JP Morgan: Raises the target price of HASHKEY HLDGS (03887) to HKD 4.2, maintaining an "Overweight" rating.

JPMorgan released a research report stating that it has raised the target price for HASHKEY HLDGS (03887) to HKD 4.2, maintaining an "Overweight" rating. The bank pointed out that HashKey's current valuation is significantly lower than the industry average, and the previous stock price correction was relatively large. As the company's core business remains robust and operational conditions continue to improve in the second half of the year, there is ample potential for medium to long-term revenue growth. The report noted that HashKey's institutional infrastructure strategy has shown significant results, with trading business exhibiting strong resilience. In the first half of 2026, the company's total trading volume increased by 32% year-on-year to HKD 282.2 billion, of which institutional trading volume surged by 59% year-on-year to HKD 231.5 billion, with the proportion of institutional trading volume rising to 82%. This indicates that the stickiness and scale of institutional clients are continuously strengthening. Thanks to the recovery in trading activities, the group's gross profit margin increased by 9.6 percentage points quarter-on-quarter to 60.6%, while the gross profit margin for trading matching also significantly rebounded to 50.1%. Adjusted losses narrowed by 21% year-on-year to HKD 315 million, outperforming the bank's previous expectations by 10%. Regarding expenses, although the company's reported operating expenses increased significantly year-on-year due to the impact of equity incentive accounting, after excluding this non-cash item, actual operating expenses decreased by approximately 4.5% year-on-year, benefiting from organizational optimization, process automation, and AI-assisted development initiatives. Looking ahead, as the penetration rate of institutional clients continues to rise, the monetization capabilities of a diversified product line improve, and the proposed acquisition of Singapore's APEX aims to further expand its regulated derivatives and clearing services, the bank believes that HashKey's medium to long-term growth momentum remains strong. Additionally, the company's earlier announced HKD 100 million share repurchase plan also signals management's positive outlook on the company's long-term value.