JPMorgan Raises HashKey Target Price to HKD 4.20, Maintains Overweight Rating

On September 3, JPMorgan released its latest research report, maintaining an "Overweight" rating for the licensed digital asset group HashKey, while raising its target price to HKD 4.20, implying about 60% upside potential from the current price of HKD 2.62. The report noted that HashKey's current valuation is significantly below industry levels, and the previous stock price correction was excessive. With the company's core business remaining robust and operational conditions continuously improving in the second half of the year, there is ample potential for medium- to long-term revenue growth.

The research report highlighted that HashKey's institutional infrastructure strategy has shown significant results, with trading operations demonstrating strong resilience. In the first half of 2026, the company's total trading volume increased by 32% year-on-year, reaching HKD 282.2 billion; among this, institutional trading volume was particularly impressive, surging 59% year-on-year to HKD 231.5 billion, with institutional trading volume's share of the total significantly rising to 82%, indicating a continuous enhancement in client stickiness and scale. Benefiting from the recovery in trading activities, the group's gross margin increased by 9.6 percentage points quarter-on-quarter to 60.6%, and the trading facilitation gross margin also rebounded significantly to 50.1%. The adjusted loss narrowed by 21% year-on-year to HKD 315 million, outperforming previous expectations by 10%.

In terms of expenses, although the company's reported operating expenses increased significantly year-on-year due to the impact of equity incentive accounting, excluding this non-cash item, the actual operating expenses decreased by about 4.5% year-on-year, benefiting from organizational optimization, process automation, and AI-assisted development, demonstrating significant improvements in quality and efficiency. For business segments under short-term pressure, such as on-chain services, it emphasized that the market has overreacted. Currently, HashKey's forecasted price-to-sales ratio (P/S) for 2027 is only 4.9 times, significantly lower than the average valuation of 8.1 times for major global listed peers, indicating substantial discount potential.

Looking ahead, with the continuous increase in institutional client penetration, improved monetization capabilities of diverse product lines, and the planned acquisition of Singapore's APEX to further expand the regulated derivatives and clearing services landscape, HashKey's medium- to long-term growth momentum remains strong. Additionally, the company's previously announced HKD 100 million share buyback plan also sends a positive signal to the market regarding management's confidence in the company's long-term value.