Zhi Tong Cai Jing·2025-10-13 08:39Core Viewpoint - CITIC Securities maintains a "Buy" rating for Hong Kong Exchanges and Clearing (HKEX) with a target price of 543 HKD, supported by expectations of liquidity from the Federal Reserve's interest rate cuts, continuous inflow of southbound funds, and valuation advantages [1] Group 1: Market Conditions - The Hong Kong stock market is expected to maintain high activity levels in Q4 due to three main factors: the Federal Reserve's shift in monetary policy providing liquidity support, continuous inflow of southbound funds, and significant valuation advantages [2][3] - Since April, HKEX has shown a recovery in overall valuation after a significant decline, driven by high average daily trading volume and sustained buying from southbound funds [1] Group 2: Financial Projections - For Q3 2025, the company is projected to achieve revenue and other income of 79.11 billion HKD, a year-on-year increase of 47.26%, and a net profit attributable to shareholders of 48.24 billion HKD, up 53.38% year-on-year [2] - Revenue forecasts for 2025, 2026, and 2027 are expected to grow by 27.94%, 5.93%, and 1.17% respectively, reaching 286.25 billion HKD, 303.21 billion HKD, and 306.75 billion HKD [2] Group 3: Valuation and Investment Appeal - As of October 10, the PE (TTM) ratio for HKEX is 36.49x, which is at the 72.15%, 71.85%, and 47.43% percentiles for the past 1, 3, and 5 years respectively, indicating a potential for further valuation recovery [1] - The Hang Seng Index's PE-TTM is approximately 11.95x, placing it at the 64th percentile over the past 20 years, highlighting the relative valuation advantage of Hong Kong stocks compared to the CSI 300's 14.24x [3]