Written by: Yangz, Techub News
Yesterday, a report from Bloomberg brought Huaxing Capital—known as the "king of mergers and acquisitions" in China’s internet sector—back into the spotlight. According to insiders, Huaxing Capital is in deep discussions with the family office YZi Labs, founded by Binance co-founder Zhao Changpeng, to jointly raise approximately $600 million to establish a publicly listed digital asset treasury company in the U.S. focused on investing in Binance's ecosystem token BNB. If the collaboration proceeds smoothly, both parties will jointly invest $200 million, further strengthening their strategic positioning in BNB. This seemingly sudden news is, in fact, a carefully orchestrated move by Huaxing Capital. Observant analysts can easily see that this transformation is not a spur-of-the-moment decision, but rather a tightly coordinated strategic shift akin to a "D-Day" operation:
June 2025, Strategic Declaration: Huaxing Capital officially announced its entry into the Web3 and cryptocurrency asset sectors on the Hong Kong Stock Exchange, approving a budget of $100 million for the development of related businesses and investment in crypto assets over the next two years.
August 2025, Licensing and Ecosystem Layout: Huaxing Capital's self-operated investment head, Shi Ziyuan, publicly stated that the company will apply to expand its licenses under the Hong Kong Securities and Futures Commission to cover digital asset business areas, increasing investments in digital financial infrastructure, on-chain ecosystems, and real-world assets (RWA), aiming to "help Hong Kong build a global digital asset center."
Late August 2025, Core Move: Huaxing Capital signed a strategic cooperation memorandum with YZi Labs, announcing an investment of approximately $100 million specifically allocated for BNB, intending to become the first Hong Kong-listed company to include BNB in its dedicated digital asset allocation and planning to promote BNB's compliant listing and the establishment of an RWA fund.
From the decision to enter the market in June to the core move in August, and now to the brewing of a larger-scale capital layout, Huaxing Capital has rapidly and decisively intertwined itself with BNB in just four months. This series of actions not only marks a critical strategic shift in its "post-Bao Fan era" but also represents an experiment attempting to disrupt the traditional investment banking business model.
The Shadow of Path Dependence on "Key Figures"
To understand the disruptive nature of Huaxing's transformation, one must revisit the traditional model that underpinned its success.
In the story of Huaxing Capital's rise, founder Bao Fan is the absolute core. With experience at Morgan Stanley and Credit Suisse, along with his unique charm and extensive network, he founded Huaxing Capital in 2005 and precisely hit every node of China's internet golden decade. From Meituan's acquisition of Mobike, the merger of Didi and Kuaidi, to the marriage of Meituan and Dianping, Huaxing Capital, as a "super matchmaker," participated in nearly all major M&A transactions in China's internet industry, earning Bao Fan the titles of "king of mergers and acquisitions" and "capital matchmaker."
However, this successful model also buried hidden dangers for its future. Huaxing is essentially an empire highly dependent on personal networks and relationship-driven dynamics. Its moat is built on non-public information channels and Bao Fan's personal mediation abilities. This model thrived during the era of incremental expansion in the internet sector, as evidenced by its peak net profit exceeding 1.6 billion yuan in 2021. However, the shadow of path dependence began to emerge as internet dividends faded and antitrust regulations intensified, leading to a sharp decline in Huaxing's core TMT M&A business. More critically, this "key figure" model overly tied the company's fate to one individual. When Bao Fan "went missing" in February 2023 due to cooperating with an investigation, the empire instantly lost its pillar: the company was suspended for over 17 months, and its market value shrank by over 2 billion HKD.
Bao Fan's resignation from all positions in 2024 marked the end of the "Bao Fan era." This also meant that the old model on which Huaxing Capital relied for survival was no longer viable. It had to find a new path that did not depend on personal charisma and could adapt to the new era.
Breaking the Deadlock and Reconstruction: The Difficult Start of "Version 2.0"
After a 17-month suspension, Huaxing Capital resumed trading on September 9, 2024. The dramatic drop of 66% on the first day was a stark reflection of its fall to the bottom. However, it was from this moment that a self-redemption process was forced to accelerate from within.
The initial transformation focused on "stanching losses" and "optimization." On the same day it reissued its 2023 performance announcement, Huaxing Capital announced significant adjustments to its board. Bao Fan's wife, Xu Yanqing, was appointed as a non-executive director and later became the chairperson of Huaxing Capital in October, transitioning from non-executive to executive director. In November of the same year, Huaxing Capital appointed Wang Lihang as CEO. Thus, Huaxing Capital officially entered the "Xu Yanqing-Wang Lihang era."
After taking office, Xu Yanqing quickly proposed the "Huaxing 2.0" strategy, clearly shifting the focus from traditional internet business to the "technology + industry" mainline, emphasizing the need to "actively explore the Web3 and cryptocurrency asset sectors while solidifying Huaxing's existing business to lead the development of innovative technology."
The effectiveness of the strategic transformation was fully reflected in the 2024 performance report. Huaxing Capital achieved total revenue and net investment income of nearly 840 million yuan, a year-on-year increase of 5.2%; the net loss attributable to shareholders significantly narrowed by 62.1% to 180 million yuan. Notably, the fourth-quarter performance after Xu Yanqing's appointment showed accelerated improvement, with quarterly revenue accounting for 46% of the annual total.
In terms of business restructuring, the three major pillars showed synchronized progress: investment banking revenue grew by 16.8% against the trend, focusing on emerging fields such as general technology and embodied intelligence, establishing a leading position in the AGI track; investment management became a key profit contributor, accounting for 38% of total revenue, with operating profit of 126 million yuan, achieving a cash inflow of 3.2 billion yuan through precise exits, and excellent performance in core fund DPI; Huaxing Securities showed significant transformation results, with revenue accounting for 30%, and the number of users of its "Huaxing Duoduo Jin" app growing by 95%, while client asset scale increased by 146%, successfully developing a new growth pole in wealth management.
In addition to the improvement in performance data, market confidence also steadily recovered. In May of this year, Huaxing Capital served as a joint sponsor for the IPO of Sutech Ju Chuang on the Hong Kong Stock Exchange, successfully raising 2 billion HKD; in August, as the exclusive underwriter for the C1 Fund's NYSE IPO, it achieved a "breakthrough" in U.S. underwriting business. These benchmark cases marked the comprehensive recovery of its core investment banking capabilities.
At the same time, the capital market responded positively, with Huaxing Capital's stock price rising from a low of 1.9 HKD at the time of its resumption in September 2024 to a high of 10.02 HKD in August 2025. Furthermore, the mid-term results for 2025 showed that the company achieved total revenue and net investment income of approximately 460 million yuan, a year-on-year increase of 27%; operating profit was about 76 million yuan, and net profit attributable to shareholders was approximately 65 million yuan, marking a complete turnaround from losses.
However, industry insiders generally recognize that while these achievements have temporarily pulled Huaxing out of the trough, they essentially represent a repair and continuation of traditional business. To truly break the deadlock, it still needs to find a new track with immense imaginative potential that can completely sever ties with the past. Web3 and digital assets have emerged as the chosen answer for Huaxing Capital in this context.
The Hidden Foreshadowing: Early Planting and Late Harvest in Web3
Huaxing Capital's transformation towards the crypto field today may seem abrupt, but the seeds were sown seven years ago.
As early as 2018, during Circle's E round financing, Huaxing Capital's presence quietly appeared among a list of illustrious investors. This investment only became widely known this year when it actively congratulated Circle on its listing, and the small shareholding ratio indicated that it was more of a tentative "placeholder" at the time. As noted in a report by financial media "IPO Early Know," Lei Ming, who managed Huaxing's New Economy Fund, explained the logic behind investing in Circle, stating, "At that time, blockchain was still in its early development, and many laws and regulations were unclear, so we chose projects that we believed were compliant and within risk control, as we still had to consider exit strategies for future listings."
In addition to issuing congratulations, Huaxing Capital also revealed in its announcement its "active and prudent" layout in the blockchain technology field, such as leading the participation of Canaan Creative in its NASDAQ listing in 2019; in 2021, Huaxing invested in Amber Group, which has completed its merger and listing in the U.S.; in 2022, it completed an investment in Matrixport and assisted Bitdeer in its merger and subsequent U.S. stock split listing; at the same time, Huaxing Securities (Hong Kong) served as the financial advisor for HashKey Group in 2024, leading the company's financing and promoting its compliance process.
These early explorations were like seeds buried deep, confirming Huaxing's foresight but failing to gain sufficient growth space under its traditional business paradigm. It was not until its core business suffered severe setbacks that these long-ignored strategic foreshadowings were reactivated under new survival pressures, revealing their new value.
Thus, we see a clear and radical advance route for 2025: the $100 million budget in June serves as a strategic "declaration," clearly indicating the determination to transform; the license applications and ecological layout in August resemble the construction of a frontline "beachhead"; and the collaboration with YZi Labs and heavy investment in BNB undoubtedly represent the "heavy artillery" for a full-scale assault. This trajectory from tentative exploration to substantial investment outlines the transformation journey of a traditional investment bank under the digital wave.
Betting on BNB: Strategic Logic and Risk Tests Behind the Gamble
Huaxing Capital has chosen BNB as the core vehicle of its Web3 strategy, backed by a complete value reconstruction logic. First is the fundamental reshaping of the business model: shifting from a "service intermediary" to a "value container," Huaxing Capital is attempting to transcend the traditional investment bank's role of earning commissions through transaction facilitation. By establishing a publicly listed digital asset treasury focused on BNB, it aims to transform itself into a "container" that carries the value of crypto assets. Secondly, there is a leap in ecological positioning, upgrading from "peripheral participant" to "core builder." Compared to earlier financial investments in projects like Circle, the deep binding with the BNB ecosystem undoubtedly represents a strategic upgrade. As Xu Yanqing stated in a conversation with YZi Labs head Ella Zhang, "Huaxing not only wants to be a bridge connecting the Web2 and Web3 worlds but also aims to continue leading Huaxing to become the most iconic investment bank in the Web3 era through our expertise in investment banking services, asset management, and wealth management."
However, while the vision is grand, Huaxing Capital's gamble is still fraught with thorns. The volatility of the crypto market far exceeds that of traditional stock markets. Committing $100 million of company capital heavily to a single token, BNB, is akin to tying the company's fate to an extremely unstable rope. If the price of BNB significantly retraces, not only will the investment suffer, but it will also severely undermine market confidence in its management capabilities.
Moreover, the current DAT model is facing scrutiny. With the U.S. SEC and the Financial Industry Regulatory Authority (Finra) announcing investigations into over 200 publicly listed companies involved in crypto treasuries, the compliance risks of this model are becoming increasingly apparent. Arthur Hayes and others have also warned of the potential for a "FTX-like collapse" in DAT. Is joining DAT now a good choice? Can the Huaxing team navigate this ship sailing into unknown waters?
Conclusion: A Journey with No Retreat
The story of Huaxing Capital goes far beyond the rise and fall of an investment bank. It is a business case about path dependence and rebirth, a collective reflection of traditional financial elites amid dramatic changes in the era. From relying on Bao Fan's personal charm in the "1.0 era," to attempting institutional and strategic transformation in the "2.0 era," and now anchoring the company's fate to crypto assets in the "BNB gamble," every step of Huaxing Capital is deeply etched with the marks of the times and survival anxiety.
Its transformation is not merely about seeking new growth points; it is also about answering a fundamental question on the eve of digital civilization reshaping the financial landscape: what is the core value of an investment bank? Is it the ability to facilitate transactions under information asymmetry? Is it the pipeline function between capital and projects? Or is it to become the definers, builders, and co-prosperers of new asset classes in an era of value internet?
Huaxing Capital has chosen the latter. The outcome of this gamble remains to be seen, but it is certain that for Huaxing Capital today, the greatest risk may not be the potential failure of transformation, but rather remaining stagnant in the shadows of the past, ultimately being completely abandoned by the times. This is a journey with no retreat, and its success or failure will provide a highly representative observation sample for all traditional financial institutions seeking a way out under the impact of the digital wave.
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