GUOTAI HAITONG SECURITIES·2026-02-28 02:25Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388) with a target price raised to HKD 502, corresponding to a 35x PE for 2025 [1][9]. Core Insights - The report highlights that the Hong Kong stock exchange benefited from high trading activity and an increase in margin investment, which offset the decline in yield, leading to better-than-expected profits in the fourth quarter [2][9]. - The continuous expansion of the Hong Kong stock market and the broadening of its service boundaries are expected to sustain the long-term profitability of the exchange [2][9]. - The report projects total revenue and net profit for 2025 to be HKD 291.6 billion and HKD 177.5 billion, respectively, representing year-on-year growth of 30% and 36% [9]. Financial Summary - Total revenue for 2024A is projected at HKD 22,374 million, increasing to HKD 29,161 million in 2025A, with a growth rate of 30.3% [4][10]. - Net profit is expected to rise from HKD 13,050 million in 2024A to HKD 17,754 million in 2025A, reflecting a growth rate of 36.0% [4][10]. - The report provides a breakdown of revenue sources for 2025, with significant contributions from spot trading (HKD 147 million, +56% YoY) and equity derivatives (HKD 69 million, +11% YoY) [9][10]. Market Data - The current stock price is HKD 415.40, with a market capitalization of HKD 526,659 million and a 52-week price range of HKD 297.00 to HKD 462.80 [6][9]. - The report indicates that the stock's price-to-earnings (PE) ratio is projected to decrease from 40.4 in 2024A to 29.66 in 2025A, indicating improved valuation [4][10]. Growth Drivers - The report emphasizes that the growth of the Hong Kong stock exchange is closely tied to the expansion of the Hong Kong stock market and the increasing demand for IPOs, particularly from mainland companies seeking internationalization [9][10]. - The anticipated improvement in overseas liquidity and domestic economic stabilization policies are expected to maintain high levels of investment activity in the Hong Kong stock market [9].