Shenwan Hongyuan Securities·2025-08-20 12:41Investment Rating - The report maintains a "Buy" rating for the company [2][17] Core Views - The company reported strong performance in 1H25, with total revenue reaching HKD 14.08 billion, a year-on-year increase of 33%. Main revenue was HKD 12.95 billion, up 34% year-on-year, and net profit was HKD 8.52 billion, up 39% year-on-year [5][7] - The report highlights that the company achieved record high revenue and net profit for the same period, driven by strong trading volumes and a resurgence in IPO activities, positioning it back at the top of the global IPO rankings [5][7] - The report projects an increase in net profit for 2025-2027, with estimates of HKD 16.93 billion, HKD 17.94 billion, and HKD 18.78 billion respectively, reflecting year-on-year growth rates of 30%, 6%, and 5% [6][7] Financial Data and Earnings Forecast - The company’s revenue is forecasted to grow from HKD 20.52 billion in 2023 to HKD 29.86 billion in 2027, with a compound annual growth rate (CAGR) of approximately 8% [6][8] - The net profit is expected to increase from HKD 11.86 billion in 2023 to HKD 18.78 billion in 2027, with a CAGR of around 9% [6][8] - The report indicates a significant improvement in EBITDA margin, projected to reach 79% in 1H25, up 6 percentage points year-on-year [5][7] Revenue Breakdown - The revenue breakdown for 1H25 shows that trading fees contributed HKD 4.91 billion (38%), settlement and clearing fees contributed HKD 3.16 billion (24%), and investment income contributed HKD 2.88 billion (22%) [7] - The report notes that all business segments, except for market data fees, achieved double-digit year-on-year growth, with trading fees and settlement fees increasing by over 40% [7] Market Performance - The average daily trading (ADT) for cash stocks in 2Q25 was HKD 220.3 billion, a year-on-year increase of 97%, while the average daily volume (ADV) for derivatives decreased [7] - The report emphasizes the strong performance of the IPO market, with 44 new listings in 1H25 raising HKD 109.4 billion, an eightfold increase compared to the same period last year [7]