Group 1 - Deutsche Bank's stake in Bilibili-W decreased from 23.24% to 22.84% as of May 9 [1]

Group 1 - The central bank and relevant departments have issued a document to support the launch of cross-border cooperation products at the Guangzhou Futures Exchange with the Hong Kong Stock Exchange [1] - The initiative aims to establish convenient trading rules for the spot and futures market, facilitating internal and external market interactions [1] - There is a focus on exploring new models for international cooperation in futures products [1] Group 2 - The Guangzhou Futures Exchange is encouraged to apply for specific futures and options products to allow participation from foreign traders in an orderly manner [1] - Support is provided for the construction of a commodity futures delivery center in Nansha, enhancing the integrated service system covering the spot and futures market [1]

Group 1 - BlackRock's stake in Li Auto-W decreased from 5.00% to 4.93% on May 6 [1]

Investment Rating - The investment rating for Hong Kong Exchanges is "Buy" with a 12-month target price of HK$398, indicating an upside potential of 6.9% from the current price of HK$372.40 [1][3]. Core Insights - The report revises the earnings per share (EPS) estimates for Hong Kong Exchanges for 2025E, 2026E, and 2027E by +2%, +4%, and +4% respectively, based on disclosed April 2025 volumes and May 2025 month-to-date volumes [1]. - The target price increase of 3% from HK$386 to HK$398 is derived from a three-stage Dividend Discount Model (DDM), implying a price-to-earnings (P/E) ratio of 34.5X for 2025E [1][2]. Financial Estimates - Market capitalization is reported at HK$472.1 billion (approximately $60.7 billion) [3]. - Revenue estimates for the upcoming years are as follows: 2024E at HK$22,374 million, 2025E at HK$25,342.7 million, 2026E at HK$25,220.8 million, and 2027E at HK$26,277.5 million [3]. - EPS estimates have been updated to: 2025E at HK$11.53, 2026E at HK$11.25, and 2027E at HK$11.65 [3]. - The report indicates a dividend per share (DPS) of HK$10.38 for 2025E, with a dividend yield of 2.8% [3]. Valuation Metrics - The P/E ratios for the upcoming years are projected as follows: 2025E at 32.3X, 2026E at 33.1X, and 2027E at 32.0X [3]. - The price-to-book (P/B) ratios are estimated at 8.5X for 2025E, 8.2X for 2026E, and 6.5X for 2027E [3]. - Return on equity (ROE) is projected to be 26.7% for 2025E, 25.2% for 2026E, and 22.8% for 2027E [3].

Investment Rating - The report maintains an "Outperform" rating for the company [5][39]. Core Views - The company's Q1 2025 performance shows significant growth driven by the buoyancy of the Hong Kong stock market, with revenue reaching HKD 6.831 billion, a year-on-year increase of 31.3% and a quarter-on-quarter increase of 8.2%. Net profit attributable to shareholders was HKD 4.077 billion, up 37.3% year-on-year and 7.9% quarter-on-quarter [1][8]. - The revenue structure is dominated by trading fees and transaction system usage fees, which accounted for 46.1% and 29.0% of total revenue, respectively, totaling over 75% [1][8]. - The company exhibits a high EBITDA margin of 76.6% in Q1 2025, reflecting significant scale effects [1][8]. - The effective tax rate has increased significantly due to the OECD's "Pillar Two" rules, which may keep the tax rate above 15% in the future, slightly impacting net profit [1][12]. Summary by Sections Company Performance - In Q1 2025, the average daily trading volume (ADT) for cash securities reached HKD 225.4 billion, a remarkable year-on-year increase of 153.0% [2][20]. - The company has a light asset model with high gross margins, where operating expenses were HKD 1.516 billion, with personnel costs making up 64.4% of total expenses [3][35]. - The company maintains a stable dividend payout ratio of around 90%, with a historical dividend yield of 2%-3% over the past decade [3][35]. Market Dynamics - The report highlights that southbound capital is a key driver of trading volume, with the southbound trading ADT for Q1 2025 being HKD 1.099 billion, accounting for 24.4% of the total ADT [2][20]. - The number of mainland companies listing in Hong Kong has become dominant, contributing to a rich pool of quality investment targets [2][26]. Financial Forecasts - Revenue projections for the company show a steady growth trajectory, with expected revenues of HKD 26.237 billion in 2025, reflecting a year-on-year growth of 17.3% [4][47]. - The net profit attributable to shareholders is forecasted to reach HKD 15.428 billion in 2025, with a growth rate of 18.2% [4][47]. - The report anticipates a slight downward adjustment of 5.56% in net profit estimates for 2025-2027 due to the increased tax rate [3][39].

Group 1 - BlackRock's stake in AIA increased from 5.99% to 6.03% on May 5 [1]

Group 1 - FIL Limited increased its stake in Li Ning from 4.92% to 5.05% as of May 2 [1] - The average share price for this transaction was 15.2253 HKD [1]

Group 1 - Citigroup's stake in China Pacific Insurance has decreased from 8.07% to 7.98% as of April 30 [1]

Group 1 - BlackRock's stake in Meituan-W increased from 5.77% to 6.02% as of May 1 [1]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) [2][9]. Core Views - In the medium to long term, the report anticipates that a series of connectivity policies will enhance the basic conditions for recovery in the capital market, leading to sustained liquidity in the Hong Kong stock market and an increase in overall market activity and valuation [2][6]. - The company is projected to achieve revenues and other income of HKD 266.63 billion, 285.26 billion, and 304.86 billion for the years 2025, 2026, and 2027 respectively, with net profit attributable to shareholders of HKD 160.57 billion, 172.00 billion, and 184.36 billion for the same years, corresponding to PE ratios of 26.91, 25.12, and 23.44 [2][6]. Summary by Sections Q1 Performance - In Q1 2025, the company reported revenues and other income of HKD 68.57 billion, a year-on-year increase of 31.84%, and a net profit attributable to shareholders of HKD 40.77 billion, up 37.3% year-on-year [6][9]. - Revenue growth was driven by strong performance across various fee structures, with trading and trading system usage fees increasing by 60.29%, listing fees by 11.78%, and settlement and clearing fees by 56.32% [6][9]. Market Activity - The report highlights a significant increase in trading activity in the cash, derivatives, and commodities markets, with daily average turnover in the cash market rising by 153.0% year-on-year and daily average turnover in the Stock Connect increasing by 43.7% [6][9]. - The increase in trading activity led to a 69.9% year-on-year growth in settlement and clearing fee income [6][9]. Future Projections - The report projects that the company will continue to benefit from enhanced market conditions and connectivity policies, with expected revenue growth and profitability over the next few years [2][6]. - Specific revenue and profit forecasts for 2025 to 2027 indicate a positive outlook for the company's financial performance [10].