Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][12] Core Views - The company's revenue for 2024 was HKD 22.374 billion, a year-on-year increase of 9.1%, and the net profit attributable to shareholders was HKD 13.050 billion, up 10.0% year-on-year. The EBITDA margin improved to 74%, an increase of 1 percentage point from 2023 [7][3] - The fourth quarter saw significant growth, with revenue reaching HKD 6.017 billion, a year-on-year increase of 33.2%, and a quarter-on-quarter increase of 24.0%. The net profit attributable to shareholders for Q4 was HKD 3.780 billion, up 45.6% year-on-year and 20.2% quarter-on-quarter [7][3] - The report attributes the performance improvement to heightened activity in the spot and derivatives markets, with the average daily trading volume (ADT) for the exchange's spot market reaching HKD 171.5 billion, a year-on-year increase of 113.3% [8][11] Summary by Sections Financial Performance - The company reported a total revenue of HKD 22.374 billion for 2024, with a net profit of HKD 13.050 billion. The EBITDA margin was 74%, and the dividend payout ratio remained at 90% [7][3] - For Q4, revenue was HKD 6.017 billion, with a net profit of HKD 3.780 billion, indicating strong performance driven by trading activity [7][3] Market Activity - The average daily trading volume in the Hong Kong stock market increased significantly, with the Hang Seng Index averaging HKD 226.6 billion from January to February 27, 2025, up 79.9% from the full year of 2024 [11][2] - The company's revenue structure is closely tied to market activity, with trading fees and system usage fees accounting for nearly 60% of total revenue [11][2] Earnings Forecast - The earnings forecast for 2025 and 2026 has been adjusted upwards by 6.0% and 7.4%, respectively, with projected net profits of HKD 16.335 billion and HKD 18.152 billion for those years [3][12] - The estimated price-to-earnings (PE) ratio for 2025 is 28.0x, reflecting the company's strong earnings growth potential [3][12]

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited is "Buy" (maintained) [1] Core Views - The report highlights a significant improvement in ADT-linked business year-on-year, with a recovery in IPOs supporting growth [1] - The expected total revenue and net profit for 2024 are HKD 22.374 billion and HKD 13.050 billion, respectively, representing year-on-year growth of 9% and 10% [1] - The report anticipates a strong performance driven by the recovery of the IPO market and increased activity in the technology sector, suggesting a potential "double boost" in performance and valuation for the exchange [1][3] Summary by Sections Financial Performance - In 2024, the company achieved total revenue of HKD 22.374 billion and net profit of HKD 13.050 billion, with Q4 net profit reaching HKD 3.78 billion, up 46% year-on-year and 20% quarter-on-quarter [1] - Revenue from trading, settlement, and other income showed year-on-year increases of 18%, 21%, and slight declines in other categories [1] - The forecast for net profit for 2025-2027 is HKD 15.775 billion, HKD 15.571 billion, and HKD 16.141 billion, respectively, with corresponding EPS of HKD 12.44, HKD 12.28, and HKD 12.73 [1][4] Market Activity - The report notes a year-on-year increase in ADT for Hong Kong stocks, reaching HKD 1.32 trillion in 2024, up 26%, with northbound and southbound ADT increasing by 39% and 55%, respectively [2] - The IPO market showed signs of recovery, with 71 companies listed in 2024, raising HKD 88 billion, a 90% increase year-on-year [2] - The report emphasizes the role of new economy companies in driving market activity, with significant listings expected in the coming years [3] Valuation Metrics - The current P/E ratios for 2025-2027 are projected at 29.0, 29.4, and 28.4 times, respectively, indicating a favorable valuation outlook [1][4] - The report provides a financial summary indicating a steady growth trajectory in revenue and net profit, with a projected revenue increase of 22.56% in 2025 [4][9]