Group 1 - The Hong Kong Stock Exchange is preparing multiple optimization measures for the Stock Connect program, including the introduction of block trading and the inclusion of Real Estate Investment Trusts (REITs) [1] - The measures will also incorporate RMB stock trading counters into the Hong Kong Stock Connect [1] - These optimizations aim to provide more opportunities and choices for international and domestic investors in asset allocation [2]

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) has released a white paper celebrating the tenth anniversary of the mutual market access between Mainland China and Hong Kong, emphasizing its commitment to further collaboration and enhancement of market connectivity [1] Group 1: Market Development - HKEX aims to continue working closely with Mainland partners and market participants under the guidance of regulatory authorities to enrich product categories and expand the range of underlying assets [1] - The exchange plans to continuously optimize the trading mechanisms and supporting services of the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect [1] Group 2: Investor Engagement - HKEX is exploring additional measures to enhance investor participation and convenience in the market [1] - The exchange is committed to improving arrangements for Bond Connect and Swap Connect to facilitate cross-border investment [1]

Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Insights - The company reported a revenue of 15.993 billion HKD for the first three quarters of 2024, representing a year-on-year increase of 2%, with a net profit of 9.270 billion HKD, which is a slight increase of 0.1% year-on-year. The growth is attributed to economic stimulus measures from mainland China and global central banks adopting monetary easing policies, leading to improved investment sentiment [4][10] - The average daily trading volume for the stock market has reached new highs, with the Northbound and Southbound trading of the Shanghai-Hong Kong Stock Connect averaging 123.3 billion HKD and 38.3 billion HKD respectively, showing increases of 14.0% and 19.3% year-on-year [4] - The company maintains a reasonable valuation range of 353.20 to 368.20 HKD, with estimated revenues for 2024, 2025, and 2026 projected at 22.917 billion HKD, 24.885 billion HKD, and 26.848 billion HKD respectively, reflecting year-on-year growth rates of 12%, 9%, and 8% [4][13] Summary by Sections Financial Performance - For Q3 2024, the company achieved revenue of 5.372 billion HKD, a year-on-year increase of 6%, while net profit was 3.145 billion HKD, up 7% year-on-year [4] - The return on equity (ROE) for the first three quarters was 18.2%, a decrease of 0.6 percentage points year-on-year [4] Trading Activity - The cash market segment generated revenue of 6.351 billion HKD, a year-on-year increase of 1.9%, accounting for 40% of total revenue. The average daily trading amount in the cash market increased by 3% to 113.3 billion HKD [4] - The derivatives market saw a record number of contracts traded, with a total of 1.516 million contracts in Q3, marking a 12% increase year-on-year [4] Project and Investment Income - The company’s project income for the first three quarters was 1.466 billion HKD, a year-on-year increase of 17.7%, with internal investment income of 1.408 billion HKD, reflecting a year-on-year increase of 19.6% [4] - The annualized investment return was 5.48%, an increase of 0.93 percentage points year-on-year [4] Valuation and Estimates - The estimated earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 10.32 HKD, 11.22 HKD, and 12.07 HKD respectively, with corresponding price-to-earnings (PE) ratios of 34.2 to 35.7 for 2024 [10][13]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) with a target price of HKD 377.3, compared to the current price of HKD 314.8 [1]. Core Views - The report highlights that the Hong Kong Exchanges and Clearing Limited achieved a revenue of HKD 15.993 billion for the first three quarters of 2024, representing a year-on-year increase of 2.1%, and a net profit attributable to shareholders of HKD 9.270 billion, up 0.1% year-on-year [1]. - The report emphasizes the positive impact of increased market activity on trading and settlement fees, which have risen as a proportion of total revenue [1]. - The report notes that the trading fees for the cash segment reached HKD 2.196 billion, reflecting a year-on-year increase of 0.5%, indicating a recovery in trading activity [1]. Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of HKD 5.372 billion, a year-on-year increase of 5.7%, and a net profit of HKD 3.145 billion, up 6.5% year-on-year [1]. - The average daily trading value of stock products on the exchange increased by 5% year-on-year to HKD 1,027 billion for the first three quarters, with a significant jump of 23% in Q3 [1]. Revenue Structure - The revenue structure shows that trading and transaction system usage fees, along with settlement and clearing fees, accounted for 56.6% of total revenue, an increase of 2.0 percentage points year-on-year [1]. - Listing fees from the exchange accounted for 6.8% of total revenue, down 0.6 percentage points year-on-year, while investment income netted 23.3% of total revenue, a decline of 1.5 percentage points [1]. Market Activity - The report indicates that the cash segment's trading fees have shown signs of recovery, with the average daily trading value in Q3 reaching HKD 1,072 billion, marking a significant increase [1]. - The report also highlights the positive effects of favorable policies from mainland China, which have boosted trading activity and the performance of the Hang Seng Index [1]. Investment Outlook - The report projects an increase in earnings per share (EPS) for 2024, 2025, and 2026, estimating EPS at HKD 9.84, HKD 10.78, and HKD 11.78 respectively, with corresponding price-to-earnings (PE) ratios of 32, 29, and 27 times [1]. - The report suggests that the company is well-positioned to benefit from improved market conditions and increased trading activity, particularly as the Federal Reserve's interest rate cuts may enhance market liquidity [1].

Investment Rating - The report maintains a "Buy" recommendation for Hong Kong Exchanges and Clearing Limited (0388.HK) [1] Core Views - The trading sentiment has improved, and there is a focus on performance and valuation recovery [1] - The company's total revenue for Q3 2024 was HKD 15.993 billion, a year-on-year increase of 2.13% [4] - The net profit attributable to shareholders for Q3 2024 was HKD 9.270 billion, reflecting a year-on-year increase of 0.05% [4] - The report highlights a significant rebound in the spot market trading volume in September, contributing to the positive performance [4][9] Financial Performance Summary - For the first three quarters of 2024, the net profit attributable to shareholders turned positive year-on-year, with a margin of 58.0% [4] - Revenue from the spot trading segment increased by 2% year-on-year, while the derivatives segment faced a 10% decline [4] - The average daily trading volume in the LME segment increased by 25% year-on-year, with trading fee income rising by 39% [9] - The report projects an increase in net profit for 2024, 2025, and 2026 to HKD 128 billion, HKD 133 billion, and HKD 139 billion respectively, with corresponding year-on-year changes of +8%, +4%, and +5% [9] Market Conditions - The Hang Seng Index saw a strong rebound in mid-September, increasing by 19.3% in Q3 2024 [4] - The average daily trading amount in the spot market reached HKD 169.2 billion in September, marking a peak since April 2022 [4] - The report notes that the IPO fundraising amount for the first nine months of 2024 was HKD 55.6 billion, a year-on-year increase of 123% [4] Future Outlook - The report emphasizes the importance of Hong Kong Exchanges as a key financial infrastructure connecting domestic and global markets, especially under the backdrop of policies promoting high-quality opening of the mainland capital market [9] - The anticipated optimization of the new listing application approval process by the Hong Kong Securities and Futures Commission is expected to enhance the attractiveness of the exchange [9]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) with a target price of HKD 377.3, compared to the current price of HKD 314.8 [1]. Core Views - The report highlights that the company achieved a revenue of HKD 15.993 billion for the first three quarters of 2024, representing a year-on-year increase of 2.1%, and a net profit attributable to shareholders of HKD 9.270 billion, which is a slight increase of 0.1% year-on-year [1]. - In Q3 2024, the company reported revenue of HKD 5.372 billion, up 5.7% year-on-year, and a net profit of HKD 3.145 billion, reflecting a year-on-year growth of 6.5% [1]. - The report emphasizes the recovery in trading activity driven by favorable market conditions, with trading fees and settlement fees increasing as a percentage of total revenue [1]. Summary by Sections Revenue Structure - The revenue sources of Hong Kong Exchanges include trading and trading system usage fees, settlement and clearing fees, listing fees, custody and agency services fees, investment income, and market data fees. For Q1-Q3 2024, trading system and usage fees, along with settlement and clearing fees, accounted for 56.6% of total revenue, an increase of 2.0 percentage points year-on-year [1]. - The average daily trading amount of equity securities products on the exchange reached HKD 1,027 billion, a year-on-year increase of 5%. In Q3, this figure surged by 23% to HKD 1,072 billion, indicating a significant uptick in trading activity [1]. Investment Income - Investment income netted HKD 3.728 billion in Q1-Q3 2024, down 4.1% year-on-year. The annualized investment yield for margin and clearing house funds decreased slightly to 1.61% [1]. - The report notes a strategic shift in the company's external investment portfolio, with a significant reduction in equity securities and an increase in government bonds and mortgage securities, aimed at stabilizing income [1]. Earnings Forecast - The report projects earnings per share (EPS) for 2024, 2025, and 2026 to be HKD 9.84, HKD 10.78, and HKD 11.78 respectively, with corresponding price-to-earnings (PE) ratios of 32, 29, and 27 times [2][3]. - The company is expected to benefit from improved market liquidity and favorable policies from mainland China, enhancing its role as a key connector between China and the global market [1].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its performance relative to the market [3][10]. Core Insights - The company's performance in Q3 2024 showed a year-on-year increase of 7%, driven by improved liquidity and supportive policies, leading to record trading volumes in the Hong Kong stock market [3][4]. - Total revenue for the first nine months of 2024 reached HKD 159.9 billion, a 2% increase year-on-year, with net profit remaining stable at HKD 92.7 billion [3][4]. - The report highlights a significant increase in IPO fundraising, with Q3 2024 seeing a 391% quarter-on-quarter growth, attributed to major listings such as Midea Group [3][4]. Summary by Sections Financial Performance - For the first nine months of 2024, the company achieved total revenue of HKD 159.9 billion, up 2% year-on-year, and a net profit of HKD 92.7 billion, unchanged from the previous year [3][4]. - Q3 2024 net profit was HKD 31.5 billion, reflecting a 7% increase year-on-year [3]. Revenue Breakdown - The revenue contribution from trading and settlement fees increased to 56% in 9M24, up from 53% in 9M23, driven by a recovery in Average Daily Turnover (ADT) [3]. - Revenue from various segments for 9M24 included: - Spot trading: HKD 6.35 billion (+2%) - Equity securities and derivatives: HKD 4.52 billion (-10%) - Commodities: HKD 2.1 billion (+31%) - Data and connectivity: HKD 1.56 billion (+1%) - Company projects: HKD 1.47 billion (+18%) [3][4]. Market Trends - The report notes that the Hong Kong stock market's ADT reached historical highs, with significant contributions from both southbound and northbound trading [3]. - The report anticipates continued positive sentiment in the Hong Kong IPO market due to recent regulatory changes aimed at expediting the listing process [3][4]. Profitability Forecast - The company has adjusted its profit forecasts upward, expecting net profits of HKD 128 billion, HKD 139 billion, and HKD 151 billion for 2024, 2025, and 2026 respectively, reflecting year-on-year growth of 8%, 9%, and 8% [3][4].

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (388 HK) is "Buy" with a target price of HKD 404.00 [1][4]. Core Views - The report indicates that the performance in Q3 2024 was supported by a recovery in trading volume, with revenue and net profit reaching HKD 5.37 billion and HKD 3.15 billion respectively, reflecting year-on-year increases of 5.7% and 6.5% [1]. - The average daily trading volume (ADT) for Q3 2024 was HKD 118.8 billion, showing a significant increase from the lowest point of HKD 95 billion in late August [1]. - The report anticipates continued high trading activity in October, with ADT potentially reaching historical highs, supported by expected interest rate cuts from the Federal Reserve [1][2]. Summary by Sections Trading Business - Q3 2024 saw a stable trading volume with an ADT of HKD 118.8 billion, slightly down from HKD 121.6 billion in Q2 2024. The derivatives and commodities markets experienced a decline, with LME ADV at 642,000 contracts and derivatives contract ADV at 1.482 million contracts [1]. - Interconnectivity revenue for Q3 2024 was HKD 581 million, with northbound and southbound ADT at RMB 1.103 billion and HKD 396 million respectively [1]. IPO Activity - The number of IPOs in Q3 2024 decreased to 15 from 18 in Q2 2024, but the total financing amount increased significantly to HKD 42.2 billion, primarily due to Midea Group's IPO [1]. Investment Performance - Total investment funds stood at HKD 226.8 billion in Q3 2024, with an overall investment return of 2.1%. The return on margin and clearing house funds decreased to 1.45%, while the company's fund return increased to 5.91% [2]. Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders for 2024, 2025, and 2026 has been adjusted to HKD 12.5 billion, HKD 13.2 billion, and HKD 13.8 billion respectively. The target price remains at HKD 404, with the current stock price trading at 30.2x 2025E PE [2][3].

股 票 研 究 证 券 研 究 报 告 单季利润环比持平，期待 Q4 业绩释放 香港交易所(0388) [Table_Industry] 综合金融 [Table_Invest] 评级： 增持 ——香港交易所 2024 年三季报点评 | --- | --- | --- | --- | |----------|-------------------------------------|---------------------------|---------------------------| | | | | | | | [table_Authors] 刘欣琦 ( 分析师 ) | 吴浩东 ( 分析师 ) | 王思 玥 ( 研究助理 ) | | | 021-38676647 | 010-83939780 | 021-38031024 | | | liuxinqi@gtjas.com | wuhaodong029780@gtjas.com | wangsiyue028676@gtjas.com | | 登记编号 | S0880515050001 | S0880524070001 | S0880123070151 | ...

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (00388) is "Buy" (maintained) [3]. Core Views - The report highlights that the company achieved a record high quarterly profit in Q3 2024, with expectations for further performance improvement as the market recovers [3][5]. - The total revenue and other income for the first three quarters of 2024 reached HKD 15.993 billion, a year-on-year increase of 2%, while the net profit attributable to shareholders was HKD 9.27 billion, remaining flat compared to the previous year [2][5]. Summary by Sections Financial Performance - In Q3 2024, the company reported revenue and other income of HKD 5.372 billion, a year-on-year increase of 6% but a quarter-on-quarter decrease of 1%. The net profit for the quarter was HKD 3.145 billion, reflecting a year-on-year increase of 7% and flat compared to the previous quarter [2][5]. - The company’s trading and settlement fees increased due to a rise in average daily trading volume (ADT) in the cash, derivatives, and commodities markets [5]. Segment Performance - Trading and trading system usage fees for the first three quarters of 2024 amounted to HKD 4.979 billion, up 6% year-on-year, driven by improved trading activity due to economic stimulus policies [5]. - Investment income for the first three quarters was HKD 3.728 billion, a decrease of 4% year-on-year, primarily due to reduced investment income from margin and settlement funds [5]. Market Outlook - The report indicates a recovery in market trading activity, with the cash market ADT reaching HKD 113.3 billion for the first three quarters, a year-on-year increase of 3% [5]. - The IPO market showed signs of recovery, with 42 companies listed on the main board in the first three quarters, raising HKD 55.6 billion, a year-on-year increase of 126% [5]. Earnings Forecast and Valuation - The company is expected to achieve total revenues of HKD 21.927 billion, HKD 23.768 billion, and HKD 26.393 billion for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 7%, 8%, and 11% [5][6]. - The net profit attributable to shareholders is projected to be HKD 12.398 billion, HKD 12.980 billion, and HKD 14.324 billion for the same years, with growth rates of 5% for both 2024 and 2025, and 10% for 2026 [5][6].