Zhi Tong Cai Jing·2025-10-21 01:37Core Viewpoint - CICC has raised its profit forecast for Hong Kong Exchanges and Clearing (HKEX) for 2025 by 3% to HKD 17.1 billion, while maintaining the 2026 forecast largely unchanged. The current trading multiples are at 31x for both 2025 and 2026 P/E, with a target price of HKD 500, indicating an 18% upside potential [1]. Group 1 - The forecast for Q3 2025 indicates a year-on-year profit increase of 49% and a quarter-on-quarter increase of 5% [2]. - CICC expects Q3 revenue to rise by 40% year-on-year and 4% quarter-on-quarter to HKD 75.3 billion, with core fee income projected to increase by 57% year-on-year and 18% quarter-on-quarter to HKD 65.1 billion [2]. - CICC anticipates total revenue and profit for the first three quarters of 2025 to increase by 35% and 42% year-on-year, reaching HKD 216.1 billion and HKD 132.0 billion, respectively [2]. Group 2 - Trading activity remains robust, with Q3 average daily turnover (ADT) expected to rise by 141% year-on-year and 20% quarter-on-quarter to HKD 286.4 billion [2]. - Southbound ADT is projected to increase by 285% year-on-year and 36% quarter-on-quarter to HKD 152.5 billion, accounting for 26.6% of Hong Kong stocks [2]. - The number of IPOs in Q3 is expected to reach 25, raising HKD 73.5 billion, which is a 74% year-on-year increase but a 19% quarter-on-quarter decrease [2]. Group 3 - Investment income is expected to decline by 18% year-on-year and 36% quarter-on-quarter to HKD 9.9 billion in Q3 2025 [3]. - The narrowing of margin interest spreads is anticipated due to a decline in long-term yields and a rise in short-term borrowing costs, which may negatively impact investment income [3]. - Market volatility is expected to decrease, leading to a reduction in margin requirements for derivatives trading, further affecting investment income performance [3]. Group 4 - The fundamental outlook for HKEX remains strong, with high trading activity supported by a favorable liquidity environment for foreign capital [4]. - The average daily turnover for Hong Kong stocks reached HKD 288 billion in October, indicating sustained high trading activity [4]. - CICC suggests that the anticipated easing of monetary policy by the Federal Reserve could support liquidity in the Hong Kong market, presenting potential investment opportunities [4].