Core Viewpoint - The article discusses the recent performance and strategic positioning of Lianlian Digital (02598.HK) in the context of the stablecoin market and its efforts to adapt to changes in cross-border trade dynamics. Group 1: Market Performance - Lianlian Digital's stock price experienced a significant increase of 158% over nine trading days, followed by a 40% drop on the tenth day, stabilizing at 10.54 HKD as of June 27 [2] - The stock price rose approximately 65% from May 21 to June 27, following the Hong Kong Legislative Council's approval of the Stablecoin Bill [3] Group 2: Stablecoin and Virtual Asset Strategy - Lianlian Digital is actively involved in the stablecoin sector, having partnered with Yuan Coin Technology, one of the first three stablecoin issuers in Hong Kong, to develop the "Yuan Coin Wallet" [3] - The company has obtained a Virtual Asset Trading Platform (VATP) license, which positions it to expand its virtual asset financial services [4] - The stablecoin concept is seen as a key entry point for traditional finance, offering advantages in payment efficiency and cost [4] Group 3: Financial Performance - In 2024, Lianlian Digital reported total revenue of 1.315 billion CNY, a year-on-year increase of 27.9%, and achieved a profit of 78.7 million CNY, reversing a previous loss of 403 million CNY [7] - The total payment volume (TPV) reached 3.3 trillion CNY, a significant increase of 64.7% year-on-year, driven by growth in cross-border e-commerce and B2B traditional trade [8] Group 4: Strategic Adjustments - The company sold a 14.56% stake in Lian Tong Company for approximately 1.6 billion CNY, reducing its ownership to 17.63%, which alleviates the financial burden from previous losses [9] - Lianlian Digital is focusing on global expansion by acquiring local licenses and supporting transactions in over 130 currencies, aiming to mitigate risks from changing trade dynamics [13] Group 5: Industry Challenges and Opportunities - The cross-border payment sector faces challenges due to uncertain tariff policies, which may increase transaction costs and compliance risks [11][12] - Lianlian Digital plans to enhance its competitiveness through technology-driven operations and by expanding into emerging markets such as Southeast Asia and Latin America [15]

Core Viewpoint - The article discusses the emergence of stablecoins in Hong Kong, particularly focusing on the operations and strategies of Round Coin Technology, one of the first licensed issuers under the new Stablecoin Regulation. Group 1: Company Overview - Round Coin Technology was founded in 2021 and is recognized as a pioneer in compliant stablecoin initiatives in Hong Kong, with a board chaired by former HKMA president Norman Chan [6][7]. - The company has a diverse management team with backgrounds in web3, digital payments, and traditional banking, which enhances its compliance and risk management capabilities [7][8]. Group 2: Market Context - As of May 2023, the global stablecoin market reached a total market capitalization of $250 billion, growing over tenfold in the past five years [2]. - The stablecoin market in Hong Kong is expected to expand significantly as traditional enterprises begin to adopt compliant stablecoins following the regulatory framework [12]. Group 3: Business Model and Strategy - Round Coin Technology plans to enter the market through three main application scenarios: cross-border payments, licensed virtual asset exchanges, and Real World Asset (RWA) tokenization [3][11]. - The revenue model for stablecoin issuers primarily derives from interest on underlying assets, with the law stipulating that interest from reserve assets belongs to the issuer [9][8]. Group 4: Regulatory Environment - The Stablecoin Regulation in Hong Kong is set to create a compliant framework that will allow only licensed stablecoins to be used by the public, providing a competitive edge for compliant issuers like Round Coin Technology [3][12]. - The regulation also allows for multi-currency stablecoins, indicating future plans for Round Coin Technology to issue stablecoins pegged to currencies other than the Hong Kong Dollar [3][12]. Group 5: Competitive Landscape - The current market is dominated by USD-pegged stablecoins like USDT and USDC, which hold 90% of the market share. However, Round Coin Technology aims to capture market share through compliance and the introduction of various stablecoins [12][14]. - The company does not intend to compete directly with USD stablecoins but rather focuses on the untapped market potential in Hong Kong and the surrounding regions [12][13]. Group 6: Industry Impact - Stablecoins are expected to revolutionize cross-border payments, with potential cost reductions of 30% and speed improvements of 40% compared to traditional banking systems [17]. - The integration of stablecoins into the financial ecosystem can enhance the efficiency of economic operations and provide a bridge between fiat and digital currencies [18][19].

Core Viewpoint - The recent volatility in the stock prices of companies like Lianlian Digital is linked to the Hong Kong government's enactment of the Stablecoin Regulation, which establishes a regulatory framework for stablecoin issuers [3][5]. Company Insights - Lianlian Digital experienced a stock price surge of 64.27% on June 2, reaching HKD 16.46 per share, followed by a drop of 39.25% on June 3, falling to HKD 10 per share [3]. - The company holds a significant position in Hong Kong's virtual asset ecosystem, with its subsidiary DFX Labs having obtained a Virtual Asset Trading Platform license from the Hong Kong Securities and Futures Commission [5]. - Lianlian Digital reported a total payment volume of RMB 3.30 trillion in its digital payment business for the fiscal year 2024, marking a year-on-year increase of 64.7%, and total revenue of RMB 1.315 billion, up 27.9% [5]. Industry Trends - The Hong Kong Legislative Council passed the Stablecoin Regulation on May 21, which includes a licensing system for stablecoin issuers linked to fiat currencies [5]. - Several A-share listed companies are also engaging in stablecoin-related activities, with Zhongke Jincai establishing a Hong Kong subsidiary to explore stablecoin and financial innovation [6]. - Tianyang Technology is promoting a credit card product that allows for top-ups using stablecoins, indicating a growing demand for stablecoins in cross-border e-commerce and trade [6]. Market Analysis - Major securities firms, including CITIC Securities and Guotai Junan, are actively analyzing the implications of stablecoins, highlighting their potential to enhance market liquidity and facilitate cross-border payments [7]. - Stablecoins are expected to reduce transaction costs and time in cross-border payments, with the potential to bypass traditional systems like SWIFT [7]. - CITIC Jiantou suggests that compliant stablecoins could activate liquidity in traditional assets such as real estate and bonds, creating a new market worth trillions [8].

Group 1 - The core point of the article is the significant surge in the stock price of Lianlian Digital, which saw an increase of up to 147% within three trading days, driven by the Hong Kong government's new regulatory framework for virtual assets [1][4] - Lianlian Digital's stock price rose from 7.29 HKD to a peak of 18 HKD, with a notable increase of 69.66% by 15:20 on June 2 [1] - The new regulatory framework includes the establishment of a licensing system for issuers of "fiat-backed stablecoins," marking a major legislative milestone in Hong Kong [1][3] Group 2 - Lianlian Digital has a first-mover advantage in the Hong Kong virtual asset ecosystem, holding a Virtual Asset Trading Platform (VATP) license issued by the Hong Kong Securities and Futures Commission [3] - The company reported a total payment volume of 3.30 trillion RMB in its digital payment business for the year 2024, reflecting a year-on-year increase of 64.7% [4] - The overall cryptocurrency sector experienced a boost, with other companies like OKLink and New Huo Technology also seeing significant stock price increases, influenced by the strong performance of Bitcoin, which maintained a high price of 105,000 USD [4]