GUOTAI HAITONG SECURITIES·2025-08-23 12:58Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (0388) is "Buy" [6][10]. Core Insights - The report highlights that the company has benefited from a significant improvement in liquidity in the Hong Kong stock market, leading to record-high profits for the first half of 2025. The expansion of the Hong Kong stock market and the broadening of its service boundaries present a historical opportunity for the company, enhancing its long-term profit potential [2][10]. Financial Summary - Total revenue is projected to grow from HKD 20,516 million in 2023 to HKD 36,368 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 7.3% [4]. - Net profit is expected to increase from HKD 11,862 million in 2023 to HKD 23,390 million in 2027, with a notable growth rate of 38.0% in 2025 [4]. - The price-to-earnings (PE) ratio is forecasted to decrease from 47.1 in 2023 to 23.9 in 2027, indicating an improving valuation as earnings grow [4]. Revenue Breakdown - The revenue from trading fees and trading system usage is expected to rise significantly, contributing 37% of total revenue by 2025, up from 30% in 2023 [11][12]. - The average daily trading (ADT) in the Hong Kong stock market reached HKD 2,402 billion in the first half of 2025, a year-on-year increase of 118% [10]. Growth Catalysts - The report identifies that the improvement in capital market confidence and liquidity is a key driver for the company's performance, with expectations of continued growth in trading activity due to favorable domestic economic policies and overseas liquidity conditions [10]. - The expansion of the Hong Kong stock market and the influx of high-quality mainland enterprises listing in Hong Kong are seen as significant growth opportunities for the company [10].