HashKey Holdings, which operates one of Hong Kong’s largest licensed cryptocurrency exchanges, made its trading debut on the local bourse on Wednesday, opening higher but ending a choppy day 0.15 percent below its offer price of HK$6.68 (85 US cents), as global virtual asset volatility weighed on sentiment.

That put HashKey’s market capitalization at about HK$18.4 billion. The company sold 241 million shares, including 24.06 million in the Hong Kong public tranche. The initial public offering raised net proceeds of nearly HK$1.48 billion, which will be mainly used for technology and infrastructure upgrades, market expansion, brand building and partnership development, according to the IPO documents.

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Speaking at the listing ceremony, HashKey Group Chairman Xiao Feng said the company, founded in Hong Kong in 2018, has secured 13 licenses across six jurisdictions. The company’s approach to “operate on the principles of being licensed, compliant and regulated” had been crucial to help it meet the listing requirements of the Hong Kong stock exchange, he said.

Responding to concerns that HashKey has yet to turn in a profit over the past three years, Xiao said the company is prioritizing investment over short-term earnings, with the virtual-asset market still in a phase of rapid expansion. Profitability “is not the key yardstick at this stage,” he added. Instead, the company remains in a period of heavy investment to ensure that it will not miss “the industry’s critical growth window over the next two to three years”.

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Kenny Ng, a strategist at Everbright Securities International, said the listing reflected the special administrative region government’s support for the digital-asset sector. But he added that multiple factors have contributed to the company’s shares trading below the offer price.

The weak crypto price globally has dampened investors’ mood, Ng said. Bitcoin, for instance, has tumbled more than 30 percent from its record high of $126,000 in early October, and traditional financial institutions such as Standard Chartered have sharply lowered their price forecasts.

Moreover, Hong Kong equities are undergoing a consolidation, with the benchmark Hang Seng Index sliding nearly 3.5 percent over the past month. “That sentiment has naturally spilled over into the IPO market,” he added.

HashKey is among the first companies to receive a virtual-asset trading platform license from the Securities and Futures Commission of Hong Kong and is one of the 11 licensed operators in the city.

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According to its listing files, HashKey is the largest regional onshore digital-asset platform in Asia in terms of trading volume in 2024, and the largest in Hong Kong with over 75 percent market share.

Financially, heavy spending on technology and compliance continues to weigh on the company’s earnings, with net losses nearing HK$1.2 billion in 2024 and surpassing HK$500 million in the first half of this year.

HashKey’s IPO came amid a busy year-end listing calendar in Hong Kong. As of Wednesday, nine more firms are scheduled to list on the main board this month, following more than 100 companies that have gone public so far this year.

The benchmark Hang Seng Index rose 0.92 percent on Wednesday to end at 25,468.78. The Hang Seng Tech Index gained 1.03 percent, while the Hang Seng China Enterprises Index advanced 0.98 percent.

Contact the writer at irisli@chinadailyhk.com