Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The valuation of Hong Kong Exchanges and Clearing Limited (HKEX) has lagged behind trading volume, with a recovery in IPOs positively impacting the long-term Average Daily Turnover (ADT) [4][6] - In 2025, the ADT is projected to reach 2200 billion HKD, with a year-on-year increase of 66.9% [4] - The company's net profit forecast for 2025-2027 has been raised to 168, 169, and 172 billion HKD, respectively, reflecting a year-on-year growth of 29.0%, 0.2%, and 2.2% [4] Summary by Sections Market Activity and Performance - The Hong Kong stock market has seen a continuous improvement in activity, with the ADT reaching a historical peak of 2973 billion HKD in February 2025, representing a year-on-year increase of 230% [13][14] - The trading volume remained active in March, with figures of 3181 and 2863 billion HKD, showing year-on-year increases of 203% and 152% respectively [13] Regulatory Support for IPOs - Regulatory measures have encouraged A-share companies to list in Hong Kong, enhancing market capitalization and activity [6] - As of February 2025, 10 IPOs have occurred, doubling year-on-year, with a financing scale of 7.8 billion HKD, up 258% [32][34] - The approval process for IPOs has been optimized, facilitating the listing of mainland companies in Hong Kong [36] Financial Projections - The company's revenue for 2025 is projected to be 27,785 million HKD, with a year-on-year growth of 24.18% [7] - The net profit for 2025 is estimated at 16,828 million HKD, reflecting a year-on-year increase of 28.95% [7] - The sensitivity analysis indicates that an ADT of 1700, 2200, and 3000 billion HKD corresponds to net profit changes of +8%, +29%, and +62% respectively [27]

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited (00388.HK) is "Buy" (maintained) [1] Core Views - The valuation of Hong Kong Exchanges is lagging behind trading volume, with a recovery in IPOs benefiting the long-term Average Daily Turnover (ADT) [4] - The trading volume in the Hong Kong stock market has been active, with February's ADT reaching a historical peak of HKD 297.3 billion, a year-on-year increase of 230% [13] - The company has adjusted its ADT forecasts for 2025-2027 to HKD 2200 billion, HKD 2000 billion, and HKD 2000 billion respectively, reflecting a year-on-year growth of 66.9%, a decline of 9.1%, and flat growth [4] - The net profit forecasts for 2025-2027 have been raised to HKD 16.8 billion, HKD 16.9 billion, and HKD 17.2 billion respectively, indicating year-on-year growth of 29.0%, 0.2%, and 2.2% [4] Summary by Sections Market Activity and Trading Settlement Business - The Hong Kong stock market's activity has been improving, with February's ADT reaching a historical peak of HKD 297.3 billion, a year-on-year increase of 230% [13] - The trading settlement business, which is highly correlated with ADT, contributed over 53% of the company's revenue in 2024 [5] IPO Recovery and Market Structure - Regulatory support for A-share companies to list in Hong Kong is expected to enhance market capitalization and activity [6] - In the first two months of 2025, there were 10 IPOs in Hong Kong, doubling year-on-year, with a financing scale of HKD 7.8 billion, an increase of 258% [6][32] Financial Performance and Valuation - The company's revenue for 2025 is projected to be HKD 27.785 billion, reflecting a year-on-year growth of 24.18% [7] - The net profit for 2025 is estimated at HKD 16.828 billion, indicating a year-on-year increase of 28.95% [7] - The current price-to-earnings (P/E) ratio is projected to be 27.8 times for 2025, compared to a historical average of approximately 37 times over the past decade [4][7]

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]