Earn (ESE), and application infrastructure (such as application layer protocols).

Additionally, Boyaa Interactive revealed that it has formed a Web3 research and operations team that will focus on the development of Web3 games and related Web3 infrastructure, including wallets and DeFi products.

Coolpad Group: Has Purchased $27.86 Million in Crypto Assets, Plans to Spin Off Bitcoin Mining Company for U.S. Listing

Hong Kong-listed Coolpad Group is a Chinese company engaged in the development of mobile communication terminal equipment and software, with its core business being mobile phones, but it has faced years of losses. According to Coolpad Group's disclosed mid-year financial report for 2023, its revenue was HKD 172 million, with a net loss of HKD 117 million, while in 2014, its revenue peaked at HKD 24.9 billion. Due to delays in releasing its 2023 performance report, Coolpad Group has been suspended from trading for some time, with the audit expected to be completed by the end of June 2024.

Due to poor performance in its mobile phone business, Coolpad Group began exploring new business opportunities. Recently, Coolpad Group announced that it is actively seeking opportunities to enter the digital currency field, believing this is an opportunity to expand its crypto business, diversify its operations, and provide an additional revenue channel. Its wholly-owned subsidiary, Digital Tech, has purchased $27.86 million in crypto assets, acquiring 1,500,000 shares of Bitcoin mining company Cleanspark (CLSK) for a total cost of approximately $23.84 million from April 16 to May 8, 2024 (approximately $15.89 per share), and acquiring 113,000 shares of IBIT for a total cost of approximately $4.03 million from April 19 to May 8, 2024 (approximately $35.64 per share). Based on current prices (as of May 16), Coolpad Group has an unrealized gain of over $2.074 million.

It is worth mentioning that Coolpad Group has also launched a new business related to crypto asset mining before the end of 2023 and has made significant capital expenditures related to properties, factories, and equipment, such as spending over $12 million from August to November 2023 to purchase electronic computing servers for crypto mining. It is also considering the possibility of spinning off its wholly-owned subsidiary Coolbit Technologies Limited and listing it independently on the Nasdaq in the United States. This subsidiary has launched a digital currency investment business since the second half of last year, focusing on Bitcoin mining.

Lingxi Interactive: Increases Cryptocurrency Purchase Limit to $6 Million

Mobile game developer Lingxi Interactive began entering the Web3 business and related assets last year. In September 2023, Lingxi Interactive announced that it had purchased a total of 92.4712 Bitcoins in public market transactions on June 15, July 7, August 8, and August 17, 2023, and that in the 12 months prior to the announcement date, Lingxi Interactive had also purchased approximately 93.85 Bitcoins for about $2.7 million.

Since the beginning of 2024, Lingxi Interactive has been accelerating its crypto business layout. In late January this year, Lingxi Interactive announced that its board had authorized and empowered the maximum amount for purchasing cryptocurrencies in public market transactions to be adjusted from $5 million to $6 million. At the same time, Lingxi Interactive has announced several investments in crypto projects, such as Bitcoin RGB infrastructure BiHelix, Bitcoin Layer2 scaling solution Merlin Chain, and Bitcoin cross-chain bridge XLink.

As of May 16, Lingxi Interactive's stock price has increased nearly 2.7 times since the beginning of the year, reaching a new high not seen since March 2020.

Guofu Innovation: Plans to Spend HKD 5 Million on Cryptocurrency, Previously Made Multiple Investments

Hong Kong-listed Guofu Innovation is also actively developing Web3-related business layouts, believing that investment in cryptocurrencies will enable the group to better adapt to changing market conditions and assist in the active transformation of its business from traditional finance to innovative finance and technology finance.

As early as August 2023, Guofu Innovation's wholly-owned subsidiary Fuqiang Securities submitted an application to the Hong Kong Securities and Futures Commission to engage in virtual asset-related activities, aiming to provide a more diversified service strategy for investors to explore new revenue sources. Shortly after, Guofu Innovation announced its entry into the virtual asset field again, with its wholly-owned subsidiary Fortune Genesis Holdings Limited planning to acquire a $1.6 million fund equity in Summer Feeder Fund Limited from the company's chairman Liu Zhiwei, which invests in SEBA Bank AG, a bank entity primarily engaged in cryptocurrency-related banking services.

Recently, Guofu Innovation announced that its board had approved a budget of HKD 5 million for the group's investments in cryptocurrencies and virtual asset funds over the next year. This budget will mainly be used to purchase cryptocurrencies (primarily Bitcoin) on regulated and licensed trading platforms and to subscribe to Hong Kong-compliant virtual asset funds (i.e., funds managed by recognized fund managers engaging in regulated activities under the Securities and Futures Ordinance, approved to invest more than 10% of the total asset value in virtual assets or indirectly invest in virtual assets). In addition, Guofu Innovation has previously invested in virtual asset management company MaiCapital, stored value payment tool company Yuanbi Technology, digital exchange TideBit, and digital asset bank SEBA Bank, as well as recently investing $1.5 million in Web3 music startup Star Nest through its wholly-owned subsidiary Chuangqi International Limited.

Since Guofu Innovation announced its plan to purchase cryptocurrencies, as of May 16, although its stock price has only seen single-digit increases, it has reached a new high not seen since December 2020.

Yingyu Universe: Plans to Spend $100 Million on Cryptocurrency Over the Next 5 Years

Yingyu Universe is a Hong Kong-listed interactive social platform that rebranded in 2022 to enter the metaverse business. It includes several products such as Yingke Live, Duoyuan, Super Like, and Jimo, mainly involving live streaming, matchmaking, and social networking. According to Yingyu Universe's 2023 annual financial report, its total revenue for 2023 was 6.84 billion yuan, with a net profit of $400 million, a year-on-year increase of 337.8%.

In March this year, Yingyu Universe announced that investment in cryptocurrencies is an important component of the group's Web3 business development strategy and asset allocation strategy. Its board has approved a budget of $100 million for the group to purchase cryptocurrencies on any regulated and licensed trading platform over the next five years, with funds coming from its existing cash reserves. The stock price of Yingyu Universe did not see a significant increase due to this news, but it reached a new high for the year.

Zhongshouyou: Collaborating to Develop Web3 Games and Will Purchase Virtual Assets

Hong Kong-listed Zhongshouyou is a global IP game operator, with total revenue of 2.6 billion yuan in 2023, and a net profit turning from loss to gain at 5.379 million yuan. Zhongshouyou is also actively laying out in the Web3 field, not only as a member of the Hong Kong Web3.0 Association but also recently collaborating with Hashkey Group to promote the development of Web3 games and gaming platforms, and will open an account on HashKey Exchange to purchase virtual assets. Additionally, Hashkey Group will provide institutional virtual asset custody services for Zhongshouyou.

Affected by this news, as of May 16, Zhongshouyou's stock price rose over 23.8%, reaching a new high for 2024.

Huake Intelligent Investment: Will Deepen the Cryptocurrency Market and Capture Investment Opportunities

Huake Intelligent Investment is a cross-border investment platform listed on the main board of the Hong Kong Stock Exchange. In addition to announcing the opening of an account on HashKey Exchange last year, Huake Intelligent Investment recently announced that its wholly-owned subsidiary signed a fund subscription document and limited partnership agreement for a fund named "Tide Investment One Limited Partnership" managed by Tide Capital on April 23 this year. At the same time, Huake Intelligent Investment stated that the fund's investment aims to allow the company to delve into the digital asset and cryptocurrency market and capture investment opportunities in this field through Tide Capital's professional advantages.

Since the announcement, Huake Intelligent Investment's stock price has not shown significant changes.

Victory Securities: Hong Kong's First Virtual Asset Retail Brokerage, Has Launched Virtual Asset Trading Business

Victory Securities is Hong Kong's first virtual asset retail brokerage. According to Victory Securities' executive director Chen Peiquan's disclosure at the end of 2023, the monthly average turnover of its virtual asset trading service reached $10 million and has already turned profitable.

This year, Victory Securities not only launched the stock-coin trading application VictoryX to allow users to trade stocks and cryptocurrencies on the same platform but also established deep cooperation with crypto projects such as HashKey Exchange and TokenPocket, becoming the only participating brokerage that accepts physical purchases among Hong Kong's first batch of Bitcoin and Ethereum spot ETFs.

From a market performance perspective, Victory Securities' stock price began to rise significantly after a long period of stagnation starting in late November last year, reaching a historical high in April this year.