Huayuan Securities: First-rate OSL GROUP (00863) with a "buy" rating for its continued development of a comprehensive platform for digital asset trading and payment.

Huayuan Securities released a research report stating that it has initiated coverage on OSL GROUP (00863) with a "buy" rating. OSL GROUP is a leading licensed digital asset trading and payment platform in Hong Kong, with a diversified business ecosystem including brokerage, payment, and exchange. The payment business (OSL Pay) has become a new growth engine, contributing 29% of revenue within just two months of its launch in the first half of the year. With a global compliance license layout, secure banking direct connection system, and liquidity advantage, the company is accelerating its transformation into a digital asset financial infrastructure. It is expected that revenue will grow rapidly from 2025 to 2027. Key points from Huayuan Securities: Company background: OSL GROUP is a licensed digital asset trading and payment platform. It is the only listed virtual asset trading platform in Hong Kong that focuses on digital asset trading and payment. OSL GROUP has obtained multiple important licenses through continuous acquisitions and currently operates in more than 10 jurisdictions including Hong Kong, Japan, Australia, the EU-Italy, and Bermuda. Business performance: OSL has developed a digital asset ecosystem consisting of brokerage, payment, asset management, exchange, and institutional business. The revenue is mainly contributed by brokerage and payment businesses. The brokerage business provides OTC and RFQ services, while the payment business offers deposit and withdrawal services for web3 wallet customers. The asset management business mainly provides distribution, custody, and technical services for token funds. The exchange business currently offers trading services for over 20 types of virtual assets. The institutional business focuses on virtual asset trading for customers with upgraded brokerage licenses. Market opportunities: Changes in monetary policy, clarity in global regulatory frameworks, and institutional capital inflows bring good development opportunities to the digital asset industry. OSL is a rare target in the capital market. The loose monetary policy may inject liquidity into the market, and the landing of key regulatory laws in places such as the EU, the US, and Hong Kong may ensure compliance and regulation in the industry. Furthermore, the allocation of funds from traditional financial institutions to related products may expand the market. Four advantages of OSL's transformation: OSL is accelerating its transformation from a single trading platform to a comprehensive digital asset financial infrastructure provider. The company has four advantages: 1) the rise of the payment business, 2) significant advantages in transaction fees, 3) a global compliance network, and 4) the integration of compliance, security, and liquidity. Profit forecast and rating: Huayuan Securities predicts that the company's non-IFRS revenue for 2025-2027 will be 4.67/7.64/12.20 billion Hong Kong dollars, with a compound annual growth rate of 119%/64%/60%. The company is rated as a "buy" based on its growth potential and the expectation of significant revenue elasticity from its payment business in the future. Risk factors: Risks include the selection of comparable companies across markets, volatility in the cryptocurrency market, and macroeconomic risks.