Core Insights - Hong Kong Exchanges and Clearing (HKEX) reported a 56% year-on-year increase in net profit for the third quarter, exceeding expectations by 7% [1] - The growth was primarily driven by robust core revenue growth, record average daily trading volume, and strong initial public offering (IPO) momentum [1] - Net interest income decreased by 13.6% year-on-year to HKD 1 billion, impacted by a decline in Hong Kong interbank offered rates and reduced corporate investment portfolio returns [1] - The outlook for average daily trading volume remains optimistic due to the Federal Reserve's interest rate cut cycle and strong southbound capital inflows [1] - The target price for HKEX has been raised to HKD 548, maintaining a "buy" rating [1]

Core Viewpoint - UBS forecasts that Hong Kong Exchanges and Clearing Limited (HKEX) will report a year-on-year increase in quarterly revenue and net profit of 43% and 53%, reaching HKD 7.7 billion and HKD 4.8 billion respectively, setting new records [1] Financial Performance - The forecasted quarterly revenue and net profit are 8% and 11% higher than market expectations [1] - Estimated net investment income for Q3 is projected at HKD 933 million, reflecting a year-on-year and quarter-on-quarter decline of 23% and 40% respectively, primarily due to weaker HKD interbank rates and potential foreign exchange losses from USD depreciation [1] Trading Activity - Q3 average daily turnover is expected to reach a new high of HKD 286 billion, with southbound capital contribution increasing to approximately 27%, compared to 23% and 24% in Q1 and Q2 respectively [1] - The turnover rate of southbound capital is estimated to be more than twice that of local and foreign investors since 2020, indicating a structural improvement in overall turnover rates [1] Future Projections - UBS has raised its average daily turnover forecast for 2025 to 2027 by 9% to 16% and adjusted its earnings per share forecast for HKEX upward by 7% to 12% [1] - The target price for HKEX has been increased from HKD 464 to HKD 485, maintaining a "Neutral" rating [1]

Core Viewpoint - UBS forecasts that Hong Kong Exchanges and Clearing Limited (HKEX) will report record high revenues and net profits for Q3 this year, with year-on-year growth of 43% and 53% respectively, reaching HKD 77 billion and HKD 48 billion, exceeding market expectations by 8% and 11% [1] Revenue and Profit Forecast - The estimated net investment income is projected to be HKD 933 million, reflecting a year-on-year and quarter-on-quarter decline of 23% and 40% respectively, primarily due to weaker Hong Kong interbank offered rates and potential foreign exchange losses from a depreciating US dollar [1] Trading Volume and Market Participation - Daily average trading volume has reached a new high of HKD 286 billion, with southbound capital contribution increasing to approximately 27%, compared to 23% and 24% in Q1 and Q2 respectively [1] Adjustments to Future Projections - In response to market sentiment and increased participation from southbound capital, HKEX's daily average trading volume forecasts for 2025 to 2027 have been raised by 9% to 16%, and earnings per share forecasts have been adjusted upward by 7% to 12% [1] Target Price and Rating - The target price for HKEX has been revised from HKD 464 to HKD 485, maintaining a "Neutral" rating [1]