Core Viewpoint - Shanghai Steel Union (300226) has shown a positive market performance with a closing price of 25.16 yuan, reflecting a 3.75% increase as of December 26, 2025 [1] Group 1: Company Performance - The trading volume on December 26 was 196,600 lots, with a total transaction value of 502 million yuan [1] - The net inflow of funds from major investors was 2.5276 million yuan, while retail investors experienced a net outflow of 14.2219 million yuan [2] Group 2: Business Strategy and Developments - The company is focused on providing pricing services for bulk commodities and has established a price index widely used in various sectors, including steel, iron ore, and coal [2] - Over 30% of China's imported iron ore transactions are settled using the Mysteel iron ore price index, and all coking coal imported from Russia to China is based on the Mysteel coal index [2] - Currently, the company has not partnered with banks to access CIPS or conduct cross-border RMB agency clearing [2]

Core Viewpoint - The company, Shanghai Steel Union, is focusing on enhancing its role in the financial support for the Western Land-Sea New Corridor, particularly in areas of RMB pricing, cross-border payments, and digital financial cooperation [1]. Group 1: RMB Pricing - The company has already implemented RMB pricing and settlement for iron ore and plans to expand this to additional products and scenarios [1]. - It aims to increase the proportion of RMB settlements in platform transactions to a target ratio and incremental scale over the next 6-12 months [1]. - Currently, over 30% of China's imported iron ore transactions are settled using the Mysteel iron ore price index published by the company [1]. Group 2: Cross-Border Payments and CIPS - The company has not yet partnered with banks to access CIPS or to conduct cross-border RMB agency clearing [1]. - The Mysteel coal index is used as the settlement benchmark for all coking coal imported from Russia to China [1].

Group 1 - The payment industry is entering a long-term licensing era by 2025, with a shift towards a focus on financial infrastructure attributes, leading to a more regulated environment where capital strength, corporate governance, and compliance capabilities are critical for payment institutions [1] - The domestic third-party payment industry has reached a peak in overall growth, with both transaction scale and user frequency entering a plateau phase, resulting in a shift from incremental expansion to stock competition [1] - By 2026, the number of payment licenses is expected to continue to decline slowly, with smaller institutions lacking sustainable business models likely to exit the market [1] Group 2 - As of December 26, 11 payment licenses have been revoked this year, totaling 107 licenses since the inception of the licensing system, leaving 164 licensed payment institutions [2] - The People's Bank of China has been actively revoking licenses, with a notable increase in the number of revocations from 2015 to 2024, indicating ongoing structural adjustments within the third-party payment sector [2][3] - The pressure for structural adjustment is particularly focused on prepaid card institutions, which face shrinking application scenarios and rising compliance costs [3] Group 3 - Internet platforms are increasingly acquiring payment licenses as they recognize the importance of payment systems in building commercial ecosystems and reducing transaction costs [4][6] - Companies like Xiaohongshu and Tongcheng Group have recently acquired payment licenses, indicating a trend of internet firms consolidating payment capabilities [5][6] - The acquisition of payment licenses is seen as a strategic move to enhance compliance and facilitate future growth in e-commerce and financial services [6] Group 4 - Cross-border payment is emerging as a new growth area for payment institutions, with several players obtaining domestic payment licenses to facilitate international transactions [7][8] - Companies like Newland and Lakala have reported significant growth in cross-border payment volumes, indicating a shift in focus towards international markets [8] - Smaller institutions are expected to emphasize local compliance and operational capabilities in their overseas expansions, rather than merely replicating domestic models [9]

Industry Overview - The payment industry is entering a long-term licensing era by 2025, with a focus on its financial infrastructure attributes, shifting regulatory emphasis from cyclical reviews to institutionalized governance [1] - The domestic third-party payment industry has reached a peak in overall growth, with both transaction scale and user frequency entering a plateau phase, leading to a shift from incremental expansion to stock competition [1] - The number of payment licenses is expected to decline slowly in 2026, with smaller payment institutions lacking sustainable operational capabilities likely to exit the market [1] License Cancellation - As of December 26, 2023, the central bank has disclosed the cancellation of 11 payment licenses this year, totaling 107 licenses since the first issuance in May 2011, leaving 164 licensed payment institutions [2] - The cancellation trend has been consistent, with annual license cancellations varying from 1 to 23 over the past years [2] Structural Adjustments - The pressure to reduce the number of payment institutions may extend to bank card acquiring licenses, with many institutions lacking technical or merchant service capabilities facing limited survival space [3] - The focus of market clearing pressure is primarily on prepaid card institutions, which are experiencing a contraction in application scenarios and facing rising compliance and operational costs [3] Internet Platforms Acquiring Licenses - Internet platforms are increasingly acquiring payment licenses as they view them as essential infrastructure for building commercial ecosystems, reducing payment channel costs, and enhancing user data for future financial services [4][7] - Companies like Xiaohongshu, Tongcheng Group, and 58.com have recently acquired payment licenses to strengthen their market positions [6] Cross-Border Payment Opportunities - Cross-border payments are becoming a new focal point for growth in the domestic third-party payment market, with various players obtaining payment licenses in China [8] - Companies like Payoneer and PingPong have successfully acquired overseas licenses, indicating a trend towards international expansion [9][10] - The cross-border payment sector is expected to be a significant growth engine for many payment institutions, with substantial increases in transaction volumes reported [9][10] Future Directions - By 2026, the focus on international expansion will continue, but companies will need to adjust their strategies to include local compliance and partnerships with local wallets or banks [11] - Smaller institutions are encouraged to focus on niche markets such as cross-border education payments and overseas remittances rather than broad expansion [11]

Investment Rating - The report indicates a positive outlook on the cross-border payment industry driven by the digital renminbi, suggesting an upgrade in the investment rating for the sector [1]. Core Insights - The People's Bank of China (PBOC) is promoting the internationalization of the renminbi in conjunction with the digital renminbi, marking a transition from "scale expansion" to "structural upgrade" in the internationalization process [4][7]. - The digital renminbi enhances cross-border payment efficiency and regulatory control, providing a dual engine for the internationalization of the renminbi [4][7]. - The report emphasizes the establishment of a multi-track payment system that integrates cross-border regulation, infrastructure, and regional cooperation, which is crucial for the evolution of the digital renminbi [2][19]. Summary by Sections 1. Dual-Engine Framework Established - The PBOC has identified the steady development of the renminbi and digital renminbi as a core task for high-level financial openness, emphasizing a "dual-engine" strategy to enhance the international status of the renminbi [7]. - The cross-border payment system is being expanded, with a focus on the CIPS (Cross-Border Interbank Payment System) to better serve international trade and investment [7][9]. - The digital renminbi is positioned as a key driver for cross-border payments, particularly in small and frequent transaction scenarios, offering advantages such as decentralization, real-time settlement, and lower costs [7][9]. 2. Multi-Track Payment System Development - The multi-track payment system is evolving through cross-border regulation, infrastructure, and regional cooperation, which is essential for the digital renminbi's acceptance in international markets [2][19]. - The CIPS has expanded its reach, with 1,757 participants across 124 countries and regions, enhancing the renminbi's usability and stability in international transactions [9][10]. - The digital renminbi's design allows for real-time monitoring of cross-border fund flows, ensuring regulatory compliance while maintaining transaction efficiency [19][22]. 3. Infrastructure as Core Support for Internationalization - The CIPS serves as the backbone of the renminbi's internationalization, with a significant increase in participants since its launch in 2015, creating a robust institutional foundation for cross-border usage [9][10]. - The report highlights the comparative advantages of the CIPS over traditional systems like SWIFT, particularly in terms of transaction speed and cost efficiency [14][15]. - The digital renminbi's point-to-point settlement mechanism allows for near-instantaneous transactions, making it particularly suitable for small, high-frequency payments [15][16].

Core Insights - The integration of stablecoins and blockchain wallets is transforming payment methods, providing a stable value linked to fiat currencies and enhancing user experience in daily transactions [1][3] Group 1: Stablecoin and Wallet Integration - Stablecoins, pegged to currencies like the US dollar and euro, mitigate value volatility, making them suitable for everyday purchases [3] - Blockchain wallets serve as convenient management tools for stablecoins, allowing users to easily receive, store, and transfer funds, and some wallets enable direct conversion to local fiat currencies [3][4] Group 2: Advantages in Cross-Border Payments - Traditional cross-border payments via SWIFT incur high fees (1%-3% of transaction amounts) and take 3-5 business days, while stablecoin transfers can be completed in minutes with fees as low as $1 or even free [4] - A case study from a Yiwu exporter shows that using USDT for transactions reduced processing time from 3 days to 5 minutes and cut costs from $200 to under $10, saving nearly $10,000 annually [4] Group 3: Daily Consumption Integration - Increasing numbers of merchants are adopting stablecoin payments, with examples including restaurants in Hong Kong accepting USDC and online platforms in China allowing DAI for membership purchases [5] - Blockchain wallets are enhancing user experience with features like small-amount payments without passwords and automatic transaction record synchronization [5] Group 4: Security and Compliance - Security measures in reputable blockchain wallets include local storage of private keys, biometric authentication, and transaction limit settings to protect user assets [5] - Regulatory frameworks, such as the U.S. Stablecoin Innovation Act and Hong Kong's Stablecoin Regulation, are establishing standards for stablecoin issuance and ensuring user confidence [5] Group 5: Challenges and Future Outlook - The adoption of stablecoin payments faces challenges, including a limited number of participating merchants and user misconceptions about stablecoins [6] - As more payment institutions integrate stablecoin functionalities and wallet providers enhance user experiences, the barriers are gradually being addressed [6] - The combination of stablecoins and blockchain wallets is redefining convenient payment standards, potentially making stablecoin payments as common as current QR code payments in the near future [6]

Core Viewpoint - UnionPay International has expanded its collaboration with WeChat Pay by adding 11 new overseas wallets that support scanning domestic WeChat payment codes, enhancing payment convenience for foreign users in China [1][3]. Group 1: Expansion of Services - The newly added wallets include popular local options such as KB Pay from South Korea, ICBC Pay from Singapore, BCEL One from Laos, Social Pay from Mongolia, and PayZe Wallet from New Zealand [1][3]. - A total of 25 overseas UnionPay partner wallets now support this feature, serving users across 11 countries and regions globally [1][3]. - Since the partnership with WeChat Pay began in December 2024, the service has undergone three rounds of expansion, initially covering Hong Kong, South Korea, Thailand, and Malaysia, followed by Macau, Cambodia, and New Zealand in May 2025, and now extending to Singapore, Laos, and Mongolia [1][3]. Group 2: User Experience and Market Acceptance - Foreign users can easily bind their locally issued UnionPay physical cards or activate UnionPay's digital card feature within the partner wallets to scan WeChat payment codes in China, facilitating seamless transactions [1][3]. - The system automatically converts local currencies to RMB during payment, eliminating the need for additional user actions, thus aligning with the local payment habits of foreign users [1][3]. - In the second half of 2025, transaction volumes are expected to increase by nearly 70% compared to the first half, indicating a significant rise in market acceptance [1][3]. Group 3: Strategic Initiatives - This collaboration is part of UnionPay's "Jinxiu Action" initiative aimed at enhancing payment convenience for foreign personnel in China [2][4]. - UnionPay has introduced an innovative "four-party model" to optimize the payment environment for foreigners, integrating various stakeholders into its ecosystem [2][4]. - Currently, UnionPay has issued over 200 million cards overseas and partnered with over 200 wallets, ensuring that its payment products are universally accepted across its global network [2][4].

Core Viewpoint - Shanghai Steel Union (300226) is actively engaging in the financial support of the Western Land-Sea New Corridor, focusing on RMB pricing, cross-border payments, and digital financial cooperation [1] Group 1: RMB Pricing - The company has already implemented RMB pricing and settlement for iron ore and plans to expand this to additional products and scenarios [1] - The target proportion of RMB settlement in the platform's matching volume is expected to increase over the next 6-12 months, although specific figures for the incremental scale were not disclosed [1] Group 2: Cross-Border Payments and CIPS - Currently, the company has not partnered with banks to access CIPS or to conduct cross-border RMB agency clearing [1] - The company emphasizes its role in providing benchmark prices for various commodities, which are widely used in spot trade settlements and derivative contract settlements [1]

Investment Rating - The report assigns a "Buy" rating for the company Xiaogoods City (600415) [2] Core Insights - The company aims to become a "global first-class" comprehensive trade service provider by establishing three ecosystems: commodity display and trading, supporting services, and trade services, enhancing trade efficiency and creating value for small commodity circulation. In 2024, the company is expected to achieve a revenue of 15.74 billion yuan, a year-on-year increase of 39.3%, and a net profit attributable to shareholders of 3.07 billion yuan, a year-on-year increase of 14.9% [3][12][19] Summary by Relevant Sections Company Overview - Xiaogoods City is positioned as a leader in the small commodity market, focusing on becoming a comprehensive trade service provider. The company has established a significant market presence in Yiwu, which is the largest small commodity distribution center globally, with over 800,000 square meters of market space and 2.1 million types of products [14][19] Financial Performance - In the first half of 2025, the company reported revenues of 7.71 billion yuan, a year-on-year increase of 13.99%, and a net profit of 1.69 billion yuan, a year-on-year increase of 16.78%. The trade services segment saw a remarkable revenue increase of 43.16%, indicating that new business areas are becoming the core engine of growth [5][15][31] Market Dynamics - The Yiwu market has experienced continuous growth, with the total import and export volume reaching 668.93 billion yuan in 2024, a year-on-year increase of 18.2%. The "1039" market procurement trade model has significantly reduced customs clearance time and costs, facilitating small commodity exports [4][13][45] Digital Transformation - The company is accelerating its digital transformation through the chinagoods platform, which has registered 4.09 million buyers across over 150 countries. The platform is expected to achieve a GMV of 45 billion yuan in the first half of 2024, enhancing operational efficiency for merchants [4][12][19] Growth Opportunities - The global digital trade center project is expected to enhance the company's market position by adopting a market-oriented pricing mechanism, which will significantly improve profitability. The project aims to integrate digital services with physical trade, creating a comprehensive service platform for small commodity trade [53][61][56]

Summary of Digital Renminbi Conference Call Industry Overview - The conference call focuses on the development and future opportunities of the digital renminbi (e-CNY) in China, highlighting its current status, challenges, and potential reforms. Key Points and Arguments Current Development Status - As of June 2025, the trial transaction amount of digital renminbi has reached 12.4 trillion yuan, with a monthly transaction amount of 894.13 billion yuan in June 2025 [2][1] - The digital renminbi app has facilitated the opening of 218 million personal wallets, widely used in various scenarios such as tax payments, subsidies, retail payments, corporate settlements, government services, and public transportation [2][1] Challenges in Promotion - The issuance mechanism is not smooth, as the digital renminbi is positioned as M0, which limits direct issuance to the public and requires 100% reserve from operating institutions [3][4] - User stickiness is low, with insufficient unique advantages in core payment scenarios leading to infrequent usage compared to third-party payment tools [4][3] - The ecosystem is still underdeveloped, requiring more merchant access, payment terminal proliferation, and enhanced cooperation among financial institutions [4][5] Core Reforms Proposed - The core of the digital renminbi reform involves adjusting the currency level from M0 to M1, optimizing the management system, and establishing economic incentive mechanisms [5][6] - The reform aims to transform digital currency from cash substitutes to a part of the modern monetary system, allowing for more flexibility and innovation among market participants [5][6] Future Ecosystem Participants - Future participants in the digital renminbi ecosystem will include around 20 commercial banks, wallet operators, professional service providers, clearing systems, and end-users [6][5] Impact on Monetary Supply and Credit Activities - Currently, the digital renminbi has a negligible impact on overall monetary supply, with a monthly average balance of approximately 15 billion yuan compared to an M2 balance of about 300 trillion yuan [7][1] - The mechanism may have a contractionary effect on monetary supply, necessitating careful consideration of its potential tightening effects during large-scale promotion [7][1] Transaction-Level Issues - The design of the digital renminbi considers anonymity for user privacy, but this has led to challenges in financial integrity and increased risks of fraud [8][1] - To meet anti-money laundering requirements, a shift towards a strong real-name account system is necessary [8][1] Enhancing Operational Sustainability - To enhance the sustainability of operating institutions, several measures are proposed, including changing the M0 designation to M1, allowing interest on reserves, and enabling loan issuance through digital renminbi [9][1] - The establishment of a management committee and the separation of management and operation are also part of the strategy to improve efficiency [9][1] User Engagement and Experience - Current user engagement is low, with an average of 30 million active personal wallets per month, representing only 20% of total wallets opened [10][1] - To increase user engagement, enhancing user experience through innovative products and services is essential [11][1] Relationship with Other Digital Currencies - The digital renminbi is a central bank digital currency (CBDC) and differs significantly from stablecoins and virtual currencies, which are privately issued and considered illegal financial activities in China [10][1] Future Internationalization and Collaboration - The internationalization of the digital renminbi is a key strategic goal, aiming to reduce cross-border payment costs and enhance its role as an international reserve currency [16][1] - Collaboration with stablecoins is being explored to optimize global financial infrastructure and improve cross-border transaction efficiency [17][1] Additional Important Content - The digital renminbi's transition from M0 to M1 and eventually to M2 signifies its evolution from a payment tool to a more comprehensive financial instrument [13][1] - The potential impact on non-bank payment institutions like Alipay and WeChat Pay could reshape their roles in the payment ecosystem, creating both challenges and opportunities [14][1][15]