Core Viewpoints

Boyaa Interactive has successfully transformed from a traditional online game operator to a professional Bitcoin reserve listed company during its strategic transition over the past 18 months. Since the special shareholders' meeting in December 2023 approved the use of its own funds for Bitcoin asset allocation, the company has purchased 3,416 Bitcoins, becoming the largest Bitcoin reserve listed company in the Hong Kong market. Its stock price has increased more than 13 times, significantly outperforming Bitcoin and major market indices.

At the Q2 2025 earnings release held on August 13, the management announced a more aggressive Bitcoin reserve strategic plan, intending to initiate external financing to accelerate Bitcoin allocation and achieve a strategic reserve target of 21,000 Bitcoins by 2027. This strategy will promote Boyaa Interactive to become a leading professional Bitcoin reserve company in Hong Kong and even Asia.

In the short term, Boyaa Interactive will officially be included in the MSCI Global Small Cap Index after the market closes on August 26, 2025, with an expected passive capital inflow of $20 million to $30 million, further enhancing the liquidity of the company's stock. In the medium to long term, the company is about to launch an external financing plan to accelerate the accumulation of Bitcoin strategic reserves and attract new institutional investors, providing continuous value growth momentum for the company and achieving a second leap in company value.

Data Source: Company announcements, TradingView, Mulan Investment; Metaplanet and Boyaa Interactive data as of August 19, 2025, other company data as of August 18, 2025 *Fully diluted market value **Based on De-SPAC estimated value

Company Overview

Boyaa Interactive is a network game developer and operator that is fully transitioning to Web3. Since implementing the Bitcoin reserve strategy at the end of 2023, the company's stock price has increased more than 13 times, significantly surpassing Bitcoin, the Hang Seng Index, and the Hang Seng Tech Index.

Chart Source: Company announcements, TradingView, Mulan Investment, data as of August 19, 2025 *mNAV refers to the premium of enterprise value relative to the company's Bitcoin holdings; *Year-to-date Bitcoin return refers to the change in the number of Bitcoins per share (BTC/Share) since the beginning of the year

Chart Source: Company announcements, TradingView, Mulan Investment, data as of August 19, 2025

Development History and Strategic Transformation

Boyaa Interactive was founded by Mr. Zhang Wei in 2004, focusing on the development and operation of online card games such as Texas Hold'em. In 2013, the company was listed on the Hong Kong Stock Exchange and gradually expanded into overseas markets, becoming a global online game developer and operator.

At the end of 2023, Boyaa Interactive initiated its Web3 transformation, using its own funds to purchase Bitcoin as a strategic reserve while promoting investments and project incubation in the Web3 field. In the future, while maintaining its traditional gaming business and exploring Web3 gaming opportunities, the company will focus on accelerating Bitcoin accumulation through free cash flow and external financing, aiming to achieve a reserve target of 21,000 Bitcoins by 2027.

Main Business

1. Bitcoin Reserve

On December 22, 2023, the company approved up to $100 million for cryptocurrency purchases through a special shareholders' meeting. Since then, the company has utilized most of its idle cash and free cash flow to purchase Bitcoin. As of August 11, 2025, the company holds 3,416 Bitcoins (valued at approximately $400 million), with a total cost of about $200 million, making it the largest Bitcoin reserve listed company in Hong Kong and the second largest in Asia.

Chart Source: Company website

In addition, the company also holds 299 ETH (valued at approximately $1.3 million) and about $2.6 million in ATOM and BNB tokens, mainly for Web3 game development and transaction fee payments.

2. Traditional Online Games

The traditional gaming business remains the main source of cash for the company, with revenue primarily coming from Taiwan, Hong Kong, Southeast Asia, the Middle East, and Europe. The company expects its traditional gaming business to contribute over HKD 100 million in profit annually.

Chart Source: Company announcements

3. Web3 Games

Boyaa Interactive indirectly invests in Web3 games and infrastructure projects through venture capital funds focused on Web3 projects and incubates several projects, including the Texas Hold'em tournament platform MTT Sports, the Web3 data platform RootData, and the asset management platform Bouncebit.

Bitcoin Reserve Market Landscape

Since implementing the Bitcoin reserve strategy, Boyaa Interactive's stock price has shown a high correlation with Bitcoin prices, a trend that is expected to continue driving the company's future development and stock performance.

Chart Source: TradingView

According to incomplete statistics from Bitcointreasuries.net, there are currently over 160 listed companies globally adopting Bitcoin reserve strategies due to concerns over fiat currency depreciation, with the top 100 companies collectively holding over 970,000 Bitcoins, accounting for 4.6% of the total Bitcoin supply. Boyaa Interactive ranks 22nd globally with its holding of 3,416 Bitcoins, first among Hong Kong listed companies, and second in Asia only to Metaplanet (3350.JP).

Chart Source: bitcointreasuries.net, incomplete statistics, data as of August 19, 2025

Key indicators for Bitcoin reserve companies include mNAV (the premium of enterprise value relative to Bitcoin holdings) and Bitcoin return (the change in the implied number of Bitcoins per share). Among companies focused on Bitcoin reserves (excluding Bitcoin mining companies, cryptocurrency exchanges, and companies like Tesla with significant main businesses), 21 Capital, Metaplanet, and The Smarter Web Company all have mNAVs exceeding 2 times, reflecting their leading positions in regional markets and higher year-to-date Bitcoin returns.

• 21 Capital: Founded in April 2025, supported by Tether, SoftBank, and Cantor, integrating professional resources from the crypto industry, venture capital, and Wall Street, aiming to create a leading Bitcoin reserve company in the U.S.
• Metaplanet: Japan's first and largest Bitcoin reserve company, launched its Bitcoin reserve strategy in April 2024, initially benefiting from Japan's 20.312% capital gains tax (55% for cryptocurrency capital gains), and gained significant attention after being listed on the U.S. OTC market.
• The Smarter Web: The first and largest Bitcoin reserve company in the UK, established in April 2025 and listed on the U.S. OTC market, achieving the fastest Bitcoin accumulation speed in history due to strong demand in the UK and global markets.

Data Source: Company website, company announcements, TradingView, Mulan Investment, data as of August 19, 2025

Boyaa Interactive's mNAV is slightly above the industry average, reflecting its unique position in the Hong Kong market. However, due to currently relying solely on idle funds to increase Bitcoin holdings, the growth of its Bitcoin return is relatively slow. In the future, the company plans to accelerate the expansion of Bitcoin reserves through external financing, a strategic shift that is expected to drive Boyaa Interactive to achieve a second leap, enhancing the value of its Bitcoin holdings and mNAV more rapidly.

Stock Liquidity Analysis

As the Bitcoin holdings increase and the Bitcoin market strengthens, the liquidity of Boyaa Interactive's stock has improved, but it still lags behind Metaplanet's level when holding a similar amount of Bitcoin. This is mainly due to Metaplanet's strong Bitcoin accumulation momentum and its listing on the U.S. OTC market, successfully attracting widespread attention from retail and institutional investors in the U.S. market.

Boyaa Interactive plans to enhance liquidity by launching an external financing plan and strengthening investor relations activities, while exploring the issuance of ADR/ADS in the U.S. to attract global investors.

Chart Source: Company website, Mulan Investment, data as of August 15, 2025

Catalysts

Short term: The inclusion in the MSCI Global Small Cap Index on August 26, 2025, is expected to bring $20 million to $30 million in passive capital inflow to the company.

Medium to Long Term

The management plans to advance the Bitcoin reserve strategy through external financing, aiming to reach a reserve of 21,000 Bitcoins by 2027. Based on the current Bitcoin price, approximately $2 billion in financing will be needed. The company prefers to conduct equity financing when the mNAV exceeds 1 times. The announcement of financing plan details will signal a strong indication of the company's Bitcoin value expansion.

Chart Source: Company website, Mulan Investment, data as of August 19, 2025

Other potential catalysts: The company may be included in other major indices, cryptocurrency stock ETFs, or the Hong Kong Stock Connect, which will help attract broader investor attention.

Valuation

Boyaa Interactive is expected to raise approximately $140 million through the issuance of up to 20% new shares (based on current Hong Kong Stock Exchange rules) to increase its Bitcoin holdings this year. Assuming its mNAV increases to 2 times with accelerated Bitcoin accumulation and the Bitcoin price remains at current levels, the potential upside based on the current stock price is 28.3%, fully offsetting the impact of equity dilution.

Company Executive Background and Shareholding Structure

• Mr. Dai Zhikang has served as an executive director since the IPO and became the chairman of the board in 2018, holding 5.14% of the company's shares. Mr. Dai has founded several technology companies and invested in the leading cryptocurrency exchange Huobi Global (formerly HTX) in 2014, possessing extensive experience in the blockchain and Web3 fields.
• Mr. Zhang Wei is the founder of Boyaa Interactive, holding 35.99% of the shares, making him the largest shareholder of the company.
• Additionally, the employee stock ownership plan holds 6.3% of restricted shares through a trust.
• The remaining shares are mainly held by long-term funds and local retail investors.

The management and major shareholders have long supported the Bitcoin reserve strategy and have no intention of selling Bitcoin during market downturns.

Dividend Policy: The company announced in March 2025 that it plans to distribute no less than 20% of operating net profit as dividends annually over the next four years.

Risk Warning

Cognitive Bias in Main Business: Many investors still view Boyaa Interactive as a game operator with incidental Bitcoin exposure, overlooking its comprehensive strategic transformation into a Bitcoin reserve company. We believe that as a rare asset in the Hong Kong stock market, Boyaa Interactive's focus on Bitcoin reserves and its ability to accelerate this strategy through external financing make it highly attractive in the Hong Kong capital market and among overseas Chinese markets (as an important participant in the crypto field).

Bitcoin Price Volatility: The company's stock price is highly correlated with Bitcoin prices, and significant fluctuations in Bitcoin prices may affect stock performance and financing capabilities. However, the company's conservative debt policy (currently zero debt) and stable traditional gaming business provide a defensive advantage during bear markets.

On-chain Security Risks: Hacking attacks are a significant risk in the crypto field. Boyaa Interactive has established a dedicated team to manage Bitcoin reserves, employing multi-signature and distributed storage, and storing Bitcoin in cold wallets and with well-known custodians like Safe and Coinbase to mitigate risks.

Bitcoin Reserve Management: The company is currently mainly increasing its Bitcoin holdings at market lows and may collaborate with large crypto institutions such as Galaxy Digital, QCP, and Antalpha in the future to acquire Bitcoin at lower costs and implement robust strategies to generate additional returns.

Stock Liquidity: Current insufficient liquidity hinders the participation of institutional investors. The company plans to enhance its market value and liquidity through external financing and is considering issuing ADR/ADS in the U.S. to increase market visibility.

Disclaimer

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