Core Insights - The market is witnessing significant activity in the stablecoin sector, highlighted by Coinbase's negotiations to acquire BVNK for approximately $2 billion, a valuation that has increased from $750 million in just one year [1][3] - OwlTing Group, which has transitioned from blockchain traceability to fintech, has recently gone public without raising new capital, achieving a market cap of around $4.9 billion at its peak, although it has since dropped to the $1 billion range [3][4] - The stablecoin industry is evolving into a critical component of global payment infrastructure, with regulatory frameworks being established in various jurisdictions, including the U.S. and the EU [10][11] Company Overview - OwlTing Group, founded in 2010, initially focused on blockchain traceability and e-commerce but pivoted to fintech post-pandemic, developing products like OwlPay and OwlPayHarbor [3][4] - The company has secured Money Transmitter Licenses (MTL) in 40 U.S. states and has registered in Japan, the EU, and Southeast Asia, positioning itself as a compliant cross-border settlement network operator [3][5] - OwlPay aims to provide a one-stop solution for businesses, facilitating T+0 settlement with a target fee rate of 0.5%, supporting multiple currencies including USDC, USD, EUR, and JPY [19][22] Market Dynamics - The global cross-border payment market is projected to grow significantly, with estimates suggesting it could exceed $1 trillion by 2029, driven by demand for faster and cheaper payment solutions [13] - Stablecoin payments are expected to see explosive growth, with projections indicating a payment volume of $28 billion by 2025, reflecting an increase of over 800 times from 2022 [11][13] - The competitive landscape for stablecoin clearing is evolving, with companies like OwlTing, BVNK, and Bridge representing different strategic approaches to capturing market share [23][24] Strategic Partnerships - OwlTing has partnered with Visa to integrate OwlPay into Visa's global network, allowing for stablecoin transactions across over 85 billion payment endpoints [5][25] - This partnership signifies a shift in traditional payment systems, as Visa incorporates stablecoin capabilities into its offerings, enhancing OwlTing's market position [5][25] Financial Performance - For the fiscal year 2024, OwlTing reported revenues of $7.57 million, an 18% year-over-year increase, but also incurred a net loss of $10.27 million [4][26] - The company's revenue model is primarily driven by B2B settlement services, which account for approximately 60% of total revenue, with a take rate between 1% and 3% [22][26] Future Outlook - The stablecoin sector is anticipated to play a pivotal role in the future of global payment networks, with projections indicating that stablecoins and tokenized cash will become core channels by 2030 [10] - OwlTing's positioning as a compliant cross-border clearing network could enable it to capture significant market share as the demand for efficient payment solutions continues to rise [27]

Core Viewpoint - The stablecoin sector is experiencing significant developments, with Coinbase negotiating a $2 billion acquisition of BVNK, which has seen its valuation increase from $750 million to $2 billion in just one year. Additionally, OwlTing Group has gone public, marking a notable entry into the financial technology space focused on stablecoin settlement [1][4][6]. Group 1: Company Developments - OwlTing Group, founded in 2010, transitioned from blockchain traceability and travel e-commerce to financial technology, launching OwlPay and OwlPayHarbor for stablecoin settlement [4]. - OwlTing's stock debuted at a reference price of $10, surged to $68, and closed at $55.55, giving it a market cap of approximately $4.9 billion, although it has since fallen to around $1 billion [4][5]. - The company has obtained Money Transmitter Licenses (MTL) in 40 U.S. states and has registered in Japan, the EU, and Southeast Asia, positioning itself as a compliant cross-border settlement network operator [4][5]. Group 2: Financial Performance - For the fiscal year 2024, OwlTing reported revenues of $7.57 million, an 18% year-over-year increase, but incurred a net loss of $10.27 million [5][22]. - The primary revenue source for OwlPay is B2B settlement services, accounting for about 60% of total revenue, with a take rate between 1% and 3% [22]. Group 3: Market Trends and Opportunities - The stablecoin market is projected to reach a total market value of approximately $261 billion by 2025, with stablecoin payment volumes expected to grow significantly [7][10]. - Visa has integrated OwlPay into its global network, allowing OwlTing to leverage over 8.5 billion payment endpoints, covering more than 190 regions and 160 currencies [5][23]. - The global cross-border third-party payment market is estimated to reach $1 trillion by 2029, with stablecoins providing a more efficient and cost-effective solution for businesses [11][14]. Group 4: Competitive Landscape - The stablecoin clearing sector is evolving, with different companies like BVNK, Bridge, and OwlTing representing various approaches to integrating stablecoins into traditional financial systems [23]. - OwlTing's model focuses on building a compliant cross-border clearing network, distinguishing itself from traditional financial institutions and other fintech players [23][25]. - The company aims to connect blockchain and global payment systems, similar to how PayPal connected the internet with the dollar system two decades ago [30].

Investment Rating - The report maintains a "Recommendation" rating for Nanhua Futures, with a target price of 30.76 CNY [2][7]. Core Views - Nanhua Futures has expanded its cross-border clearing licenses, now holding 12 overseas clearing memberships, enhancing its global clearing capabilities [7][11]. - The company's overseas business is identified as the core driver of profit growth, with overseas interest income increasing from 0.03 million CNY in 2021 to 4.98 million CNY in 2024, reflecting a CAGR of +468% [7][12]. - The anticipated IPO in Hong Kong is expected to bolster the capital of its Hong Kong subsidiary, accelerating international expansion and mitigating the impact of declining overseas interest rates on net profit [7][8]. Financial Performance Summary - Total revenue for 2024 is projected at 5,711.61 million CNY, with a year-on-year growth rate of -8.6%. Revenue is expected to increase to 7,351.48 million CNY in 2025, representing a growth rate of 28.7% [8]. - The net profit attributable to the parent company is forecasted to be 457.97 million CNY in 2024, with a growth of 14.0%, and is expected to reach 536.11 million CNY in 2025, with a growth rate of 17.1% [8]. - Earnings per share (EPS) are projected to be 0.75 CNY for 2024, increasing to 0.88 CNY in 2025, and further to 1.08 CNY by 2027 [8][12]. Business Structure and Strategy - Nanhua Futures operates through its wholly-owned subsidiary, Honghua International, which has multiple specialized subsidiaries covering global markets [7][11]. - The company holds various licenses in Hong Kong, which may allow it to provide virtual asset services, potentially creating a global trading ecosystem that combines commodity futures and digital assets [7][8].

Industry Insights - The People's Bank of China and the Hong Kong Monetary Authority have launched the "Cross-Border Payment Link," which connects the mainland online payment interbank clearing system with Hong Kong's "Faster Payment System," officially going live on June 22 [1] - The system allows residents from both regions to conveniently conduct real-time cross-border remittances in Renminbi and Hong Kong dollars via mobile numbers or bank accounts, covering scenarios such as salary payments and tuition fees [1] - The introduction of the "Cross-Border Payment Link" opens new avenues for the compliant application of stablecoins, potentially serving as a technical template for regulated stablecoin cross-border circulation [1] - The policy direction is expected to support the cross-border payment industry in unlocking new growth opportunities, enhancing the functions and scope of CIPS, and promoting high-level opening-up through free trade zone pilot projects [1] - The global perspective indicates that the compliance process of stablecoins is likely to drive the restructuring of the global payment system, with stablecoin payments offering significant advantages in cost and efficiency compared to traditional cross-border payment methods [1] Company Developments - Zhongyi Technology announced on June 9, 2023, that it is involved in the IT infrastructure construction for clients' digital currency systems and provides operational maintenance services for the related IT infrastructure [2] - Sanwei Xinan is leading the formulation of the "GM/T 0111-2021 Blockchain Cryptography Application Technical Requirements," leveraging its accumulated expertise in blockchain technology, with related products already applied in digital currency operations [2] - The company emphasizes the importance of blockchain technology in ensuring the security and credibility of transactions in digital currency, committing to ongoing research and implementation of blockchain and digital currency technologies to promote financial innovation and safeguard data privacy and security [2]