After BC Technology plunged 90%, its stock price doubled in February, did it use crypto exchange OSL to make a comeback, or was it just speculation?

As one of the two compliant virtual asset exchanges licensed by the Hong Kong Securities Regulatory Commission, OSL is driving BC Technology’s stock price to continue to rise. Since the beginning of August, it has risen by more than 150%. In the recent JPEX case that caused a sensation in Hong Kong, BC Technology Technology stock prices haven't seen any negative impact either.

Prior to this, BC Technology had experienced two years of continuous decline. The transformation from advertising and business park management to digital assets and blockchain business had also experienced twists and turns, and the stock price had skyrocketed and plummeted many times.

Industry analysts said that OSL’s focus may not be on the business itself, but on using the virtual asset license to speculate on the stock market. Previously, media reported that BC Technology was looking for a buyer for OSL.

1. The stock price rose over 150% in February

On September 29, the last opening day before the National Day, BC Technology’s stock price hit a new high in half a year, reporting at HK$3.77.

Since the beginning of August, BC Technology’s stock price has continued to rise, with a cumulative increase of 151%. As of the close of trading on October 4, BC Technology's stock price fell slightly, reporting at HK$3.48.

BC Technology’s stock price has surged, benefiting from the recent progress of its virtual asset trading platform OSL.

According to the 2023 interim report released by BC Technology, the revenue of digital assets and blockchain platform business in the first half of the year was HK$105 million, accounting for 83% of the group's revenue, a year-on-year increase of 1766.54% from HK$5.63 million in the same period last year.

In addition, OSL has obtained an upgraded virtual asset license from the Hong Kong Securities and Futures Commission, which is also a huge positive factor.

On August 3, OSL announced that it had been approved by the Hong Kong Securities and Futures Commission to upgrade its existing license and would provide digital asset trading services for mainstream currencies such as Bitcoin and Ethereum to retail investors from today. This means that OSL has become one of the only two compliant virtual asset exchanges in Hong Kong licensed by the Hong Kong Securities Regulatory Commission, and will have a first-mover advantage over other exchanges.

The next day (August 4), BC Technology’s stock price rose 63.25%.

BC Technology CFO Hu Zhenbang told Techub News that Hong Kong retail investors can already register and open accounts on the OSL platform and buy and sell digital assets including Bitcoin and Ethereum. As the digital asset market develops and digital asset-related indices include more different types of currencies, it is expected that more and more digital assets can be traded by retail investors.

Since then, although BC Technology's stock price has fallen back, as OSL has made many progress in the Web3.0 field, its stock price has continued to rise sharply.

On August 22, BC Technology released its interim results report, with revenue of HK$126 million, a year-on-year increase of 346%. Among them, digital assets and blockchain business contributed HK$105 million, compared with HK$5.637 million in the same period last year, a year-on-year increase of 1766.54%.

On September 11, OSL announced a strategic cooperation with Harvest International Asset Management Co., Ltd. to jointly promote the innovative integration of financial technology and the securities industry and promote the transformation and upgrading of security token products.

On September 21, OSL reached a strategic partnership with the School of Business Administration of the Hong Kong Polytechnic University and established a Web3.0 research center to promote innovation in artificial intelligence and asset tokenization.

Recently, the JPEX case that caused a sensation in Hong Kong did not have a negative impact on OSL. The case had a limited impact on its stock price. The price only fell on the 19th and 20th, and continued to rise thereafter.

Since September 18, the JPEX case has caused a sensation in Hong Kong. So far, the Hong Kong police have arrested 19 people involved in the case, and received reports from more than 2,000 victims, with the amount involved exceeding 1.5 billion yuan. According to industry observers, Hong Kong investors have become more cautious about virtual asset investments due to the impact of the JPEX case.

Hu Zhenbang told Techub News that Hong Kong has shown its support for the development of Hong Kong’s compliant digital asset market. After the JPEX fraud case was exposed, the market generally called for more stringent supervision of the digital asset market, including the banning of illegal exchanges and OTC exchange shops. This is a positive factor for the development of BC Technology's business that operates compliant exchanges. The JPEX incident highlights the need for Hong Kong to plug legal gray areas and implement law enforcement to protect investors, which is crucial for Hong Kong to become an international digital asset trading center.

“We believe that the government and regulatory agencies will study how to regulate the operations of some overseas non-compliant platforms in Hong Kong, including their marketing activities in Hong Kong, attracting funds, payment agents, etc. As an international financial center and a society governed by the rule of law, Hong Kong has learned from today’s After this lesson, we will continue to attract more digital asset trading platforms and investors. At the same time, we also hope that regulatory agencies can strengthen supervision, crack down on illegal and illegal activities, and protect the rights and interests of investors." Hu Zhenbang said.

2. The dawn of victory VS the borrowed hype

Currently, BC Technology’s main business is digital assets and blockchain business in Hong Kong and Singapore, as well as commercial property management business in the Mainland. From its public information, it can be seen that the former is its main business.

However, before 2019, BC Technology’s main business was advertising and business park management services. In April 2019, BC Technology announced its transformation from the previous "Brand China Group Co., Ltd." to "BC Technology Group Co., Ltd.", seeking to expand its business into the rapidly growing digital assets and blockchain technology-related businesses.

Judging from the subsequent stock trends, BC Technology’s transformation was not smooth.

When the name was changed in 2019, BC Technology was already in trouble. Its stock price fell from the highest level of HK$25 in early 2018 to about HK$6. Afterwards, after business adjustments and the support of the bull market in the crypto industry, BC Technology's stock rose sharply again. It reached HK$22.65 in early 2021.

After the second half of 2021, BC Technology experienced a two-year downturn, and its stock price plummeted to a minimum of HK$1.5, a drop of more than 90% from its highest point.

It can be seen from the announcement issued by BC Technology that in the past two years, BC Technology has been in a state of loss, and its net losses continue to expand.

According to BC Technology's 2022 annual report, operating income in 2022 was HK$116 million, a year-on-year decrease of 64%, and net loss attributable to the parent company was HK$541 million, a year-on-year increase of 44.02%. In 2021 and 2020, BC Technology Group’s net losses were HK$369 million and HK$291 million respectively.

In order to reduce operating costs, BC Technology closed its advertising business in October last year to devote more resources to its OSL digital assets and blockchain platform business.

Earlier this year, according to media reports, OSL was laying off employees and would cut about one-third of its total costs. BC Technology CEO Hugh Madden said the decision to cut costs was in response to current market conditions and included layoffs.

However, OSL's compliant and stable virtual asset development path and recent development momentum have given investors hope for BC Technology's comeback.

On September 22, OSL announced that it successfully completed the Service Organization Control Report (SOC) 2 Type 2 audit assessment of its custody and automated trading services (ATS) products. This certification assures institutional, professional and retail investors that OSL has independently audited its core systems against one of the most stringent and globally recognized control frameworks.

Hu Zhenbang said that this certification demonstrates OSL’s new standards in digital asset security and compliance, providing confidence to institutional, professional and retail investors.

According to Hu Zhenbang, OSL has been providing professional digital asset services to institutional investors in the Asia-Pacific region, including funds, securities firms, high-net-worth investors, Web3.0 companies, etc. Currently, Interactive Brokers, one of the world's largest brokerages, and Victory Securities, a Hong Kong brokerage, have cooperated with OSL to provide virtual asset trading services directly to their customers with the support of OSL. In the future, OSL will cooperate with more financial institution partners to promote digital asset business in Hong Kong.

However, some industry analysts said that OSL's focus may not be on the business itself, but on using Hong Kong's Web3.0 new policy and virtual asset licenses to speculate on the stock market. Its core is the stock market. As the only two compliant virtual asset exchanges in Hong Kong, OSL may be sold at a high price at any time.

Previous media reports stated that OSL, a subsidiary of BC Technology Group, has decided to withdraw and will be looking for buyers in the market after the Spring Festival in 2023, but no one has taken the offer so far.

In this regard, Hu Zhenbang said that he has been looking for some business partners.

Source: Golden Finance