Changjiang Securities·2025-08-21 08:42Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) [2][9]. Core Views - The report highlights that the Hong Kong Exchanges has shown strong performance across various business segments, achieving record high mid-year results for 2025. The company reported revenue and other income of HKD 140.76 billion, a year-on-year increase of 32.53%, and a net profit attributable to shareholders of HKD 85.19 billion, up 39.1% year-on-year [6][9]. Summary by Sections Financial Performance - For the first half of 2025, the company achieved a revenue of HKD 140.76 billion, representing a 32.53% increase year-on-year. The net profit attributable to shareholders was HKD 85.19 billion, reflecting a 39.1% year-on-year growth [6][9]. - Revenue breakdown by fee types shows significant growth: trading and trading system usage fees increased by 49.12%, listing fees by 12.55%, settlement and clearing fees by 48.47%, and market data fees by 14.04% [6][9]. Market Activity - The report notes a substantial increase in trading activity across various markets. The average daily turnover for stock securities rose by 122.1%, with the Stock Connect programs showing increases of 31.6% and 196.0% respectively [6][9]. - The derivatives market also saw growth, with trading fees increasing by 13.8% due to heightened activity in stock options and warrants [6][9]. Future Projections - The report projects that from 2025 to 2027, the company will achieve revenues of HKD 283.44 billion, HKD 303.43 billion, and HKD 322.26 billion respectively, with net profits of HKD 176.18 billion, HKD 188.76 billion, and HKD 200.46 billion [2][10]. - The expected price-to-earnings (PE) ratios for these years are 31.75, 29.63, and 27.90 respectively, indicating a positive outlook for the company's valuation [2][10].