Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The trading activity has improved further, with the average daily turnover (ADT) for May reaching HKD 139.8 billion, representing a month-on-month increase of 24.5% and a year-on-year increase of 38.4% [2][8] - The company is expected to benefit from the optimization of interconnectivity mechanisms with mainland and emerging capital markets, maintaining its alpha advantage and offering high cost-effectiveness for medium to long-term investments [3][31] Market Environment - The Hong Kong stock market experienced a rise followed by a decline in May, with active trading [8] - The ADT for May was HKD 139.8 billion, with a daily turnover rate of 0.43%, reflecting a month-on-month increase of 0.07 percentage points [8][10] - Southbound trading saw a significant inflow, with a double-sided ADT of HKD 55.7 billion, up 46.1% month-on-month and 98.9% year-on-year [10][15] - The derivatives market also saw increased activity, with stock options ADV rising by 18.0% month-on-month [16] Macro Environment - The domestic economic fundamentals remain stable, with the manufacturing PMI for May at 49.5%, indicating a slight decline but still within the expansion range [22][24] - The U.S. Federal Reserve has shown caution regarding interest rate cuts, with predictions adjusted to one cut for the year [24][31] Investment Recommendations - The company is projected to achieve net profits of HKD 124.4 billion, HKD 129.3 billion, and HKD 139.8 billion for the years 2024, 2025, and 2026, respectively, with year-on-year growth rates of 4.9%, 3.9%, and 8.2% [3][31] - The current stock price corresponds to a PE ratio of 26.9x for 2024, which is below the historical average PE of 38.9x since 2018 [3][31]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (HKEX) [48] Core Views - HKEX's revenue is primarily driven by stock trading volume, with investment income smoothing cyclical fluctuations [2] - The improvement in capital flows and trading sentiment in the Hong Kong market is expected to continue [23] - The expansion of high-quality listed companies is a key factor in elevating the trading volume and profitability of HKEX [34] Revenue Breakdown - Trading and settlement income account for 49% of HKEX's revenue, with stock trading being the decisive factor [6][8] - Investment income, which is highly correlated with interest rates, contributed 24% to revenue in 2023, growing by 266% YoY to HKD 4.959 billion [14] - Market data fees, which accounted for 5% of revenue in 2023, have significant growth potential compared to global peers [17] Understanding Beta (β) - The Hong Kong stock market has seen significant gains since February 2024, with the Hang Seng Index and Hang Seng Tech Index rising by 18.49% and 23.82% respectively [24] - Southbound capital inflows have surged, with net purchases of HKD 245 billion, HKD 859 billion, and HKD 804 billion in February, March, and April 2024 respectively [26] - Foreign capital inflows are expected to recover gradually, with international intermediaries' holdings increasing by 22% from January to May 2024 [28] Understanding Alpha (α) - The expansion of high-quality listed companies is essential for increasing trading volume and profitability [35] - Historical data shows that HKEX's profitability has been driven by waves of high-quality IPOs, such as the 2006 wave of mainland companies and the 2019 wave of US-listed Chinese companies returning to Hong Kong [37] - The Hong Kong market's low turnover rate, driven by institutional investors, leaves room for liquidity improvement through measures like reducing trading costs and introducing market makers [43] Investment Recommendation - HKEX is expected to achieve net profits of HKD 12.383 billion, HKD 13.558 billion, and HKD 14.486 billion in 2024, 2025, and 2026 respectively, with corresponding PE ratios of 27.75x, 25.34x, and 23.72x [48] - The current valuation of HKEX is below its historical average, with potential for further upside as trading volume and profitability improve [46]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights an improvement in overseas liquidity expectations and favorable policies for the Hong Kong stock market, which are expected to enhance trading activity and profitability for the Hong Kong Stock Exchange (HKEX) [3][27] - The report anticipates a recovery in average daily turnover (ADT) for HKEX, driven by supportive domestic policies and improved overseas liquidity [27] Summary by Sections Market Environment - The Hong Kong stock market experienced a strong rebound in April, with the Hang Seng Index increasing by 7.4%, the Hang Seng Tech Index by 6.4%, and the Hang Seng Financial Index by 9.6% [7] - The average daily turnover (ADT) for HKEX in April was HKD 112.3 billion, reflecting a month-on-month increase of 1.0% and a year-on-year increase of 3.1% [3][7] - Southbound trading showed significant growth, with a 3.8% month-on-month increase in ADT to HKD 38.1 billion [11][7] Macro Environment - The domestic economic fundamentals remain stable, with the manufacturing PMI at 50.4 in April, indicating continued expansion [20] - In the U.S., non-farm payrolls increased by 175,000 in April, which was below expectations, leading to a rise in market expectations for a potential interest rate cut by the Federal Reserve in September [20][24] Investment Recommendations - The report suggests that the combination of improved overseas liquidity and favorable policies for the Hong Kong stock market will lead to a recovery in trading activity, positively impacting HKEX's profitability and valuation [27] - The projected net profits for HKEX for 2024, 2025, and 2026 are HKD 12.44 billion, HKD 12.93 billion, and HKD 13.98 billion, respectively, with year-on-year growth rates of 4.9%, 3.9%, and 8.2% [27][30]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 430 HKD, corresponding to a PE of 41.6x for 2024 [3][4]. Core Insights - The company's performance is under pressure due to a decline in investment income, primarily caused by falling contract prices leading to a reduction in margin requirements. In Q1 2024, the company's revenue and net profit were 3.847 billion and 2.970 billion HKD, respectively, reflecting year-on-year declines of 6.42% and 12.85% [3]. - The China Securities Regulatory Commission has announced measures to enhance cooperation with Hong Kong, which, along with expectations of a continued trend of US dollar interest rate cuts, is likely to boost the activity level in the Hong Kong stock market, driving the company's revenue growth beyond expectations [3][4]. Financial Summary - For the fiscal years 2024 to 2026, the company is projected to achieve revenues of 22.2 billion, 24.3 billion, and 26.9 billion HKD, with net profits of 13.1 billion, 14.7 billion, and 16.6 billion HKD, respectively [3][5]. - In Q1 2024, the company's investment income decreased by 12.57% to 1.342 billion HKD, accounting for a negative contribution of 54.06% to total revenue growth. The average margin size decreased by 25.47% to 18.46 billion HKD [3][5].

Investment Rating - The investment rating for Hong Kong Stock Exchange (00388.HK) is "Buy" (maintained) [1] Core Views - The report emphasizes that the Hong Kong capital market is entering a significant policy dividend period, with the Hong Kong Stock Exchange positioned to embark on a new journey due to favorable external conditions [3][10]. Summary by Sections 1. Capital Market Cooperation Measures - The China Securities Regulatory Commission (CSRC) announced five measures to enhance cooperation with Hong Kong, including expanding the eligible products for Stock Connect, incorporating REITs into Stock Connect, and supporting the inclusion of RMB trading counters in the Hong Kong Stock Connect [3][11][12]. - The ETF market in Hong Kong has seen substantial growth, with annual trading volume increasing from USD 1.7 billion in 2003 to USD 435.1 billion in 2023, reflecting a compound annual growth rate of 32% [15][16]. 2. Expectations from Two Sessions Proposals - Proposals from the Two Sessions are expected to gradually materialize, including potential reductions in dividend tax for Hong Kong Stock Connect investors, which could enhance investment interest in high-dividend assets [25][28]. - The report anticipates that the expansion of financial derivatives related to mainland assets will further attract overseas investors to the Hong Kong market [10][25]. 3. Earnings Forecast and Valuation - The forecast for the Hong Kong Stock Exchange's net profit for 2024-2026 is projected at HKD 121.24 billion, HKD 131.63 billion, and HKD 141.33 billion, with corresponding growth rates of 2.21%, 8.57%, and 7.37% respectively [3][10]. - The current market valuation corresponds to a P/E ratio of 28.17x for 2024, 25.95x for 2025, and 24.17x for 2026 [2][3].

Investment Rating - The report maintains an "Outperform" rating for the company [5][6][16] Core Views - The company reported a net profit of 2.97 billion HKD for Q1 2024, a year-on-year decrease of 13%, primarily due to market weakness [5][6] - Total revenue and other income for Q1 2024 were 5.201 billion HKD, down 6% year-on-year [5][6] - The report estimates total revenue for the company to be 22.874 billion HKD in 2024, with a year-on-year growth of 11% [12][16] Financial Performance Summary - The company's Q1 2024 revenue from the cash market segment was 1.881 billion HKD, a decrease of 11.6% year-on-year, accounting for 36% of total revenue [2] - The average daily trading volume in the cash market decreased by 22% to 99.4 billion HKD [2] - The average daily trading volume for the Northbound and Southbound of the Stock Connect was 133 billion HKD and 31 billion HKD, representing increases of 37.1% and decreases of 17.3% respectively [2] - The bond market's Northbound daily trading volume increased by 22%, reaching a record high for the quarter [2] Revenue and Profit Forecast - The estimated revenues for the company for the years 2024, 2025, and 2026 are projected to be 22.874 billion HKD, 24.639 billion HKD, and 26.160 billion HKD respectively, with year-on-year growth rates of 11%, 8%, and 6% [12][16] - The net profit attributable to shareholders is expected to be 13.231 billion HKD, 14.190 billion HKD, and 14.894 billion HKD for the years 2024, 2025, and 2026, reflecting year-on-year growth of 12%, 7%, and 5% [12][16] Valuation - The reasonable value range for the company's stock is estimated to be between 320.00 and 333.40 HKD, corresponding to a 2024E PE ratio of 30.7 to 31.9 times [6][16] - The report uses a two-stage Dividend Discount Model (DDM) for valuation, assuming a dividend payout ratio of 90% and a long-term growth rate of 4% [16]

Investment Rating - The report maintains a "Buy" rating for the company [2][7]. Core Views - The report indicates that while the company's revenue and other income decreased year-on-year in Q1 2024, there was a quarter-on-quarter improvement. The performance in the derivatives and commodities markets, as well as the Shanghai-Hong Kong Stock Connect, remains resilient [7]. - The average daily trading volume in the cash market decreased year-on-year, but there was a significant increase in the derivatives and commodities markets, indicating strong growth potential [7]. Financial Highlights - For the fiscal year 2023, the company's revenue and other income were HKD 202.7 billion, with a year-on-year growth of 10.9%. The projected revenue for 2024 is HKD 211.0 billion, reflecting a growth of 4.1% [6][11]. - The net profit attributable to shareholders for 2023 was HKD 118.6 billion, with a year-on-year increase of 17.7%. The expected net profit for 2024 is HKD 120.4 billion, showing a modest growth of 1.5% [6][11]. - The return on equity (ROE) for 2023 was 23.5%, with projections of 23.2% for 2024 and 24.4% for 2026 [6][11]. - The company's earnings per share (EPS) for 2023 was HKD 9.37, with an expected increase to HKD 9.69 in 2024 [6][11]. Market Data - As of April 25, 2024, the closing price of the company's stock was HKD 246.8, with a total market capitalization of HKD 3,129 billion and total assets amounting to HKD 494.8 billion [3][6].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 312 HKD per share, indicating an expected performance that exceeds the market by 5%-15% over the next 12 months [3][10]. Core Insights - The company reported a total revenue of 5.2 billion HKD for Q1 2024, reflecting a year-on-year decline of 6%. The decrease is primarily attributed to a drop in trading volume in the Hong Kong stock market, with the average daily turnover (ADT) falling by 22% to 99.36 billion HKD compared to Q1 2023 [1][2]. - The decline in revenue was somewhat mitigated by growth in derivatives and commodity trading, with net profit attributable to shareholders for Q1 2024 at 2.97 billion HKD, down 13% year-on-year. The EBITDA margin decreased to 72%, a decline of 4 percentage points [1][2]. - The report highlights that the stock trading revenue was impacted by the macroeconomic environment, with a 12% year-on-year decrease in the cash segment revenue, while settlement fees benefited from a 37% increase in northbound trading [1][2]. - The derivatives and commodities market showed resilience, with trading volumes for derivatives and LME metal contracts increasing by 14% and 31% year-on-year, respectively [1][2]. - Investment income contributed significantly to the company's performance, with a net return rate on margin and settlement funds rising to 1.8% from 1.6% in the previous year, although total investment income decreased by 13% to 1.34 billion HKD [1][2]. Financial Summary - For the fiscal year 2024, the company is projected to achieve a net profit of 13.2 billion HKD, with an earnings per share (EPS) of 10.41 HKD. The price-to-earnings (PE) ratio is expected to be 30 times [2][3]. - The revenue forecast for the upcoming years shows a steady growth trajectory, with expected revenues of 22.77 billion HKD in 2024, 25.91 billion HKD in 2025, and 29.66 billion HKD in 2026, reflecting growth rates of 11% and above [2][3].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 342 HKD, based on a 35X PE for 2024 [8][9]. Core Views - The company has demonstrated resilience in its performance, with expectations for gradual recovery in the market [4][5]. - The first quarter of 2024 saw a revenue decline of 6% year-on-year, but a 7% increase quarter-on-quarter, indicating potential for recovery [5][6]. - The decline in profits is attributed to reduced trading volumes and lower IPO activity, but strong performance in derivatives trading has partially offset these declines [5][6]. Financial Overview - In Q1 2024, the company reported total revenue and other income of 52.01 billion HKD, with a core business revenue of 47 billion HKD [4][5]. - EBITDA for the quarter was 37.1 billion HKD, reflecting a 12% year-on-year decrease [4][5]. - Net profit attributable to shareholders was 29.7 billion HKD, down 13% year-on-year but up 14% quarter-on-quarter [4][5]. Segment Performance - Trading and transaction system fees amounted to 15.8 billion HKD, a 7% decrease year-on-year due to lower trading volumes [6]. - Listing fees decreased by 13% year-on-year to 3.7 billion HKD, influenced by a reduction in the number of IPOs [6]. - Investment income was reported at 13.4 billion HKD, down 13% year-on-year, primarily due to reduced returns from external portfolios [6]. Market Performance - The cash market ADT for Q1 2024 was 994 billion HKD, a 22% decline year-on-year, while the Northbound ADT increased by 37% year-on-year [7]. - The IPO market saw a decrease in the number of new listings, with only 12 companies listed in Q1 2024, down from 18 in the same period last year [7]. - Despite the current market challenges, there is optimism for gradual recovery, supported by a healthy pipeline of 85 active IPO applications as of March 2024 [7].

Investment Rating - The investment rating for Hong Kong Stock Exchange is "Buy" (maintained) [2][13]. Core Views - The company's diversified development strategy remains resilient, with a focus on positive policy catalysts in the Hong Kong stock market [2]. - The Q1 2024 performance showed a decline in revenue and net profit due to a high base effect and weak spot trading, but the diversified strategy is expected to yield benefits [2]. - The report highlights the importance of cyclical turning points, the effectiveness of the company's diversification strategy, and supportive policies for liquidity improvement [2]. Financial Performance Summary - Q1 2024 revenue and net profit were HKD 52.0 billion and HKD 29.7 billion, respectively, representing a year-on-year decline of 6% and 13%, but a quarter-on-quarter increase of 7% and 14% [2]. - The EBITDA margin and ROE were 72% and 24.2%, down by 4 percentage points and 3.5 percentage points year-on-year [2]. - The forecast for net profit for 2024-2026 has been adjusted to HKD 123.7 billion, HKD 131.9 billion, and HKD 142.2 billion, respectively, with corresponding EPS of HKD 9.8, HKD 10.4, and HKD 11.2 [2]. Business Segment Analysis - **Trading and Settlement Business**: Spot trading remains weak, but northbound trading and derivatives show resilience. Q1 2024 trading fees and settlement fees were HKD 15.8 billion and HKD 11.0 billion, with year-on-year changes of -12.7% and +2.5% [2]. - **Investment Segment**: Investment income was HKD 13.4 billion, down 12.6% year-on-year, primarily due to a decline in margin requirements [2]. - **Listing and Other Income**: Listing fees were HKD 3.7 billion, down 12.7% year-on-year, with a total of 12 IPOs in Q1 2024, a decrease of 33.3% [2]. Market and Policy Environment - The report emphasizes the cyclical recovery of the domestic economy and global liquidity, with expected benefits from supportive policies aimed at enhancing liquidity in the Hong Kong stock market [2]. - The China Securities Regulatory Commission has introduced measures to promote cooperation with Hong Kong's capital market, which is expected to enhance the liquidity and attractiveness of the Hong Kong Stock Exchange [6][7].