Core Viewpoint - CICC maintains a target price of HKD 435 for Hong Kong Exchanges and Clearing (00388) and an outperform rating, with earnings forecasts largely unchanged [1] Group 1: Revenue and Earnings Forecast - For Q1 2025, revenue is expected to increase by 31% year-on-year and 7% quarter-on-quarter to HKD 6.83 billion, with fee income (excluding investment income) projected to rise by 47% year-on-year and 10% quarter-on-quarter to HKD 5.65 billion [1] - Profit is anticipated to grow by 36% year-on-year and 7% quarter-on-quarter to HKD 4.05 billion [1] Group 2: Market Activity and Trading Performance - The average daily trading (ADT) for Hong Kong stocks in Q1 2025 is expected to rise by 144% year-on-year and 30% quarter-on-quarter to HKD 242.7 billion, with southbound ADT increasing by 255% year-on-year and 41% quarter-on-quarter to HKD 109.9 billion [2] - The number of IPOs completed in Q1 2025 is 15, raising HKD 18.2 billion, which represents a 279% year-on-year increase but a 43% quarter-on-quarter decline [2] Group 3: Investment Income and Margin Trends - Investment income is projected to decline by 15% year-on-year and 5% quarter-on-quarter to HKD 1.14 billion, primarily due to high base effects from external equity investment returns [3] - The margin size may decrease quarter-on-quarter due to a decline in derivative trading margin ratios influenced by lower volatility [3] Group 4: Market Outlook and Valuation - The current forward P/E ratio for Hong Kong Exchanges is at historical relative lows, trading at the 36% and 24% percentiles of the last three and five years, respectively [4] - Anticipated policy developments and market reforms are expected to support trading activity and provide a catalyst for valuation recovery [4]

Core Insights - The article highlights the top short-selling stocks in the Hong Kong market, indicating significant investor sentiment against these companies [1][2]. Short Selling Ratios - The top three stocks with the highest short-selling ratios are Great Wall Motors-R (89.22%), Li Ning-R (82.43%), and BYD Company-R (79.48%) [1][2]. - Other notable companies with high short-selling ratios include Baidu Group-SWR (77.03%) and Lenovo Group-R (73.78%) [2]. Short Selling Amounts - The highest short-selling amounts are recorded for Tencent Holdings (67.43 billion), Xiaomi Group-W (56.17 billion), and Alibaba-SW (52.37 billion) [1][2]. - BYD Company also appears in the top short-selling amounts with 38.64 billion [2]. Deviation Values - The stocks with the highest deviation values, indicating a significant difference from their average short-selling ratios over the past 30 days, are Hong Kong Exchanges-R (60.43%), Baidu Group-SWR (52.06%), and BYD Company-R (37.56%) [1][2]. - Great Wall Motors-R and China Bank Hong Kong-R also show notable deviation values of 35.61% and 35.39%, respectively [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The valuation of Hong Kong Exchanges and Clearing Limited (HKEX) has lagged behind trading volume, with a recovery in IPOs positively impacting the long-term Average Daily Turnover (ADT) [4][6] - In 2025, the ADT is projected to reach 2200 billion HKD, with a year-on-year increase of 66.9% [4] - The company's net profit forecast for 2025-2027 has been raised to 168, 169, and 172 billion HKD, respectively, reflecting a year-on-year growth of 29.0%, 0.2%, and 2.2% [4] Summary by Sections Market Activity and Performance - The Hong Kong stock market has seen a continuous improvement in activity, with the ADT reaching a historical peak of 2973 billion HKD in February 2025, representing a year-on-year increase of 230% [13][14] - The trading volume remained active in March, with figures of 3181 and 2863 billion HKD, showing year-on-year increases of 203% and 152% respectively [13] Regulatory Support for IPOs - Regulatory measures have encouraged A-share companies to list in Hong Kong, enhancing market capitalization and activity [6] - As of February 2025, 10 IPOs have occurred, doubling year-on-year, with a financing scale of 7.8 billion HKD, up 258% [32][34] - The approval process for IPOs has been optimized, facilitating the listing of mainland companies in Hong Kong [36] Financial Projections - The company's revenue for 2025 is projected to be 27,785 million HKD, with a year-on-year growth of 24.18% [7] - The net profit for 2025 is estimated at 16,828 million HKD, reflecting a year-on-year increase of 28.95% [7] - The sensitivity analysis indicates that an ADT of 1700, 2200, and 3000 billion HKD corresponds to net profit changes of +8%, +29%, and +62% respectively [27]

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (00388.HK) is "Buy" (maintained) [1] Core Views - The valuation of Hong Kong Exchanges is lagging behind trading volume, with a recovery in IPOs benefiting the long-term Average Daily Turnover (ADT) [4] - The trading volume in the Hong Kong stock market has been active, with February's ADT reaching a historical peak of HKD 297.3 billion, a year-on-year increase of 230% [13] - The company has adjusted its ADT forecasts for 2025-2027 to HKD 2200 billion, HKD 2000 billion, and HKD 2000 billion respectively, reflecting a year-on-year growth of 66.9%, a decline of 9.1%, and flat growth [4] - The net profit forecasts for 2025-2027 have been raised to HKD 16.8 billion, HKD 16.9 billion, and HKD 17.2 billion respectively, indicating year-on-year growth of 29.0%, 0.2%, and 2.2% [4] Summary by Sections Market Activity and Trading Settlement Business - The Hong Kong stock market's activity has been improving, with February's ADT reaching a historical peak of HKD 297.3 billion, a year-on-year increase of 230% [13] - The trading settlement business, which is highly correlated with ADT, contributed over 53% of the company's revenue in 2024 [5] IPO Recovery and Market Structure - Regulatory support for A-share companies to list in Hong Kong is expected to enhance market capitalization and activity [6] - In the first two months of 2025, there were 10 IPOs in Hong Kong, doubling year-on-year, with a financing scale of HKD 7.8 billion, an increase of 258% [6][32] Financial Performance and Valuation - The company's revenue for 2025 is projected to be HKD 27.785 billion, reflecting a year-on-year growth of 24.18% [7] - The net profit for 2025 is estimated at HKD 16.828 billion, indicating a year-on-year increase of 28.95% [7] - The current price-to-earnings (P/E) ratio is projected to be 27.8 times for 2025, compared to a historical average of approximately 37 times over the past decade [4][7]

Financial Data and Key Metrics Changes - HKEX reported record financial results for 2024, with revenue and other income increasing by 9% year-on-year, and a remarkable 31% increase in Q4 compared to the previous year [4][7] - Profit attributable to shareholders rose by 10% year-on-year, with Q4 profit showing a significant 46% increase [4][8] - Headline average daily turnover (ADT) reached $186.9 billion in Q4 2024, more than doubling from Q4 2023 [7][9] - Full-year profit after tax was $13.1 billion, with earnings per share at $10.32, both up 10% from 2023 [8][10] Business Line Data and Key Metrics Changes - The cash, commodities, and ETP markets all recorded double-digit growth in average daily turnover and volume, while the derivatives market achieved record average daily volumes [5][10] - Derivatives trading volumes reached new highs, contributing significantly to revenue, with average daily volumes up 15% from 2023 [19][10] - The LME's chargeable average daily volume increased by 18% from 2023, reflecting strong performance in the commodities market [10][12] Market Data and Key Metrics Changes - Northbound and southbound Stock Connect volumes reached record quarterly highs, with northbound ADT up 39% year-on-year and southbound up 55% [17][10] - IPOs in 2024 raised a total of $88 billion from 71 new listings, with new economy companies accounting for over 80% of the capital raised [18][10] Company Strategy and Development Direction - HKEX is focused on enhancing market resilience and competitiveness through strategic reforms, new products, and microstructure enhancements [5][14] - The company aims to modernize its infrastructure and enhance product offerings to ensure long-term market vibrancy and sustainability [14][30] - HKEX is exploring adjacent business opportunities, including the introduction of a virtual asset index series and a data marketplace [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, anticipating continued macro uncertainties but renewed interest in trading and IPOs [29][30] - The company plans to implement a minimum spread reduction and explore a shorter settlement cycle (T+1) to enhance market competitiveness [66][70] - Management emphasized the importance of maintaining cost discipline while investing in talent and technology to support sustainable growth [72][75] Other Important Information - The Board declared a second interim dividend of $4.9 per share, bringing the total full-year dividend to $9.26 per share, up 10% from 2023 [8][10] - Operating expenses increased by 6% year-on-year, primarily due to higher staff and IT costs, but the company maintained a strong EBITDA margin [11][12] Q&A Session Summary Question: Update on IPO pipeline and secondary listings - Management noted a strong trend in A-share companies pursuing dual listings in Hong Kong, with around 30 companies already in the pipeline [39][40] - Concerns about SAFE's scrutiny on IPO proceeds were addressed, with management confident in the ongoing encouragement for offshore investments [40][41] Question: Listing requirements and post-listing obligations - Management confirmed ongoing reviews of listing eligibility and compliance requirements to attract more companies [49][50] - Continuous improvements to the listing regime are aimed at maintaining competitiveness [50][52] Question: Effective tax rate and depreciation - Management indicated that the effective tax rate may rise to a minimum of 15% due to BEPS regulations, impacting financials [55][56] - Depreciation and amortization are expected to increase with the launch of new systems in 2025 [58][59] Question: 2025 strategy and operational expenses - Plans for 2025 include enhancing market vibrancy, future-proofing technology, and exploring adjacent business opportunities [64][70] - Management emphasized maintaining cost discipline while investing in talent and IT systems [72][75] Question: Data-related business growth - Management acknowledged the potential for growth in data-related business and the importance of developing a data marketplace [81][84] - The focus remains on diversifying revenue streams while maintaining a strong core business [81][84]

Financial Performance - The group achieved a record revenue and other income of HKD 22.374 billion in 2024, representing a 9% increase compared to 2023[22]. - Operating expenses rose by 6% in 2024, driven by increased employee and IT costs, although some expenses related to the 2022 nickel market incident were offset[22]. - EBITDA for 2024 was HKD 16.281 billion, up 10% from 2023, with an EBITDA margin of 74%, an increase of 1 percentage point[23]. - Profit attributable to shareholders reached HKD 13.050 billion, reflecting a 10% increase from the previous year[24]. - Major business revenue increased by 9% in 2024, reaching HKD 20,559 million, driven by higher trading volumes in cash, derivatives, and commodities markets[26]. - Net investment income from company funds rose by 18% to HKD 1,748 million, primarily due to a decrease in valuation losses from unlisted equity investments[26]. - In Q4 2024, total revenue reached a record high of HKD 6,381 million, up 31% year-over-year[39]. - Q4 2024 shareholders' profit reached HKD 3,780 million, a 46% increase compared to Q4 2023[41]. - The total revenue and other income for the year reached a record high of 22.4 billion, up 9% from 2023[57]. - The board declared a total annual dividend of 9.26 per share, including a second interim dividend of 4.90 per share[58]. Market Developments - New product launches included the first batch of ETF options and the first virtual asset spot ETF in Asia[17]. - The company plans to open an office in Riyadh in 2025, expanding its market presence[17]. - The company continues to strengthen its interaction with international investors and issuers, enhancing its global market position[13]. - The company anticipates that geopolitical and macroeconomic trends will continue to impact global markets, but positive signs of economic recovery are emerging[13]. - The number of new IPOs in 2024 reached 71, raising a total of 88 billion, ranking fourth globally[56]. - The company announced a multi-year infrastructure optimization plan to enhance market capabilities[59]. - The company is actively working on optimizing its listing mechanisms and enhancing corporate governance standards[62]. - The company is focused on maintaining high standards of corporate governance and compliance with regulatory requirements[135]. Trading Activity - Average daily trading value of equity securities on the exchange surged by 29% to HKD 120 billion[27]. - Average daily trading value for Stock Connect (Shanghai and Shenzhen) increased by 39% to RMB 150.14 billion[27]. - Average daily trading value of equity securities in Q4 2024 soared by 113% to HKD 171.5 billion[44]. - Major business revenue rose 24% to 6.017 billion, driven by increased trading volumes in spot and derivative markets[49]. - The average daily turnover in the cash market reached HKD 131.8 billion, a 26% increase year-on-year, with a record high of HKD 620.7 billion on October 8, 2024[77][78]. - The derivatives market saw an average daily contract volume of 1.6 million, up 15% from the previous year[78]. - The average daily trading volume for ETPs (including ETFs and leveraged and inverse products) reached a record high of RMB 189 billion in 2024, up 35% from RMB 140 billion in 2023[185]. Sustainability and Corporate Responsibility - The company is committed to sustainable development, achieving carbon neutrality in its operations by the end of 2024[20]. - HKEX is set to implement mandatory emissions reporting for all LME registered aluminum brands by June 15, 2025, in accordance with the EU Carbon Border Adjustment Mechanism (CBAM)[63]. - The company committed to donating HKD 86 million in 2024 to support various projects focused on financial education, inclusivity, poverty alleviation, and environmental sustainability[66]. - HKEX is expanding its initiatives to promote responsible supply chains in the metals industry, including ongoing support for projects addressing child labor in African mining[66]. - The introduction of climate-related disclosure regulations aligned with IFRS S2 positions Hong Kong as a leader in sustainability reporting[87]. - The total amount raised from new ESG-related bonds in 2024 was HKD 291 billion, indicating a strong market interest in sustainable finance[189]. Strategic Initiatives - The company announced a multi-year platform development plan to enhance market attractiveness and competitiveness[13]. - The company plans to achieve carbon neutrality by the end of 2024 and has submitted science-based greenhouse gas reduction targets for verification[64]. - The company is focused on optimizing infrastructure and product ecosystems to enhance market liquidity and resilience against macroeconomic fluctuations[98]. - The company plans to invest $200 million in digital transformation initiatives over the next two years[119]. - A strategic acquisition of a fintech startup was announced, aimed at integrating advanced analytics capabilities into existing services[115]. Governance and Management - Independent non-executive director Liang Baihan has served on the board since April 26, 2017, with a term extended until April 26, 2026[126]. - The company has a strong governance structure with members serving on various committees including audit, risk, and investment committees[126][128][130]. - The board includes members with extensive experience in finance and risk management, enhancing the company's strategic decision-making capabilities[128][130]. - The board's diverse expertise supports the company's market expansion and product development strategies[130][135]. - The company is committed to continuous improvement in its operational efficiency and risk management practices[135].

Core Viewpoint - The Hong Kong Stock Exchange is exploring a plan to lower the investment threshold for purchasing high-priced stocks to stimulate trading activity, which could positively impact the short-term performance of the exchange's stock [1][2]. Group 1: Market Activity and Trends - As of March 9, the average daily trading volume of Hong Kong stocks has exceeded 200 billion HKD this year, with February seeing three instances of daily trading surpassing 400 billion HKD, equating to four times the average daily trading volume for 2023 [2]. - The net inflow of mainland funds into Hong Kong stocks has surged, with cumulative net inflows reaching 339.5 billion HKD since the beginning of 2025, nearly quadrupling compared to the same period last year [2]. - On March 10, net purchases by mainland funds reached a record high of 296.26 million HKD, marking the highest daily net inflow since the launch of the Stock Connect mechanism [3]. Group 2: Sector Performance - The Hang Seng Index has shown significant growth, reaching a high of 24,669.6 points, while the Hang Seng Technology Index has outperformed globally with a maximum increase of over 40% [3]. - The market breadth of the Hang Seng Index has improved, with the proportion of stocks above the 20-day moving average rising from 22.9% to 90.4% as of March 7, indicating a strong upward trend, although it has not reached the levels seen in previous market rallies [4]. Group 3: Investment Strategies and Recommendations - The Southbound capital flow has demonstrated a "dumbbell" configuration, with investments concentrated in high-growth sectors such as consumer internet and technology, while also increasing holdings in high-dividend sectors like finance and energy for risk hedging [5]. - The proportion of active equity funds holding Hong Kong stocks has increased to 6.6% as of the end of February 2025, reflecting a growing interest from domestic public funds in the Hong Kong market [6].

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (388) and raises the target price to HKD 400.0, reflecting an 18.6% upside from the previous closing price [5][6]. Core Insights - The core drivers of the company's performance are the increased activity in the cash market and growth in commodity business, supported by policy benefits and a diversified product portfolio [5]. - The company achieved record high revenues and net profits in 2024, with total revenue of HKD 223.7 billion (up 9.1% year-on-year) and net profit of HKD 130.5 billion (up 10.0% year-on-year) [2][3]. Revenue and Profitability - The company reported a quarterly revenue of HKD 63.8 billion in Q4 2024, representing a significant year-on-year increase of 31.4%, with net profit for the quarter reaching HKD 37.8 billion, up 45.6% year-on-year [2]. - The annual dividend per share is set at HKD 9.3, maintaining a payout ratio of 90.0%, ensuring stable shareholder returns [2]. Market Performance - The cash market revenue for the year was HKD 86.2 billion, a year-on-year increase of 18.5%, driven by a substantial rise in average daily trading volume [3]. - The average daily trading volume in the cash market reached HKD 1,318 billion, up 26.0% year-on-year, with Q4 2024 achieving a record high of HKD 1,869 billion, a 105.0% increase year-on-year [3]. Derivatives and Investment Income - The derivatives segment saw a decline in revenue to HKD 50.1 billion (down 12.0% year-on-year), primarily due to reduced margin investment income [4]. - The investment income for the year was HKD 49.3 billion, a slight decrease of 0.6% year-on-year, with net investment income from proprietary funds increasing by 17.6% to HKD 17.5 billion [4]. Future Outlook - The report highlights the potential for future growth driven by policy support for IPO facilitation and the expansion of cross-border trading channels, alongside a diversified product offering including tech stock ETFs and Southeast Asian markets [5].

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) and the fully-owned subsidiary of the Exchange Fund, Clearstream, signed a memorandum of understanding to optimize post-trade securities infrastructure in Hong Kong's capital market, supporting the long-term development of fixed income and currency products [1] Group 1 - The collaboration aims to enhance efficiency across asset classes, including equities and fixed income, expand the use of mainland bonds as collateral, and strengthen Hong Kong's position as a bond issuance center [1] - The agreement is seen as a significant milestone, with both parties committed to supporting the development of Hong Kong's capital market by providing a richer array of products covering more asset classes [1] - The CEO of HKEX emphasized the strategic commitment to building a vibrant, world-leading ecosystem for fixed income and currency products in Hong Kong, hoping to advance the development of the fixed income market and the internationalization of the Renminbi [1]

香港交易所集团行政总裁陈翊庭最新发声。 3月4日，陈翊庭发表最新网志，阐述香港在发展固定收益和货币市场的新里程和新机遇。陈翊庭表示，不久前，她和香港交易所的同事们赴瑞士达沃斯参加 了世界经济论坛，在那里不仅聆听全球智慧，也向世界讲述香港故事。 对此，陈翊庭表示，固定收益和货币（FIC）市场将是重点拓展的领域之一。"经过多年的发展，我们已经通过现货证券市场和股票衍生产品，为投资者提供 了一站式交易和风险管理服务。这些产品是我们根据全球投资者不断变化的需求陆续开发出来的，已经构成了一个丰富的证券产品生态圈。为了进一步连接 资本与机遇，未来我们将大力发展固定收益和货币市场，在这一资产类别上培育出一个同样丰富的产品生态圈。" 据介绍，过去十年，中国内地的固定收益市场迅速发展，规模激增了五倍，目前已经高达24.6万亿美元，位居全球第二。中国内地一直在推动市场改革，包 括加强与全球市场的互联互通。在政策的大力支持下，香港交易所预期内地固定收益市场将持续高速增长，而且，内地固定收益市场与离岸固定收益市场的 互联互通也将增强。这将为全球投资者分享中国成长红利带来巨大的全新机遇。 而为了方便全球投资者分享这一机遇，香港交易所一 ...