Core Viewpoint - Morgan Stanley anticipates that Hong Kong Exchanges and Clearing Limited (HKEX) will see a decline in revenue and profit in Q4 2025 from the historical high in Q3 2025, despite a relatively active market in January providing support for this year's performance [1] Revenue and Profit Forecast - The firm estimates that HKEX's profit in Q4 2025 will decrease by 2% year-on-year, influenced by cost stickiness (up 7% year-on-year) and an increase in tax rate due to minimum tax requirements [1] - Q4 2025 average daily turnover is projected to be HKD 230 billion, representing a 23% year-on-year increase but a 20% quarter-on-quarter decline [1] Trading Volume Insights - Daily trading volume for futures is expected to decline by 16% year-on-year, while daily trading volume for options is anticipated to increase by 8% year-on-year [1] Revenue Growth Drivers - Q4 revenue is expected to grow by 4% year-on-year, driven by approximately 12% growth in core business, although this will be partially offset by weak net investment income [1] Net Investment Income Outlook - Morgan Stanley predicts that HKEX's net investment income will decline year-on-year and quarter-on-quarter, primarily due to a reduction in the scale of margin funds [1] Rating and Target Price - The rating for HKEX is set at "Overweight" with a target price of HKD 508 [1]