What is the expected timeline for approval of the VASP license in Hong Kong and how might delays impact the company's growth plans?

Expected approval timeline:

Hong Kong’s Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have indicated that a full VASP (Virtual Asset Service Provider) licence typically takes 3‑4 months from the date a complete, compliant application is received. FTFT’s press release notes that the Hong Kong subsidiary has already submitted all required documentation, so the most realistic market expectation is approval by the end of Q4 2025 (late‑year), assuming a smooth review. The next‑step public consultation that the SFC usually conducts lasts about 30 days, after which a formal decision is issued within a few weeks.

Impact of potential delays:

If the SFC’s review extends beyond the typical 3‑4‑month window—e.g., due to heightened regulatory scrutiny on “virtual asset” firms—approval could slip into Q1‑Q2 2026. Such a delay would push back FTFT’s planned rollout of its crypto‑trading platform, digital‑asset custodial services, and associated fee‑revenue streams. In the short term, investors may price‑in a 10‑15 % downside risk to the stock as cash‑flow projections are deferred. A delayed licence also reduces FTFT’s ability to capture the rapid inflow of institutional capital into Hong Kong’s emerging crypto‑exchange market, potentially ceding market share to rivals already licensed in Singapore, Japan or the EU. Consequently, the market is likely to reward a clear‑cut path to approval (e.g., a positive SFC update) with a short‑term upside (5‑7 % rally) as investors factor in earlier revenue ramp‑up, whereas any news of extended review periods should trigger a sell‑or‑reduce stance until the regulatory hurdle is cleared.

Trading implication:

Maintain a long‑bias on FTFT while monitoring SFC communications (e.g., weekly SFC updates, Hong‑Kong press releases). If the licence is confirmed by Sept‑Oct 2025, consider buying on pull‑backs with a 6‑month target price reflecting ~20 % upside from the anticipated new‑revenue runway. Conversely, if the SFC signals an extended review beyond Q1 2026, consider trimming exposure or hedging, as the delay would compress the company’s growth timeline and could pressure the stock in a risk‑off environment.