HKEX(00388) 华创证券·2024-08-22 10:13Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) with a target price of HKD 253.8 [1][2][6]. Core Views - The report highlights that the trading activity is showing marginal improvement, demonstrating resilience in performance despite a slight decline in net profit [1][2]. - The core drivers of the company's performance are linked to the trading activity in the Hong Kong stock market, with expectations of improved liquidity as the Federal Reserve enters a rate-cutting cycle [2][6]. Financial Performance Summary - For the first half of 2024, the company reported total revenue of HKD 10.621 billion, a year-on-year increase of 0.4%, and a net profit of HKD 6.125 billion, a year-on-year decrease of 3.0% [1]. - In Q2 2024, the revenue was HKD 5.420 billion, reflecting a quarter-on-quarter increase of 4.2%, while net profit was HKD 3.155 billion, up 6.2% quarter-on-quarter [1]. - The revenue structure shows a decrease in the proportion of listing fees and net investment income, with trading and transaction system usage fees, settlement and clearing fees, and custodian services accounting for 56.1% of total revenue [1][2]. Revenue Breakdown - The average daily trading volume for stock products in H1 2024 was HKD 100.3 billion, a year-on-year decrease of 2.5%, but showed a quarter-on-quarter increase of 25.5% in Q2 2024 [2]. - The average daily trading volume for northbound trading reached RMB 130.2 billion, a year-on-year increase of 19.1%, while southbound trading averaged HKD 37.5 billion, a year-on-year increase of 10.9% [2]. - The listing fees for H1 2024 were HKD 431 million, down 3.8% year-on-year, with 29 new listings on the main board, a decrease of 4 from the previous year [2]. Future Outlook - The report projects earnings per share (EPS) for 2024, 2025, and 2026 to be HKD 9.76, HKD 10.59, and HKD 11.45 respectively, with corresponding price-to-earnings (PE) ratios of 23, 22, and 20 times [2][6]. - The report anticipates that the unique monopolistic position and diversified business model of the exchange will continue to drive growth in various business segments [2].