Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [1] Core Views - The report highlights significant growth in trading fees and listing fees, driven by high market activity and low operational expenditure growth [1][2] - The company achieved a revenue of HKD 21.851 billion for the first three quarters of 2025, representing a year-on-year increase of 37%, with net profit rising by 45% to HKD 13.419 billion [1] - The report anticipates continued profitability growth, with projected net profits of HKD 17.786 billion, HKD 19.152 billion, and HKD 20.811 billion for 2025, 2026, and 2027 respectively [4] Revenue Breakdown - Trading and transaction fees, listing fees, settlement and clearing fees, and market data fees showed year-on-year growth rates of 57%, 17%, 66%, and 8% respectively, contributing to the overall revenue [1][2] - The average daily trading volume for equity securities increased by 132% year-on-year, leading to a 123% rise in trading fee income [2] - The number of new listings on the Hong Kong Stock Exchange increased by 24 to a total of 69, with IPO and refinancing amounts growing by 239% and 274% respectively [3] Profitability Forecast - The report projects earnings per share (EPS) of HKD 14.07, HKD 15.12, and HKD 16.40 for the years 2025, 2026, and 2027, with corresponding price-to-earnings (P/E) ratios of 30, 28, and 26 [4][8] - The return on equity (ROE) is expected to rise to 31.8% in 2025, indicating strong profitability [8]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [1] Core Views - The report highlights that Hong Kong Exchanges achieved record high quarterly profits supported by trading volume, with a 33% year-on-year increase in revenue to HKD 14.076 billion and a 39% increase in net profit to HKD 8.519 billion for the first half of 2025 [1][2] - The trading fee income from the stock market saw a significant increase of 112% to HKD 2.556 billion, driven by a 122% year-on-year growth in average daily trading volume [2] - The report anticipates continued growth in net profit for 2025-2027, projecting HKD 17 billion, HKD 18 billion, and HKD 19.6 billion respectively, with corresponding EPS of HKD 13.48, HKD 14.22, and HKD 15.43 [3] Summary by Sections Performance Overview - In 1H25, the revenue breakdown by business lines showed significant growth rates: cash market at 62%, derivatives at 15%, commodities at 8%, data and connectivity at 5%, and company projects at 28% [1] - The trading and transaction system usage fees increased by 49%, while listing fees rose by 30% due to a recovery in the IPO market [2] Revenue and Profit Forecast - The report forecasts revenue growth rates of 26% for 2025, followed by 6% and 7% in subsequent years, with net profit growth rates of 31%, 6%, and 9% respectively [3][7] - The projected P/E ratios for the next three years are 33, 31, and 29 times [3]