The Web3 environment in Hong Kong is becoming increasingly open. While many local investment institutions have been making large purchases of US Bitcoin spot ETFs, a growing number of Hong Kong-listed companies are also entering the crypto space. This article explores eight such companies that have embraced Web3 in 2024. These firms are not only allocating significant capital to crypto assets but are also integrating Web3 technology into their core operations, investing in related projects, and driving business diversification—efforts that have positively impacted their stock performance.
Boyaa Interactive: Plans to Purchase Up to $100 Million in Crypto, Reports 1130% Quarterly Profit Growth
Boyaa Interactive is a game development company listed on the Hong Kong Stock Exchange. Beginning in the second half of last year, it started exploring the crypto market as part of a broader strategy to transform into a Web3 company. As of May 16, its stock price had surged nearly 3.6 times since the start of the year, reaching a high not seen since February 2016.
In August 2023, Boyaa's board approved a $5 million budget to purchase cryptocurrencies like Bitcoin and Ethereum, using cash reserves from its operations in Hong Kong and overseas. Several months later, the company announced plans to buy up to $100 million in crypto over the next 12 months, including Bitcoin, Ethereum, and USDT. It stated that buying and holding crypto is a key part of its Web3 strategy and overall asset allocation.
According to a March announcement, Boyaa acquired 1,110 BTC at an average price of $41,790 and 14,855 ETH at around $2,777 per coin, plus 8 million USDT. Based on prices as of May 16, these holdings had an unrealized gain of over $30.3 million. The company's latest earnings report showed a 1130% year-over-year increase in quarterly profit, largely due to its crypto investments.
Beyond direct purchases, Boyaa has invested in several Web3 projects. In April, it invested $1 million in the Pacific Waterdrip Digital Asset Fund SPC, forming a strategic partnership focused on Web3 game development and the Bitcoin ecosystem. The fund primarily invests in metaverse, NFT, and Web3 infrastructure projects. Boyaa also participated in a $1.25 million seed round for Web3 asset data platform RootData and provided $500,000 to Web3 venture fund AWAKENING VENTURES, which invests in programmable Bitcoin networks, Web3 games, and application-layer protocols.
Additionally, Boyaa has established a dedicated Web3 research and operations team focused on developing Web3 games and related infrastructure, including wallets and DeFi products.
Coolpad Group: Acquired $27.86 Million in Crypto Assets, Considers Spinning Off Bitcoin Mining Unit for US Listing
Coolpad Group is a Hong Kong-listed company that develops mobile communication devices and software. Its core business is smartphones, but it has faced years of financial losses. According to its mid-2023 financial report, revenue was HKD 172 million, with a net loss of HKD 117 million. This is a far cry from its peak revenue of HKD 24.9 billion in 2014. Due to delays in releasing its 2023 financial results, the company's shares have been suspended from trading, with audited results expected by the end of June 2024.
With its mobile phone business struggling, Coolpad has been exploring new ventures. Recently, it announced plans to enter the digital currency space, viewing it as an opportunity to expand and diversify its revenue streams. Its wholly-owned subsidiary, Digital Tech, has already acquired $27.86 million in crypto assets. Between April 16 and May 8, it purchased 1.5 million shares of Bitcoin mining company Cleanspark (CLSK) for approximately $23.84 million (about $15.89 per share). It also bought 113,000 shares of IBIT for about $4.03 million ($35.64 per share) during the same period. As of May 16, these investments had an unrealized gain of over $2.07 million.
Notably, Coolpad launched a crypto mining business in late 2023 and made significant capital expenditures on property, plant, and equipment, including spending over $12 million on electronic servers for crypto mining between August and November. The company is also considering spinning off its wholly-owned subsidiary Coolbit Technologies Limited for an independent listing on Nasdaq. This subsidiary has been engaged in digital currency investment activities since the second half of last year, with a focus on Bitcoin mining.
LKG Interactive: Increases Crypto Purchase Limit to $6 Million
Mobile game developer LKG Interactive began venturing into Web3业务和相关资产 last year. In September 2023, it announced the purchase of 92.4712 BTC in public market transactions on various dates in June, July, and August. In the 12 months prior to the announcement, the company had also bought 93.85 BTC for approximately $2.7 million.
In 2024, LKG has accelerated its crypto initiatives. In late January, the company's board authorized an increase in the maximum amount for cryptocurrency purchases from $5 million to $6 million. It has also announced investments in several crypto projects, including BiHelix (Bitcoin RGB infrastructure), Merlin Chain (a Bitcoin Layer 2 scaling solution), and XLink (a Bitcoin cross-chain bridge).
As of May 16, LKG's stock price had increased nearly 2.7 times since the beginning of the year, reaching a high not seen since March 2020.
Fortune Innovation: Plans to Invest HKD 5 Million in Crypto, Continuing Its Web3 Strategy
Hong Kong-listed Fortune Innovation is actively developing its Web3-related businesses. The company believes that investing in cryptocurrency will help it adapt to changing market conditions and facilitate a transition from traditional finance to innovative and tech-driven finance.
As early as August 2023, its wholly-owned subsidiary Fortress Securities applied to the Hong Kong Securities and Futures Commission (SFC) to engage in virtual asset-related activities, aiming to provide more diversified services and open new revenue streams. Shortly thereafter, Fortune Innovation announced its entry into the virtual asset sector, with its wholly-owned subsidiary Fortune Genesis Holdings Limited agreeing to acquire $1.6 million in fund equity from company chairman Liu Zhiwei. The target fund invests in SEBA Bank AG, a banking entity primarily engaged in cryptocurrency-related services.
Recently, Fortune Innovation's board approved a budget of HKD 5 million for investments in cryptocurrencies and virtual asset funds over the next year. This budget will be used primarily to purchase cryptocurrencies (mainly Bitcoin) on regulated and licensed trading platforms and to subscribe to compliant virtual asset funds in Hong Kong (where the fund manager is licensed for Type 9 regulated activities and approved to invest more than 10% of the total portfolio value in virtual assets). The company has also invested in virtual asset management company MaiCapital, stored-value tool company Yuanbi Technology, digital exchange TideBit, digital asset bank SEBA Bank, and, more recently, invested $1.5 million in Web3 music startup Star Nest through its subsidiary Chuangqi International Limited.
Since announcing its crypto purchase plan, Fortune Innovation's stock price has seen single-digit growth as of May 16 but reached a new high since December 2020.
Inkeverse: Plans to Spend $100 Million on Crypto Over Five Years
Inkeverse is a Hong Kong-listed interactive social platform. It rebranded in 2022 after moving into the metaverse business. Its products include live streaming, dating, and social apps. According to its 2023 financial report, total revenue was RMB 6.84 billion, with a net profit of $400 million, a year-on-year increase of 337.8%.
In March 2024, Inkeverse announced that cryptocurrency investment is an important part of its Web3 business development strategy and asset allocation. The board approved a $100 million budget for the company to purchase cryptocurrencies on any regulated and licensed trading platforms over the next five years, using existing cash reserves. While the stock price did not show a significant immediate increase following this news, it did reach a new high for the year.
CMGE: Partners to Develop Web3 Games and Plans to Purchase Virtual Assets
CMGE is a global IP game operator listed in Hong Kong. Its total operating revenue for 2023 was RMB 2.6 billion, and it returned to profitability with a net profit of RMB 5.379 million. CMGE is also actively布局Web3领域. It is a member of the Hong Kong Web3.0 Association and recently partnered with Hashkey Group to promote the development of Web3 games and game platform businesses. It plans to open an account on HashKey Exchange to purchase virtual assets. Additionally, HashKey Group will provide institutional virtual asset custody services to CMGE.
Following this announcement, as of May 16, CMGE's stock price had risen over 23.8%, reaching a new high for 2024.
Huake Intelligence Investment: To Deepen Involvement in Crypto Market and Capture Investment Opportunities
Huake Intelligence Investment is a cross-border investment platform listed on the main board of the Hong Kong Stock Exchange. After announcing the opening of an account on HashKey Exchange last year, its wholly-owned subsidiary signed fund subscription documents and a limited partnership agreement in April 2024 for a fund named "Tide Investment One Limited Partnership," established and managed by Tide Capital. The company stated that the fund investment aims to allow it to深入数字资产及加密货币市场 and, leveraging TideCapital's expertise, capture investment opportunities in this field.
There was no significant change in the company's stock price following this announcement.
Victory Securities: Hong Kong's First Retail Virtual Asset Brokerage, Launches Virtual Asset Trading
Victory Securities is Hong Kong's first retail virtual asset brokerage. According to data shared by its executive director, Chen Peiquan, at the end of 2023, its monthly average turnover for virtual asset trading services had reached $10 million, and the business was already profitable.
This year, Victory Securities launched VictoryX, a stock-and-crypto trading app that allows users to trade stocks and cryptocurrencies on a single platform. It has also established deep partnerships with crypto projects like HashKey Exchange and TokenPocket. Furthermore, it became the only participating securities dealer accepting in-kind subscriptions for Hong Kong's first batch of Bitcoin and Ethereum spot ETFs.
After a prolonged period of low performance, Victory Securities' stock price began to rise significantly in late November 2023 and hit a record high in April 2024.
Frequently Asked Questions
Why are Hong Kong-listed companies investing in cryptocurrency?
These companies are diversifying their assets, exploring new revenue streams, and adapting to the growing Web3 ecosystem. Many see crypto investment as a strategic move towards innovation and business transformation, which can also positively influence their stock valuation.
What types of crypto assets are these companies buying?
Most are purchasing major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Some are also acquiring stablecoins like USDT or investing in shares of crypto-related companies and funds.
How does investing in crypto affect these companies' stock prices?
Announcements of significant crypto investments or strategic shifts into Web3 have often led to substantial increases in stock prices for these companies, as investors view these moves positively. However, the impact can vary.
Are these crypto investments regulated?
Yes, these companies typically use regulated and licensed trading platforms for their purchases and comply with Hong Kong's securities and virtual asset regulations where applicable.
What is the long-term goal for these companies in crypto?
Beyond mere investment, many aim to integrate Web3 technology into their existing businesses, develop new products like Web3 games or financial services, and ultimately transform their business models for the future digital economy.
What risks are involved for these traditional companies entering crypto?
They face market volatility, regulatory uncertainty, and the technological complexities of the crypto space. However, many mitigate these risks through careful planning, partnerships with established firms, and phased investment strategies.
For those interested in tracking the performance of these digital assets, explore real-time market data on leading platforms.