HKEX(00388) 华创证券·2024-10-24 07:07Investment 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].