HKEX(00388) 华创证券·2024-10-24 08:08Investment 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 Hong Kong Exchanges and Clearing Limited 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, up 0.1% year-on-year [1]. - The report emphasizes the positive impact of increased market activity on trading and settlement fees, which have risen as a proportion of total revenue [1]. - The report notes that the trading fees for the cash segment reached HKD 2.196 billion, reflecting a year-on-year increase of 0.5%, indicating a recovery in trading activity [1]. Summary by Sections Financial Performance - For Q3 2024, the company reported revenue of HKD 5.372 billion, a year-on-year increase of 5.7%, and a net profit of HKD 3.145 billion, up 6.5% year-on-year [1]. - The average daily trading value of stock products on the exchange increased by 5% year-on-year to HKD 1,027 billion for the first three quarters, with a significant jump of 23% in Q3 [1]. Revenue Structure - The revenue structure shows that trading and transaction system 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]. - Listing fees from the exchange accounted for 6.8% of total revenue, down 0.6 percentage points year-on-year, while investment income netted 23.3% of total revenue, a decline of 1.5 percentage points [1]. Market Activity - The report indicates that the cash segment's trading fees have shown signs of recovery, with the average daily trading value in Q3 reaching HKD 1,072 billion, marking a significant increase [1]. - The report also highlights the positive effects of favorable policies from mainland China, which have boosted trading activity and the performance of the Hang Seng Index [1]. Investment Outlook - The report projects an increase in earnings per share (EPS) for 2024, 2025, and 2026, estimating EPS at HKD 9.84, HKD 10.78, and HKD 11.78 respectively, with corresponding price-to-earnings (PE) ratios of 32, 29, and 27 times [1]. - The report suggests that the company is well-positioned to benefit from improved market conditions and increased trading activity, particularly as the Federal Reserve's interest rate cuts may enhance market liquidity [1].