Shenwan Hongyuan Securities·2026-02-26 13:04Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [6][4]. Core Insights - The company reported a total revenue of HKD 29.16 billion for 2025, reflecting a year-on-year growth of 30%. The main revenue component was HKD 27.11 billion, with a net profit of HKD 17.75 billion, marking a 36% increase year-on-year [4][6]. - The report highlights a significant increase in fee-related income, with various fee categories showing double-digit growth. Trading fees grew by 44%, and settlement and clearing fees increased by 49% [6][4]. - The report notes a decline in margin investment yields, with the weighted yield for margin financing at 1.31%, down from 1.51% in 2024 [6][4]. Financial Data and Earnings Forecast - The financial projections for the company are as follows: - Revenue for 2026 is estimated at HKD 28.32 billion, a decrease of 3% from 2025, with a net profit forecast of HKD 17.59 billion, a slight decline of 1% [5][7]. - The earnings per share (EPS) for 2026 is projected to be HKD 13.9, with a return on equity (ROE) of 29.8% [5][7]. - The report provides a detailed breakdown of revenue sources, with trading fees contributing 38%, settlement and clearing fees 26%, and investment income 19% [6][7]. Market Position and Trends - The Hong Kong stock market maintained its position as the global leader in IPO fundraising, with 119 new listings in 2025, raising HKD 286.9 billion, a 226% increase year-on-year [6][4]. - The report emphasizes the strong performance of the company's derivatives segment, with an average daily volume (ADV) of 166,000 contracts, a 7% increase year-on-year [6][4]. - The report also notes that the company is well-positioned to benefit from the ongoing deepening of connectivity between Hong Kong and mainland China, which is expected to enhance its market value [6][4].