Ping An Securities·2026-03-02 07:06Investment Rating - The investment rating for the company is "Recommended" [2][3] Core Views - The report highlights that the Hong Kong Stock Exchange (HKEX) has experienced strong growth in revenue and profit due to a vibrant market environment, with a 37% year-over-year increase in revenue to HKD 23.745 billion and a 36% increase in net profit to HKD 17.754 billion for the fiscal year 2025 [3][6] - The report emphasizes the robust performance across various segments, with trading fees and system usage fees increasing by 44%, settlement and clearing fees by 49%, and listing fees by 21% [6] - The report notes that the average daily trading volume for securities products increased by 93% year-over-year to HKD 231.5 billion, driven by a 27.7% rise in the Hang Seng Index [6] Summary by Relevant Sections Financial Performance - For the fiscal year 2025, the company achieved total revenue of HKD 23.745 billion, a 37% increase year-over-year, and a net profit of HKD 17.754 billion, also up 36% year-over-year [3][6] - The return on equity (ROE) for 2025 was reported at 30.5%, reflecting a 6.3 percentage point increase year-over-year [6] Revenue Breakdown - Revenue from the cash market segment grew by 58%, while revenue from equity securities and financial derivatives increased by 18% [6] - The report indicates that the IPO market was particularly strong, with 119 IPOs raising HKD 645.9 billion, a 236% increase year-over-year [6] Future Projections - Revenue projections for 2026 to 2028 are estimated at HKD 31.273 billion, HKD 32.671 billion, and HKD 34.135 billion, respectively, with corresponding year-over-year growth rates of 7.2%, 4.5%, and 4.5% [5] - The projected net profit for 2026 to 2028 is expected to be HKD 19.087 billion, HKD 20.048 billion, and HKD 21.006 billion, with growth rates of 7.5%, 5.0%, and 4.8% respectively [5][6] Valuation Metrics - The report provides a price-to-earnings (P/E) ratio forecast of 27.8x for 2026, 26.5x for 2027, and 25.3x for 2028, indicating a gradual decline in valuation multiples [5][6] - The price-to-book (P/B) ratio is projected to decrease from 9.1 in 2025 to 8.3 by 2028 [5][6]