Western Securities·2025-11-06 08:16Investment Rating - The report maintains a "Buy" rating for the company [6][3] Core Insights - The Hong Kong Stock Exchange (HKEX) reported record high profits driven by high trading activity, with revenue and net profit for the first three quarters of 2025 reaching HKD 218.5 billion and HKD 134.2 billion, respectively, representing year-on-year increases of 36.6% and 44.8% [1][6] - In Q3 2025 alone, the company achieved revenues and net profits of HKD 77.8 billion and HKD 49.0 billion, marking year-on-year increases of 44.7% and 55.8%, and quarter-on-quarter increases of 8% and 10% [1][6] - The report highlights significant growth in various segments, including trading, listing, clearing, custody, data, and investment income, with year-on-year increases of 57.3%, 17.1%, 65.7%, 24.9%, 8.1%, 10.3%, and 4.4%, respectively [1] Summary by Sections Financial Performance - For the first three quarters of 2025, the average daily trading (ADT) in the Hong Kong stock market was approximately HKD 2,564 billion, a year-on-year increase of 126.3%, with Q3 ADT reaching HKD 2,864 billion, up 142.3% year-on-year and 20% quarter-on-quarter [2] - The number of IPOs in the Hong Kong market reached 69 in the first three quarters of 2025, raising HKD 1,883 billion, a year-on-year increase of 238.7% [2] - The report notes that the average daily trading volume for derivatives and LME continued to grow, with contract numbers and commodity ADV increasing by 11% and 4% year-on-year, respectively [2] Investment Income - Margin investment income was a key support for overall investment income, with a 16% increase in margin investment income driven by a 47% year-on-year increase in margin size [3] - The report indicates that external portfolio returns were down 39% year-on-year due to the redemption of external portfolios, which may impact overall investment income for the year [3] Future Outlook - The report expresses optimism regarding the deepening of mutual market access and the appreciation of the Renminbi, leading to an increase in the company's valuation [3] - The forecast for net profit for 2025 has been raised to HKD 180 billion [3]