Ping An Securities·2024-02-29 16:00Investment Rating - The report maintains a "Buy" recommendation for Hong Kong Exchanges and Clearing Limited (0388.HK) [2][7] Core Views - The company's annual performance demonstrates resilience, with total revenue of HKD 20.516 billion, a year-on-year increase of 11.16%, and a net profit attributable to shareholders of HKD 11.862 billion, up 17.70% year-on-year [4][5] - Despite a challenging trading environment, high interest rates have boosted investment income, leading to a significant increase in net investment income by 266% year-on-year to HKD 49.6 billion [7] - The report highlights ongoing reforms and innovations within the company, which are expected to enhance its long-term growth potential [7] Summary by Sections Financial Performance - Total revenue for the year reached HKD 20.516 billion, with a year-on-year growth of 11.16% - Net profit attributable to shareholders was HKD 11.862 billion, reflecting a year-on-year increase of 17.70% - The return on equity (ROE) for the year was 23.5%, an increase of 3.2 percentage points year-on-year [4][6] Revenue Breakdown - Revenue from trading fees decreased by 11%, while investment income surged by 266%, indicating a shift in revenue structure towards stronger investment performance [5][7] - The average daily trading volume for the year was HKD 1,050 billion, down 16% year-on-year, with a notable decline in IPO activities [5][7] Future Outlook - The report anticipates that if the Federal Reserve enters a rate-cutting cycle, it could alleviate liquidity pressures in the Hong Kong market, potentially improving trading volumes and related revenues [7] - The company is expected to continue benefiting from its role as a key financial infrastructure connecting domestic and global markets, with ongoing reforms aimed at attracting more listings and investments [7]