Group 1 - The company, Yili Holdings, announced a financing plan through the issuance of zero-coupon convertible bonds totaling HKD 19,950,000 (approximately HKD 20 million) [1] - The initial conversion price of the bonds is set at HKD 0.25, representing a premium of about 2.4% over the closing price of HKD 0.244 on July 17, 2025 [1] - Upon full conversion, the bonds will result in the issuance of 79,800,000 shares (approximately 8 million shares), which will account for about 18.4% of the existing issued share capital and approximately 15.6% of the enlarged share capital [1] Group 2 - The proceeds from the financing will be used for the development of Web 3.0 projects, with approximately HKD 20 million allocated for this purpose [1] - Yili Holdings' main business includes investment holding, global sales of graphite products, manufacturing and sales of electronic products, and the design and manufacturing in the UK [1]

Core Viewpoint - The rise of "stablecoins" has led to an increase in illegal activities, with fraudulent entities using the concept to attract investments under the guise of financial innovation and high returns [1][2][3]. Regulatory Concerns - Financial regulatory bodies in multiple regions have observed that some illegal institutions are exploiting terms like "financial innovation," "digital currency," and "blockchain technology" to promote investment projects that promise high returns, thereby luring the public into trading and speculation [2][4]. - These activities are seen as potential illegal financial operations that can lead to illegal fundraising, fraud, and money laundering, which disrupts economic and financial order [3][4]. Risk Warnings - Regions such as Henan and Zhejiang have issued risk warnings regarding illegal fundraising under the guise of stablecoins, urging the public to avoid such financial activities [4][5]. - The Beijing Internet Finance Industry Association has identified characteristics of illegal fundraising projects involving "virtual currencies" and "stablecoin investment projects," including lack of qualifications, misleading promises, and risk overflow [4]. Legal Framework - The illegal institutions lack the necessary qualifications to publicly solicit deposits, as they operate without approval from national financial management departments [5]. - There are no legal venues for virtual currency trading within China, and engaging in overseas virtual currency transactions poses risks to investors, who bear the losses themselves [5][6]. Judicial Challenges - The prohibition of virtual currency financial transactions in China has led to exchanges relocating overseas, complicating law enforcement and evidence collection [7]. - Courts face challenges in executing cases involving virtual currencies due to insufficient legal frameworks, necessitating improved judicial collaboration and execution mechanisms [7]. Regulatory Developments - As the market value and circulation of stablecoins increase, discussions on their regulation are becoming more urgent, with countries like the U.S. and Hong Kong implementing relevant regulations [8]. - There is a pressing need to explore regulatory pathways for stablecoins that align with China's national context to ensure financial security and stability [8].

Core Viewpoint - The stablecoin concept has gained significant attention in the capital market due to favorable policies, leading to remarkable stock price increases for several companies in this sector [2][3]. Group 1: Company Performance - As of July 16, 2023, the stock of 加幂科技 has surged by 1040%, making it a "10x bull stock" [2]. - Other Hong Kong stocks related to stablecoins have also seen impressive gains, with 耀才证券金融 up 497.37%, 国泰君安国际 up 480.10%, and 金涌投资 up 351.93% [3]. - In the A-share market, 恒宝股份 has increased by 250.01%, while 四方精创 and 楚天龙 have risen by 163.11% and 115.10%, respectively [3]. Group 2: Industry Trends - The rise in stablecoin stocks is attributed to the increasing interest in Web3.0 and blockchain technologies, particularly as the cryptocurrency market recovers [2]. - 加幂科技 has been actively investing in Web3.0-related businesses, including the development of on-chain data analysis platforms and DEX aggregators [2]. - The current market sentiment is driven by future expectations rather than actual business performance, indicating that many companies are still in the early stages of stablecoin-related business development [4]. Group 3: Analyst Insights - Analysts caution that while the stablecoin concept is currently popular, many companies lack substantial business performance disclosures related to stablecoins, leading to speculative trading based on future expectations [4]. - There is a warning against blindly chasing high stock prices, as some companies may be experiencing inflated valuations without solid business foundations [4]. - Investors are advised to focus on companies with advanced technology, leading market shares, and strong management for sustainable investment opportunities [4].

Group 1 - The concept of "stablecoins" has recently gained attention, leading to an increase in illegal activities using this term as a lure [1][2] - Financial regulatory authorities in multiple regions, including Henan and Zhejiang, have issued risk warnings regarding illegal fundraising activities disguised as stablecoin investments [2][3] - These illegal institutions often lack proper qualifications and use misleading concepts to attract public investment, promising high returns and creating information asymmetry [2][4] Group 2 - There are currently no legal virtual currency trading venues in China, and engaging in overseas virtual currency trading lacks consumer protection, leaving investors to bear their own losses [3] - The People's Bank of China and other departments have clarified that virtual currencies do not have the same legal status as fiat currencies and should not be circulated as money [4][6] - The exploration of regulatory pathways for stablecoins that align with China's national conditions is deemed urgent and necessary due to the increasing market value and circulation of stablecoins [6] Group 3 - A new channel for handling overseas virtual currencies has been established by the Beijing Municipal Public Security Bureau, allowing for the disposal of seized virtual currencies through the Beijing Stock Exchange [5] - This process involves professional service institutions for detection and transfer, followed by public sale through compliant overseas exchanges, ensuring adherence to foreign exchange management regulations [5]

Core Viewpoint - The article highlights the rising illegal activities associated with "stablecoins," as various financial regulatory bodies have issued warnings against fraudulent schemes that exploit the concept of stablecoins to attract investments and promise high returns [1][2][4]. Group 1: Regulatory Warnings - Multiple financial regulatory departments in regions such as Henan, Zhejiang, Beijing, Shenzhen, and Chongqing have issued risk alerts regarding illegal fundraising activities disguised as stablecoin investments [2][4]. - These warnings emphasize that stablecoins should not be considered investment or speculative tools, and that unauthorized institutions lack the qualifications to publicly solicit deposits [2][4][5]. Group 2: Characteristics of Fraudulent Activities - Fraudulent institutions often use terms like "financial innovation," "digital assets," and "blockchain technology" to mislead the public into participating in trading and speculation [2][4]. - Common characteristics of these illegal fundraising projects include lack of qualifications, concept packaging, false promises, and the operation of funds in pools, which create information asymmetry to confuse investors [4][5]. Group 3: Legal Context and Challenges - In China, virtual currency-related activities are classified as illegal financial activities, and participants in such investments face legal risks [6]. - The absence of domestic virtual currency trading venues and the shift of exchanges overseas complicate law enforcement and the handling of involved virtual currencies [7]. Group 4: Need for Regulatory Framework - As the market value and circulation of stablecoins continue to grow, there is an urgent need to explore regulatory paths for stablecoins that align with China's national conditions [8][9].

Summary of Stablecoin Industry Analysis Industry Overview - The stablecoin industry has evolved significantly since its inception in 2014, with major developments occurring from 2017 to 2022, leading to a market size of approximately 2.5 trillion yuan, with an annual transaction volume exceeding 20 trillion yuan [2][14]. Key Developments - The first stablecoin linked to the US dollar was launched in 2014, followed by the introduction of decentralized assets in 2017-2018, marking a shift in the market [1]. - The launch of USDC and Meta's Libra (later denied by regulators) were pivotal moments in the evolution of stablecoins [1][2]. - The period from 2020 to 2022 saw a boom in stablecoins, driven by financial tools and platforms based on Web 3.0 blockchain technology [2]. Regulatory Landscape - The regulatory frameworks in the U.S. and Hong Kong are evolving, with both regions requiring licenses for stablecoin issuance. However, the U.S. has a more complex regulatory structure involving both federal and state levels [3][4]. - Hong Kong has recently passed the Monetary Fund Law, allowing institutions to apply for stablecoin issuance licenses, with a three-month window for temporary licenses [6][7]. Market Dynamics - The U.S. stablecoin market is characterized by a one-to-one reserve requirement with legal assets, while Hong Kong's regulations allow for more flexibility in asset settlement [4][5]. - The liquidity of the U.S. dollar is expected to be more freely distributed compared to the Hong Kong dollar, which is still under observation for its implementation mechanism [6]. Future Trends - The approval of stablecoins is anticipated to lead to significant changes in the industry, including increased integration with AI and smart contracts, enhancing transaction efficiency and reducing costs [11][12]. - The potential for real-world asset (RWA) transactions on-chain is significant, particularly for U.S. stocks and bonds, which could reshape asset configurations and trading dynamics [13][14]. Investment Opportunities - The stablecoin market presents a substantial opportunity for traditional financial institutions to engage with blockchain technology, potentially leading to increased capital inflow and market prosperity [15]. - The upcoming listing of major stablecoin issuers and the sandbox testing phase in Hong Kong may drive further interest and investment in the sector [7][8]. Conclusion - The stablecoin industry is at a critical juncture, with regulatory clarity and technological advancements paving the way for broader adoption and integration into the global financial system. The potential for growth remains vast, particularly as traditional financial institutions begin to embrace these digital assets [15].

Summary of Conference Call on Stablecoins and Virtual Assets Industry Overview - The discussion revolves around the development of stablecoins, particularly in Hong Kong, and their implications for the broader virtual asset market [1][2][3] - The stablecoin legislation in Hong Kong was passed on May 17, exceeding market expectations, and is progressing faster than similar legislation in the United States [2][3] Key Points and Arguments - **Importance of Stablecoins**: Stablecoins serve as a crucial component in the global virtual asset ecosystem, facilitating transactions between traditional fiat currencies and blockchain technology [6][7][8] - **Market Trends**: The virtual asset market is witnessing a significant trend towards regulatory approval and the issuance of trading licenses, with companies like OSL and Hashkey leading the way [3][4][5] - **Role of Financial Institutions**: Traditional financial institutions are increasingly participating in virtual asset trading, indicating a shift in the financial landscape [4][10] - **Impact on Cross-Border Transactions**: Stablecoins can simplify cross-border transactions and provide a hedge against inflation, particularly in regions with unstable currencies [8][9][20] Potential Investment Opportunities - **Asset Trading Platforms**: Companies like Coinbase and Robinhood are benefiting from the growing acceptance of virtual assets, with significant trading volumes reported [12][13] - **Stablecoin Issuers**: Major stablecoins like USDT and USDC have substantial market capitalizations, indicating a robust demand for stablecoin solutions [14][19] - **Emerging Players**: New entrants in the stablecoin space, such as Yuan Coin Technology and Standard Chartered, are actively participating in regulatory sandboxes, suggesting potential growth opportunities [15][21] Additional Insights - **Technological Advancements**: The integration of Web 3.0 technologies is expected to enhance the functionality and adoption of stablecoins [24] - **Ecosystem Development**: Companies are building comprehensive ecosystems around stablecoins, which may lead to increased user engagement and transaction volumes [23] - **Regulatory Landscape**: The evolving regulatory environment in Hong Kong is seen as favorable for the growth of virtual assets and stablecoins, positioning the region as a key player in the global market [11][32] Conclusion - The stablecoin market is poised for significant growth, driven by regulatory advancements, technological innovations, and increasing participation from traditional financial institutions. Continuous monitoring of developments in this space is essential for identifying investment opportunities and understanding market dynamics [33]

Core Viewpoint - LianLian Digital, a leading cross-border digital payment platform in China, has achieved robust growth through global expansion and technological innovation, with plans for an IPO on the Hong Kong Stock Exchange in 2024 to enhance its international competitiveness [1] Financial Performance - The company has built a payment network covering seven core global markets since its establishment in 2009 [1] - From 2020 to 2024, the revenue CAGR is projected to be 22%, with the core global payment business maintaining a gross margin above 70% [1] - Despite short-term pressure on overall gross margin due to business restructuring, losses have been continuously narrowing [1] - In 2024, total revenue is expected to reach 1.315 billion yuan, with global payment business revenue growing by 23.1% year-on-year to 808 million yuan and TPV exceeding 281.5 billion yuan [2] Market and Policy Environment - The payment industry is entering a new phase of compliance and digitalization driven by both policy and market forces [1] - The State Council of China issued the "Regulations on the Supervision and Administration of Non-Bank Payment Institutions" in 2023, which raises entry barriers and strengthens regulation, favoring capital-rich companies [1] - According to Frost & Sullivan, the global cross-border e-commerce GMV is expected to grow at a CAGR of 19.3%, with China's digital payment market TPV projected to reach 354.1 trillion yuan by 2027 [1] - LianLian Digital holds a 9.1% market share as the largest independent payment provider in China, leveraging its licensing advantages [1] Innovation and Strategic Development - The company is enhancing its leading position in cross-border payments through high R&D investment and strategic partnerships [2] - It is exploring next-generation payment solutions using Web 3.0 and stablecoin technologies, indicating a strategic shift from a payment service provider to a digital ecosystem platform [2] - The passage of the "Stablecoin Regulation Draft" in Hong Kong is expected to further drive industry innovation, providing merchants with new opportunities for rate optimization and business closure [1]

Investment Rating - The report maintains a "Positive" investment rating for the software and services industry [10]. Core Insights - The increasing focus on stablecoins by various cities indicates a growing acceptance of financial innovation, with the exploration of the Renminbi stablecoin expected to gain momentum [12][12]. - Shanghai is positioned to lead the innovation in Renminbi stablecoins, supported by recent financial policies aimed at enhancing its international financial center status [12][12]. - The upcoming implementation of the stablecoin regulations in Hong Kong is anticipated to provide a valuable reference for the development of Renminbi stablecoins in mainland China [12][12]. Summary by Sections Event Description - On July 10, a learning session was held by the Shanghai State-owned Assets Supervision and Administration Commission, focusing on the trends and strategies related to cryptocurrencies and stablecoins [5][5]. Event Commentary - The report highlights that stablecoins are becoming integral to mainstream financial infrastructure, facilitating inter-institutional fund transfers, corporate financial settlements, and cross-border trade payments [12][12]. - Multiple cities, including Chengdu, Wuxi, and Qingdao, are accelerating their research on stablecoins, reflecting a broader recognition of the global trend towards stablecoin adoption [12][12]. - The report suggests monitoring investment opportunities related to stablecoins, particularly companies with issuance qualifications, technological expertise in blockchain, and relevant licenses [12][12].

Core Insights - The Web3.0 industry faced a significant increase in security incidents in Q1 2025, with a total of 197 on-chain security events resulting in approximately $1.669 billion in losses, marking a 303.38% increase compared to the previous quarter [1][9][20] - Wallet theft emerged as the primary threat, accounting for nearly 87% of total losses, with just three wallet-related incidents causing around $1.451 billion in damages [1][9][21] - Ethereum was identified as the most affected blockchain, with 98 incidents leading to losses of approximately $1.541 billion, driven by its extensive use in DeFi and smart contracts [1][9][23] Incident Breakdown - The Bybit exchange experienced the largest security breach in Web3.0 history on February 21, 2025, with approximately $1.45 billion stolen due to a sophisticated attack that manipulated transaction approvals [2][25] - Other notable incidents included Phemex, which lost about $71.7 million due to private key leakage, and 0xInfini, which suffered a loss of approximately $49.5 million due to an administrator privilege vulnerability [2][26][27] - Phishing attacks were prevalent, with 81 incidents resulting in losses of around $1.579 million, highlighting the need for improved user security education [3][21] Recovery and Regulatory Actions - The industry struggled with fund recovery, managing to recover only $6.39 million, which is 0.38% of total losses, significantly lower than the previous quarter's recovery rate of 42.09% [3][18][21] - Regulatory developments included the establishment of a Strategic Cryptocurrency Reserve by the U.S. government and the formation of a special task force by the SEC to provide clearer regulatory guidance [3][20][21] Security Challenges and Innovations - The Web3.0 sector is grappling with complex security challenges as attackers employ advanced techniques, including social engineering and AI [4][23] - Innovations such as zero-knowledge proofs, on-chain evidence tools, and multi-party computation wallets are being explored to enhance security measures [4][23]