Guoxin Securities·2026-02-28 01:25Investment Rating - The investment rating for the company is "Outperform the Market" [6][34]. Core Insights - The company achieved a revenue of HKD 29.161 billion in 2025, representing a year-on-year growth of 30.3%, and a net profit of HKD 17.754 billion, up 36.0% year-on-year, driven by increased trading activity in the Hong Kong stock market [1][8]. - The average daily trading volume (ADT) in the cash market reached HKD 231.5 billion in 2025, a significant increase of 92.9% year-on-year, highlighting the strong market demand [1][13]. - The company's EBITDA margin reached a historical high of 78.2%, and the annualized return on equity (ROE) rose to 31.7%, surpassing the previous peak in 2015, indicating robust operational efficiency and profitability [1][8]. Revenue Structure - The primary sources of revenue for the company in 2025 were trading fees and transaction system usage fees, which together accounted for 73.2% of total revenue, closely linked to market trading volumes [2][8]. - The southbound trading (Hong Kong Stock Connect) accounted for an average daily trading volume of HKD 121.1 billion, representing 26.2% of the overall daily trading volume in the Hong Kong stock market [2][13]. Market Context - The Hong Kong stock market is expected to continue attracting incremental capital, with a mix of challenges and opportunities for technology stocks [2][21]. - Despite a slowdown in initial public offerings (IPOs) since 2021, high-quality A-share companies have been listing in Hong Kong, injecting new vitality into the market [2][19]. Strategic Initiatives - The company is focusing on deepening connectivity, enhancing market vitality, exploring innovative businesses, and strengthening technological capabilities to maintain its competitive edge [3][24]. - Key initiatives include expanding the scope of the Stock Connect program and optimizing listing rules to attract quality assets and diverse investors [3][25]. Financial Projections - The company is projected to achieve revenues of HKD 31.886 billion and HKD 34.302 billion in 2026 and 2027, respectively, with net profits expected to reach HKD 19.984 billion and HKD 21.428 billion [4][24]. - The EBITDA margin is expected to remain above 70%, reflecting the company's high gross margin characteristics [24][28].