Guoxin Securities·2026-02-28 02:50Investment 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, with a growth of 36.0% [1][8]. - The significant growth is driven by the increased trading activity in the Hong Kong stock market, with an average daily turnover (ADT) of HKD 2.315 trillion, a substantial increase of 92.9% year-on-year [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, highlighting the strong scale effects and high profitability of its asset-light operating model [1][8]. Revenue Structure - The main sources of revenue are trading fees and transaction system usage fees, along with settlement and clearing fees, which together accounted for 73.2% of total revenue in 2025 [2][8]. - The southbound capital flow has been a major driver of the increase in average daily turnover, with the southbound trading average reaching HKD 1.211 trillion, representing 26.2% of the total [2][13]. Market Context - The Hong Kong stock market is expected to continue attracting incremental capital, with both challenges and opportunities for technology stocks [2][21]. - Despite a slowdown in initial public offerings since 2021, many high-quality A-share companies have been listed in Hong Kong since 2024, injecting new vitality into the market [2][19]. Strategic Initiatives - The company is focused on deepening connectivity, enhancing market vitality, exploring innovative businesses, and strengthening technological empowerment [3][24]. - Key initiatives include optimizing and expanding the scope of the Stock Connect program, attracting quality assets through listing rule reforms, and developing non-traditional businesses such as data connectivity [3][25]. Financial Forecasts - 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 high gross margin characteristics of the asset-light model [24].