HKEX(00388) 华泰证券·2025-02-24 15:25Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (388 HK) is "Buy" with a target price of HKD 404.00 [7][8]. Core Views - The report discusses the optimization of the securities market's transaction fee structure, which will eliminate the upper and lower limits on stock and ETP transaction fees, adjusting the new rates to 0.0042% and 0.0020% respectively, effective from June this year. This change is expected to balance transaction costs across different types of trades, potentially increasing revenue volatility for the exchange but having a minimal long-term impact on average fee rates [1][2]. Summary by Sections Transaction Fee Structure - The new fee structure will adjust the transaction fees for general exchange trades to 0.0042% for buyers and sellers, compared to the current rates of 0.0020% and 0.0010%. The minimum and maximum fees will be removed, which currently are HKD 2/1 and HKD 100/50 respectively. In comparison, the A-share market has a transaction fee rate of 0.001% [1][2]. Revenue and Profit Forecast - The report anticipates increased revenue volatility for the exchange due to the removal of fee limits, which will strengthen the correlation between transaction fees and trading volumes. It is estimated that 77% of trades could see reduced transaction costs under the new structure. The average effective transaction fee rate is projected to remain around 0.0042% over the 2019-2024 period, with an average transaction amount of approximately HKD 62,000 [2][4]. Market Activity - As of February 21, 2025, the average daily trading volume for the first quarter of 2025 reached HKD 200.3 billion, up from HKD 186.9 billion in the fourth quarter of 2024. This increase in trading activity is expected to support the exchange's performance and valuation [3]. Earnings and Valuation - The profit forecasts for the years 2024, 2025, and 2026 have been slightly adjusted to HKD 131 billion, HKD 132 billion, and HKD 133 billion respectively. The target price remains at HKD 404, based on a DCF model with a 50-year forecast period and a discount rate of 5% [4][6].