HKEX(00388) 东吴证券·2024-05-09 08:32Investment Rating - The investment rating for Hong Kong Stock Exchange (00388.HK) is "Buy" (maintained) [1] Core Views - The report emphasizes that the Hong Kong capital market is entering a significant policy dividend period, with the Hong Kong Stock Exchange positioned to embark on a new journey due to favorable external conditions [3][10]. Summary by Sections 1. Capital Market Cooperation Measures - The China Securities Regulatory Commission (CSRC) announced five measures to enhance cooperation with Hong Kong, including expanding the eligible products for Stock Connect, incorporating REITs into Stock Connect, and supporting the inclusion of RMB trading counters in the Hong Kong Stock Connect [3][11][12]. - The ETF market in Hong Kong has seen substantial growth, with annual trading volume increasing from USD 1.7 billion in 2003 to USD 435.1 billion in 2023, reflecting a compound annual growth rate of 32% [15][16]. 2. Expectations from Two Sessions Proposals - Proposals from the Two Sessions are expected to gradually materialize, including potential reductions in dividend tax for Hong Kong Stock Connect investors, which could enhance investment interest in high-dividend assets [25][28]. - The report anticipates that the expansion of financial derivatives related to mainland assets will further attract overseas investors to the Hong Kong market [10][25]. 3. Earnings Forecast and Valuation - The forecast for the Hong Kong Stock Exchange's net profit for 2024-2026 is projected at HKD 121.24 billion, HKD 131.63 billion, and HKD 141.33 billion, with corresponding growth rates of 2.21%, 8.57%, and 7.37% respectively [3][10]. - The current market valuation corresponds to a P/E ratio of 28.17x for 2024, 25.95x for 2025, and 24.17x for 2026 [2][3].