Investment Rating - The report assigns an investment rating of "Buy" for OSL Group, marking its first coverage [5][10]. Core Insights - OSL Group is a licensed digital asset trading and payment platform, uniquely positioned as Hong Kong's only publicly listed virtual asset exchange focused on digital asset trading and payment services. The company has obtained multiple important licenses across over 10 jurisdictions, including Hong Kong, Japan, Australia, the EU (Italy), and Bermuda [5][6]. - The company is transitioning from a single trading platform to a comprehensive digital asset financial infrastructure provider, leveraging four key advantages: the rise of payment services, significant trading fee advantages, a global compliance network, and a triad of compliance, security, and liquidity [7][68]. Summary by Sections Market Performance - As of November 19, 2025, OSL Group's closing price is HKD 15.03, with a market capitalization of HKD 11,942.77 million. The stock has seen a one-year high of HKD 20.30 and a low of HKD 6.84 [3]. Business Overview - OSL Group has developed a digital asset ecosystem comprising brokerage, payment, asset management, exchange, and institutional services. The brokerage business contributes approximately half of the revenue, while the payment business, launched only two months prior, accounted for 29% of the revenue in the first half of 2025 [6][8]. Financial Projections - The report forecasts non-IFRS revenues for OSL Group to be HKD 4.67 billion, HKD 7.64 billion, and HKD 12.20 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 119%, 64%, and 60% [8][10]. Strategic Initiatives - OSL is expanding its payment services, with OSL Pay generating significant revenue shortly after its launch. The company is also pursuing acquisitions to enhance its service offerings and expand its operational capabilities [39][69]. Competitive Positioning - OSL Group's fee structure is competitive, with trading fees ranging from 0% to 0.05%, and no deposit fees, positioning it favorably against other major platforms [73]. Regulatory Environment - The report highlights a favorable regulatory landscape for digital assets, with significant developments in compliance frameworks across various jurisdictions, enhancing the stability and credibility of the digital asset market [61][62]. Growth Drivers - The anticipated easing of monetary policy by the Federal Reserve and the establishment of clear regulatory frameworks are expected to drive growth in the digital asset sector, benefiting OSL Group as it captures institutional interest and expands its market presence [58][66].

Core Viewpoint - Tokenized money market funds (TMFs) represent a digital form of traditional money market funds, leveraging blockchain technology for enhanced traceability, transparency, and potential efficiency improvements. The market for TMFs in Hong Kong is expected to accelerate with the anticipated opening of secondary market trading [3][5][26]. Group 1: Understanding Tokenized Money Market Funds - TMFs are digital representations of traditional money market funds, where each token represents a share in the fund, maintaining similar underlying assets such as bonds and short-term deposits [7][8]. - The current TMFs in Hong Kong are primarily non-listed and only allow subscription and redemption in the primary market, with secondary market trading expected to be permitted within the year [8][10]. - The issuance of TMFs provides a dual distribution model, allowing participation through traditional brokers and digital asset platforms [7][8]. Group 2: Mechanism and Market Landscape - The operational mechanism of TMFs involves key participants such as tokenization service providers, custodians, and qualified distributors, ensuring compliance and security in managing tokenized assets [11][12]. - The TMF market in Hong Kong is rapidly developing, with various funds launched, including those by Bosera and Huaxia, covering multiple currencies [17][18][19]. Group 3: Comparison with Traditional Money Market Funds - The primary differences between TMFs and traditional money market funds include ownership recording methods, transparency levels, management fees, and transaction efficiency [20][21]. - TMFs utilize decentralized record-keeping via blockchain, enhancing transparency and reducing fraud risks compared to centralized systems of traditional funds [22]. - While TMFs currently have similar initial investment thresholds as traditional funds, future secondary market trading may lower these barriers [24][25]. Group 4: Future Prospects and Market Potential - The future of TMFs appears promising, driven by market demand, technological innovation, and regulatory clarity, with significant growth potential anticipated [26][27]. - The successful issuance of TMFs is expected to facilitate the connection between crypto assets and traditional financial assets, serving as a foundation for further tokenization in asset management [26][27]. - The market for TMFs is projected to grow significantly, with estimates suggesting that tokenized products could reach $400 billion by 2030, with TMFs being a key driver [28][32].

Core Viewpoint - Hong Kong is focusing on enhancing its digital asset infrastructure and product ecosystem following the release of favorable policies, particularly the "Hong Kong Digital Asset Development Policy Declaration 2.0" which aims to establish the city as a global innovation center for digital assets [1][2] Group 1: Digital Asset Development - The latest policy emphasizes the tokenization of Real-World Assets (RWA) and the development of stablecoins, marking a significant shift from previous virtual asset terminology [2][3] - The global tokenization market is projected to reach $16 trillion by 2030, which is approximately three times the current market value of gold [1] - The transition from virtual to digital assets reflects a broader trend in the financial landscape, driven by Web3 technologies [2] Group 2: Infrastructure and Market Dynamics - The current infrastructure for digital assets in Hong Kong is still in its early stages, with significant gaps that need to be addressed [3] - Traditional financial institutions are keen to enter the Web3 space to improve transaction efficiency and cater to a new generation of clients [2][3] - The demand for distribution channels for RWA products is high, necessitating the creation of a sales network to connect these products with clients [4] Group 3: Technological Solutions - Star Road Technology has launched the FinRWA Platform 1.0 to address infrastructure challenges, providing compliance guidance and technical support for RWA issuance [3][5] - The platform aims to bridge the gap between traditional finance and Web3, enabling the integration of virtual assets with traditional financial products [4][5] Group 4: Market Trends and Product Diversification - The most popular RWA products currently are money market funds, which play a crucial role in liquidity management and risk management in traditional finance [5][6] - The policy encourages the diversification of tokenized products, including traditional financial instruments and various asset classes such as precious metals and renewable energy [5][6] - The trend towards tokenization is seen as irreversible, with significant developments already occurring in sectors like real estate and renewable energy [5][6] Group 5: Economic Impact and Job Creation - The Hong Kong Investment Promotion Agency has attracted over HKD 160 billion in investments, creating approximately 19,000 new jobs, primarily in financial services and technology [7][8] - The Digital Port is identified as a key base for tokenization projects, fostering collaboration among stakeholders in the digital asset industry [8][9] - The Digital Port has become a hub for over 440 fintech companies, enhancing Hong Kong's position in the global digital economy [9]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - In the week of 2025.07.14 - 2025.07.18, bond yields fluctuated narrowly, with interest - rate bonds showing differentiated performance across maturities and credit bond yields declining. The equity market strengthened, and the bond market was affected by various factors such as central bank policies, tariff effects, and changes in risk preferences [3]. - The issuance of two digital currency funds by Huaxia Fund (Hong Kong) marks a breakthrough in the application of RMB assets in blockchain finance, and the tokenized currency funds have advantages over traditional ones [4]. 3. Summary by Directory 3.1 Weekly Market Observation 3.1.1 Pan - Fixed - Income Market Review and Observation - **Bond Market Review**: Bond yields fluctuated narrowly. The ChinaBond Composite Wealth Index (CBA00201) rose 0.08%, and the ChinaBond Composite Full - Price Index (CBA00203) rose 0.03%. Interest - rate bonds had differentiated performance, with mid - and short - term yields better than long - term ones. Credit bond yields declined, and credit spreads compressed [10]. - **Market Influencing Factors**: The central bank maintained a stable tax - period capital market, with a net open - market injection of 1261.1 billion yuan. The bond market was affected by factors such as stable fundamentals, under - expected incremental policies, and the stock - bond seesaw effect. The long - term US Treasury yields rose due to tariff concerns, and the REITs secondary market was suppressed by the increasing risk preference in the equity market [11][12][13]. - **Outlook and Suggestions**: The bond market's favorable environment is unlikely to reverse in the short term, but caution is advised due to potential volatility. For US Treasuries, short - term investors should wait for adjustment opportunities, and long - term investors should monitor tariff issues. For REITs, investors who have profited should consider taking profits and stay cautious [11][12][13]. 3.1.2 Public Fund Market Dynamics - Huaxia Fund (Hong Kong) issued the Huaxia US Dollar Digital Currency Fund and the Huaxia RMB Digital Currency Fund. The Huaxia RMB Digital Currency Fund is the world's first tokenized money - market fund denominated in RMB, forming a complete currency - tokenized fund series covering HKD, USD, and RMB [4]. - Tokenized currency funds have advantages over traditional ones in terms of trading time, settlement cycle, and trading channels [15]. 3.2 Pan - Fixed - Income Fund Index Performance Tracking 3.2.1 Pure - Bond Index Tracking - **Short - Term Bond Fund Preferred Index**: Aims at liquidity management, selects 5 funds with stable long - term returns, strict risk control, and significant absolute - return capabilities, and has a performance benchmark of 50% * Short - Term Pure - Bond Fund Index + 50% * Ordinary Money - Market Fund Index [17]. - **Medium - and Long - Term Bond Fund Preferred Index**: Invests in medium - and long - term pure - bond funds, selects 5 funds with both return and risk - control capabilities, and adjusts the duration and the ratio of credit - bond funds and interest - rate bond funds according to market conditions [20]. 3.2.2 Fixed - Income + Index Tracking - **Low - Volatility Fixed - Income + Preferred Index**: Has an equity center of 10%, selects 10 funds with an equity center within 15% in the past three years and recently, and has a performance benchmark of 10% CSI 800 Index + 90% ChinaBond New Composite Full - Price Index (CBA00303.CS) [23]. - **Medium - Volatility Fixed - Income + Preferred Index**: Has an equity center of 20%, selects 5 funds with an equity center between 15% - 25%, and has a performance benchmark of 20% CSI 800 Index + 80% ChinaBond New Composite Full - Price Index (CBA00303.CS) [25]. - **High - Volatility Fixed - Income + Preferred Index**: Has an equity center of 30%, selects 5 funds with an equity center between 25% - 35%, and has a performance benchmark of 30% CSI 800 Index + 70% ChinaBond New Composite Full - Price Index (CBA00303.CS) [27]. 3.2.3 Convertible Bond Fund Preferred Index Selects 5 convertible - bond funds from a sample space based on multiple evaluation criteria, including the fund's long - and short - term returns, risk - adjusted returns, and the fund manager's timing and bond - selection abilities [33]. 3.2.4 QDII Bond Fund Preferred Index Tracking Selects 6 QDII bond funds with stable returns and good risk control, whose underlying assets are overseas bonds covering various regions and types [35]. 3.2.5 REITs Fund Preferred Index Tracking Selects 10 REITs funds with stable operations, reasonable valuations, and certain elasticity, whose underlying assets are mainly high - quality infrastructure projects [37].

Market Overview - The bond market experienced narrow fluctuations last week (July 14-18, 2025), with the China Bond Composite Wealth Index (CBA00201) rising by 0.08% and the China Bond Composite Full Price Index (CBA00203) increasing by 0.03%. Short- to medium-term yields outperformed long-term yields, with 1-year, 3-year, 5-year, and 10-year government bond yields decreasing by 0.55bp, 1.56bp, 1.44bp, and 0.54bp respectively [12][14] - The central bank's liquidity support stabilized the funding environment during the tax period, leading to a strong equity market and fluctuating bond yields. The central bank injected a net of 12,611 billion yuan into the market, with 17,868 billion yuan in injections and 5,257 billion yuan in withdrawals [14] - The long-end U.S. Treasury yields rose due to concerns over inflation driven by tariff issues, while short-end yields remained stable under the expectation of interest rate cuts [15] Public Fund Market Dynamics - Huaxia Fund Management Company (Hong Kong) launched the world's first RMB-denominated tokenized money market fund, marking a significant advancement for RMB assets in the blockchain financial application sector. This fund series includes USD, HKD, and RMB tokenized funds [17][18] - The new fund series adopts a dual distribution model, allowing investors to transact through traditional financial institutions and licensed virtual asset trading platforms [17][19] Fund Performance Tracking - Short-term bond funds rose by 0.05% last week, with a cumulative return of 4.08% since inception [3] - Medium- to long-term bond funds increased by 0.08%, achieving a cumulative return of 6.64% since inception [4] - Low-volatility fixed income plus funds rose by 0.17%, with a cumulative return of 3.01% since inception [5] - Medium-volatility fixed income plus funds increased by 0.36%, with a cumulative return of 2.71% since inception [6] - High-volatility fixed income plus funds also rose by 0.36%, achieving a cumulative return of 3.99% since inception [7] - Convertible bond funds increased by 0.78%, with a cumulative return of 12.56% since inception [8] - QDII bond funds decreased by 0.18%, with a cumulative return of 7.80% since inception [9] - REITs funds rose by 0.35%, achieving a cumulative return of 37.68% since inception [10]

Core Insights - The launch of the "Huaxia Renminbi Digital Currency Fund" marks the world's first tokenized fund denominated in Renminbi, filling a market gap and supporting Hong Kong's ambition to become a global virtual asset center [1][2][3] - Tokenized funds utilize blockchain technology to represent ownership through digital tokens, enhancing transparency and enabling trading on compliant virtual asset platforms [2][6] - The fund aims to contribute to the internationalization of the Renminbi and meet the growing market demand for Renminbi-denominated products [3][4] Industry Developments - The tokenized fund market is expanding, with projections indicating that the global tokenized currency fund market could exceed $400 billion by 2030 [4] - Hong Kong's government has been actively promoting financial innovation and asset tokenization, establishing a regulatory framework to support the development of tokenized funds [5][6] - The introduction of the "Huaxia Renminbi Digital Currency Fund" is part of a broader strategy to diversify asset allocation options for investors, with the fund being one of three tokenized funds launched by Huaxia Fund (Hong Kong) [2][3][7] Market Dynamics - The fund employs a "traditional + digital" dual distribution model, involving six distributors, including four securities firms and a licensed virtual asset exchange [2][6] - The increasing adoption of tokenized funds is seen as a significant entry point for institutions into digital assets, with traditional financial institutions exploring opportunities in the cryptocurrency space [6][7] - The launch of this fund is expected to drive further exploration of investment strategies and asset tokenization in the coming years, with a focus on enhancing operational processes through blockchain technology [7]

Core Insights - 华夏基金 (Hong Kong) has launched its second batch of tokenized funds, including the 华夏美元数字货币基金 and 华夏人民币数字货币基金, with the latter being the world's first tokenized fund denominated in RMB [1][2] - The series of tokenized funds aims to provide long-term returns in line with current money market rates by investing in short-term deposits and high-quality money market instruments [4] - The global market for tokenized currency funds is projected to exceed $400 billion by 2030, driven by increasing institutional interest in digital assets [8] Group 1: Fund Characteristics - Tokenized funds utilize a "traditional + digital" dual distribution model, allowing investors to transact through both traditional channels and licensed virtual asset trading platforms (VATPs) [1][4] - Unlike traditional funds, tokenized funds exist as blockchain digital tokens, enabling real-time verification of ownership and high transparency as all transactions and holdings are permanently recorded on-chain [4][5] - The operational infrastructure of tokenized funds is based on blockchain technology, reducing intermediaries and enhancing efficiency compared to traditional funds that rely on centralized systems [4] Group 2: Market Trends and Predictions - The demand for compliant on-chain yield products is growing, particularly among cryptocurrency investors, as regulated on-chain funds and central bank digital currencies (CBDCs) become more prevalent [8][9] - The total value of tokenized non-liquid assets is expected to reach $16 trillion by 2030, indicating a significant shift towards asset tokenization in the financial sector [8] - The recent approval of the "Stablecoin Bill" in Hong Kong is expected to facilitate the entry of stablecoins into the market, further enhancing the tokenized financial ecosystem [9]

Core Viewpoint - The legalization of stablecoins in Hong Kong is driving the continuous expansion of the stablecoin industry chain, with RWA (Real World Assets) issuers, consulting/technical support service providers, and cross-border payment companies being the primary beneficiaries [1] Group 1: Opportunities and Challenges in RWA - The global market size of on-chain RWA assets reached $24.83 billion as of July 6, 2025 [1] - Opportunities include physical assets like computing centers and parking lot revenue rights, financial products such as commercial paper and credit bonds, and intangible assets like intellectual property [1] - Challenges include unclear regulatory details for mainland companies' RWA asset rights in Hong Kong, the limitations of private placement methods for RWA, and issues related to market liquidity and future revenue rights for intangible asset RWAs [1] Group 2: Traditional Financial Institutions' Participation - Traditional financial products are accelerating the tokenization process, with HSBC and Huaxia Bank launching tokenized products in 2025 [2] - Opportunities exist for banks, securities, and fund companies to leverage their existing customer bases to enter the stablecoin issuance, custody, and digital asset trading services [2] - Challenges include potential impacts on traditional banking operations and the uncertainty surrounding the implementation of the stablecoin legislation in Hong Kong [2] Group 3: Stablecoin Applications in Cross-Border Payments - Stablecoins are expected to enhance efficiency and reduce costs in cross-border payment scenarios, with transaction fees ranging from $0.5 to $5 and exchange costs at about 0.1% of the transaction amount [3] - Opportunities for cross-border payment companies to engage in stablecoin issuance, trading, and market-making roles [3] - Challenges include the inability for enterprises to enjoy export tax refund policies and financing policies when using stablecoins for cross-border payments [3] Group 4: Investment Recommendations - Focus on RWA projects that have been implemented in Hong Kong and companies that can provide platform services or have new asset tokenization opportunities [4] - Financial IT companies that can participate in the construction of stablecoin-related systems for financial institutions are also recommended [4] - Payment IT companies that can launch stablecoin-related services to enhance overseas transaction volumes and fee rates should be considered [4]

Group 1 - The Hong Kong financial market has seen a strong recovery since 2025, with IPO financing exceeding HKD 100 billion, positioning Hong Kong as a key area for the revaluation of Chinese assets [2][3] - CITIC Group's subsidiaries, CITIC Securities and CITIC Construction Investment, have led the market by servicing 22 companies for A-share and H-share listings, raising over CNY 27 billion [2][3] - The Hong Kong Stock Exchange has optimized its listing pricing mechanism and introduced a "special line for tech companies" to facilitate the rapid listing of strategic emerging industries [3][4] Group 2 - CITIC Securities assisted BYD in completing a USD 5.6 billion H-share placement, marking the largest equity refinancing project in the global automotive industry in the past decade [4] - CITIC Construction Investment helped CATL achieve a record-breaking IPO on the Hong Kong Stock Exchange, taking only 98 days from application to listing, setting multiple records in the process [4] - The Hong Kong market has attracted numerous consumer brands due to its flexible listing mechanisms, with CITIC Securities supporting several new consumer enterprises in their listings [4] Group 3 - In the offshore bond market, CITIC institutions have ranked first in both the number and scale of underwriting Chinese offshore bond projects from January to June 2025 [5] - CITIC Securities facilitated the issuance of a CNY 4 billion offshore RMB bond by State Grid, setting records for the largest and longest-term issuance by a central enterprise [5] - The issuance of offshore RMB green bonds by Hungarian Savings Bank, supported by CITIC Securities, represents a significant step in promoting the internationalization of the RMB [5] Group 4 - The global asset allocation landscape is rapidly changing, highlighting the global investment value of RMB assets, which presents structural opportunities for cross-border wealth management [6] - CITIC Group has established a cross-border wealth management committee to enhance financial connectivity, focusing on bond and stock connections [6] - CITIC Futures International provides brokerage services for over 400 futures and options products across 29 major global exchanges, leading in key operational metrics among Chinese peers in Hong Kong [6]

Group 1 - The core viewpoint is that the implementation of the Hong Kong Stablecoin Regulation on August 1 marks the beginning of a trillion-dollar market, prompting major public fund institutions to cautiously explore this new financial ecosystem while actively advancing their business layouts [2][4][9] - Major public fund institutions are adopting a dual approach, focusing on both business development and maintaining a prudent attitude towards the emerging investment landscape [2][11] - Compliance is emphasized as a critical factor in navigating the new investment environment, with institutions acknowledging the need to find their positioning and establish differentiated competitive advantages [2][4][11] Group 2 - The heat surrounding stablecoins is increasing as the regulation's effective date approaches, with significant stock price movements observed in related companies, such as Guotai Junan International, which saw a 198% increase [3] - The rise of stablecoins is expected to lead to a transformation in trading methods and financial infrastructure, with predictions of a 24/7 trading environment enabled by blockchain technology [6][9] - The potential for tokenization of real-world assets (RWA) is highlighted, with ongoing explorations into how stablecoins can facilitate transactions and improve efficiency in both virtual and traditional asset markets [4][6][9] Group 3 - The regulatory framework established by Hong Kong is seen as a significant step towards providing the necessary regulatory certainty for the stablecoin industry, which is crucial for fostering innovation in the financial sector [4][10] - Institutions are actively participating in sandbox initiatives to test new digital currency models and tokenized asset transactions, indicating a collaborative effort to explore the future of finance [9][10] - The introduction of virtual asset ETFs by major public funds in Hong Kong represents an initial attempt to engage with virtual currency assets, showcasing the growing interest and involvement of Chinese asset management firms in this space [10]