Digital Money zone collectively rises——these fund managers have lying in ambush in advance.

Recently, the United States and Hong Kong have almost simultaneously advanced stablecoin legislation. Stimulated by favourable information, Bitcoin broke through $110,000 to reach a historic high.

At the same time, on May 29, Hong Kong stock Zhong An Online surged by 31.56% in a single day; in the A-share market, Langxin Group, Lakala, Xiongdi Technology, Sifang Jingchuang, and Tianyang Technology all achieved a 20% limit-up, while several other stocks such as Xinguodu, Feitian Chengxin, and Hengbao Co. also saw significant increases.

From the data at the end of the first quarter, some public funds have already “ambushed” these stocks. Taking ZhongAn Online as an example, which has rarely been heavily held by public funds (excluding passive products), Guofu New Trend has newly entered this stock as the fourth largest holding, becoming the only public fund product heavily invested in this stock at the end of the first quarter. In the previous several quarters, there were instances where some funds briefly held this stock before liquidating their positions.

In the A-share market, Langxin Group was heavily weighted by three products managed by Chen Ying, the chief investment officer of Golden Eagle Fund, at the end of the first quarter. However, the heavy position in this stock may be more based on an AI perspective. Jingbeifang was also newly held by several fund managers, such as Zhai Xiangdong, Nong Bingli, Hu Yibin, and Yang Fei. It is worth mentioning that at the end of the first quarter, although no public funds held a heavy position in one of the “Four Little Dragons of Digital Currency,” Xin Guo Du, the National Social Security Fund 604 portfolio increased its holdings in this stock to 10 million shares.

## 1 The Concept of Digital Currency Explosion

Recently, the Hong Kong Legislative Council passed the “Stablecoin Regulation Bill,” establishing a licensing system for fiat stablecoin issuers in Hong Kong. This marks the official inclusion of stablecoins as a virtual asset into the legal regulatory framework in Hong Kong. It is expected that by the end of this year, institutions can apply to the Monetary Authority to become compliant stablecoin issuers.

The U.S. government is also accelerating the push for stablecoin legislation. On May 28, the U.S. Senate passed a procedural motion for the “2025 U.S. Stablecoin Innovation and Establishment Act” (GENIUS Act) in an attempt to provide federal regulation for dollar-pegged stablecoins.

The above news officially began to ferment in the A-shares and Hong Kong stock capital markets on May 29. By the close, the Hong Kong stock ZhongAn Online soared 31.56% in a single day, with a stock price reaching 21.05 yuan. On April 9, during trading, the stock price once dipped to 9.54 yuan. More than a month later, its stock price has doubled.

In practice, ZhongAn Bank, in which ZhongAn holds a 43.43% stake, is the first digital bank in Hong Kong to provide reserve banking services for stablecoin issuers and the first bank in Asia to offer cryptocurrency trading services to retail users. The company has close ties with digital asset exchanges and stablecoin issuers, and more collaborations are expected to unfold in the future.

The digital currency concept in the A-share market also exploded on the same day. By the close, the Wind Digital Currency Concept Index surged by 7.66%, with Lakala, Xiongdi Technology, Sifang Jingchuang, and Tianyang Technology all achieving a 20% limit-up. Additionally, stocks such as New Guodu, Feitian Chengxin, Hengbao Co., Shenzhou Information, Jingbeifang, Hailian Jinhui, and Cuiwei Co. also experienced significant increases.

Among them, as an important trading scenario for stablecoins, RWA (i.e., “Real World Asset Tokenization”) has received widespread attention from the market, and both Longxin Group and Xiexin Nengke have also reached their daily price limit due to the “RWA concept”. Previously, these two companies completed RWA financing of 100 million and 200 million RMB respectively in cooperation with Ant Group.

## 2 Aiming at “Digital Coin Minting Rights”

A stablecoin is a type of digital currency that is pegged to traditional assets such as fiat currencies or commodities. It is typically seen as a bridge between traditional finance and cryptocurrencies, with the potential to facilitate faster and cheaper transactions while reducing price volatility and associated risks.

Whether it’s the United States, Hong Kong, or the European Union, major financial centers are establishing their own digital currency systems to ensure greater monetary control in the digital financial era.

“Stablecoin transactions are relatively more efficient than traditional banks in Europe and the United States, especially in cross-border payments.” According to Guohai Securities analysis, traditional bank wire transfers can take several days to complete, while stablecoin transfers often only take a few minutes. Additionally, the transfer fees for stablecoins are relatively low, depending on network conditions (taking USDT as an example, it usually only costs a few dollars), whereas some payment systems charge fees as a percentage, and the rates are higher.

Hong Kong Legislative Council member Wu Jiezhuang tweeted that the passage of the above draft in Hong Kong is an important step towards becoming an international Web3 center, and that Hong Kong’s stablecoin is backed by fiat currency as the underlying asset. This approach directly addresses the “digital currency minting authority” by issuing digital currencies pegged to fiat currencies, thus having greater monetary influence in the digital economy era.

Meanwhile, against the backdrop of rampant discussions on de-dollarization globally, stablecoins are becoming the “lifeline” of the US dollar, while also absorbing some demand for US Treasuries. Currently, the stablecoin market has a scale of over 250 billion USD, with the underlying assets mostly being short-term US Treasuries, making it an important holder of US Treasuries.

Citibank’s report indicates that stablecoins are the entry point to decentralized finance – tracking the growth of stablecoin issuance helps to determine the overall health and growth of the digital asset environment. Stablecoins can be viewed as a means of storing value without the inherent volatility of native tokens. Another potential use case is payments and cross-border transactions, acting as a medium of exchange; the use cases for stablecoin payments are growing, and regulatory clarity can pave the way for broader adoption of payments.

However, stablecoins are not without challenges - issues such as insufficient asset backing, lack of transparency, and potential systemic risks still exist.

**## 3 These funds have preemptively positioned themselves

Generally, public fund managers who are optimistic about digital currencies often implement their strategic layouts by holding or increasing their positions in publicly listed companies related to digital currencies.

Taking ZhongAn Online, which has few public funds (excluding passive products) with heavy positions, as an example, by the end of the first quarter, the Guofu New Trend managed by Shen Zhuxi and Gao Yanyun had this stock as its fourth largest holding, with a position of 9.40%. This is also the only public fund product with a heavy position in this stock by the end of the first quarter.

However, as of May 28, under the backdrop of ZhongAn Online’s stock price surge since April 8, the product’s net value has only slightly increased by 0.18%.

By the end of the second quarter of 2024, the Huatai-PB New Economy Hong Kong-Shenzhen and Huatai-PB Asian Enterprises managed by He Qi, as well as the GF Financial Real Estate Selected managed by Ran Yuhang, all heavily invested in the company, but all reduced their positions in the third quarter of last year. The CMB Anze Stable Profit 9-month holding briefly held a significant position in Zhong An Online in the third quarter of last year, but also chose to liquidate in the fourth quarter.

In the A-share market, Langxin Group also has public funds heavily invested. By the end of the first quarter, three products managed by Chen Ying, the Chief Investment Officer and General Manager of the Growth Investment Department at Jin Ying Fund, were all heavily invested in this product. Among them, Jin Ying Core Resources and Jin Ying Technology Zhi Yuan increased their holdings, with share numbers of 2.77 million and 970,000 shares respectively, while Jin Ying National Emerging was newly entered, with a share number of 1.77 million.

Chen Ying heavily invests in Langxin Group, possibly more from an AI perspective. In the quarterly report, he mentioned that AI remains a major driving force in the consumer electronics industry, especially in innovative products. The combination of AI technology with traditional industries forms a strong explosive potential and broad growth space for the vertical applications of artificial intelligence across various sectors.

Except for Chen Ying, the other public funds heavily invested in this stock are mostly index-based and quantitative products.

At the end of the first quarter, Jingbeifang was also held by several fund managers for the first time.

Companies such as the招商优势企业 led by Zhai Xiangdong, 景顺长城品质长青 led by Nong Bingli, and 华安媒体互联网 led by Hu Yibin have newly entered this stock, holding 6 million shares, 5.1666 million shares, and 1.6445 million shares respectively; the鹏华创新驱动 and 鹏华高端装备 managed by Yang Fei have also newly entered this stock as one of the top ten heavy positions, with holdings of 1.1582 million shares and 515,900 shares respectively; the 创金合信数字经济主题 and 创金合信动态平衡 managed by Wang Xin, as well as the 华安先进制造 managed by Xiong Zheying, have similarly newly entered this stock as heavy positions.

As a company dedicated to providing information technology service (ITO) and business process outsourcing (BPO) services to domestic and foreign financial institution customers, Jingbei’s revenue scale in 2024 will hit a record high. In terms of cutting-edge technology layout, the company has realized the large-scale application of artificial intelligence, big data and digital currency. In 2024, the company’s artificial intelligence and big data innovative products will achieve revenue of 79.59 million yuan, accounting for 1.72% of total revenue, a year-on-year increase of 65.29%; Smart customer service and consumer finance precision marketing achieved revenue of 820 million yuan, accounting for 17.69% of total revenue, a year-on-year increase of 37.46%.

According to the financial report, the company’s performance results in 2024 benefit from deep involvement in the construction of the financial institutions’ innovation system, while proactively laying out and implementing innovative technology products such as artificial intelligence and big data. The company provides technical support and testing services for the core system construction of banks, covering core business scenarios such as credit management, cash management, and payment settlement.

It is worth mentioning that at the end of the first quarter, although no public funds heavily invested in one of the “Four Little Dragons of Digital Currency”, New Guodu, the National Social Security Fund 604 combination increased its holdings of the stock to 10 million shares.