Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) with a target price of HKD 516.9 [2][9]. Core Insights - The company reported a significant increase in revenue and net profit for 2025, with total revenue reaching HKD 29.161 billion (up 30.3% year-on-year) and net profit attributable to shareholders at HKD 17.754 billion (up 36.0% year-on-year) [2][10]. - The report highlights a strong performance in the cash market, driven by increased investor interest in Chinese assets and international capital inflow, resulting in a 90% year-on-year increase in average daily trading volume [3][4]. - The number of new listings in Hong Kong reached 119 in 2025, a 48-company increase year-on-year, with total fundraising amounting to HKD 286.9 billion (up 227% year-on-year), positioning Hong Kong as a leading market for IPOs globally [4][9]. Summary by Relevant Sections Financial Performance - In Q4 2025, the company achieved revenue of HKD 7.310 billion (up 14.6% year-on-year) and net profit of HKD 4.335 billion (up 14.7% year-on-year) [2]. - The cash segment generated revenue of HKD 14.704 billion (up 56.1% year-on-year), with trading fees and related services contributing HKD 13.291 billion (up 64.1% year-on-year) [3]. Market Activity - The average daily trading amount in the cash market reached HKD 249.8 billion (up 90% year-on-year), with northbound and southbound trading through the Stock Connect increasing by 42% and 151% respectively [3]. - The report notes that the overall market activity has significantly improved, with the number of IPO applications rising to 345 (up 311% year-on-year) [4]. Revenue Structure - The revenue composition indicates that trading and related fees accounted for 64.7% of total revenue (up 6.4 percentage points year-on-year), while listing fees contributed 6.1% (down 0.5 percentage points year-on-year) [9]. - Investment income netted HKD 5.111 billion (up 3.7% year-on-year), with a total investment return rate of 1.32% [9]. Future Outlook - The report anticipates continued growth in the company's earnings per share (EPS), projecting HKD 14.77 for 2026, HKD 16.34 for 2027, and HKD 17.87 for 2028, with corresponding price-to-earnings (PE) ratios of 28, 25, and 23 times [9][10]. - The company is expected to enhance its liquidity pool and market efficiency while developing a diversified asset ecosystem, indicating strong growth potential [9].

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (0388.HK) [2] Core Insights - The company achieved record high performance in 2025, with total revenue and other income reaching HKD 29.16 billion, a year-on-year increase of 30%, and net profit attributable to shareholders amounting to HKD 17.75 billion, up 36% year-on-year [7] - The strong performance is attributed to increased trading and settlement fees due to record high average daily trading (ADT) in the cash and derivatives markets, as well as robust growth in the Hong Kong IPO market, which led to a significant increase in listing fees [7] - The report forecasts continued revenue growth, with projected total revenues of HKD 29.63 billion in 2026, HKD 30.34 billion in 2027, and HKD 31.15 billion in 2028, reflecting growth rates of 1.6%, 2.4%, and 2.7% respectively [2][8] Financial Performance Summary - In 2025, the company reported: - Trading and transaction system fees of HKD 10.33 billion, up 44% year-on-year - Settlement and clearing fees of HKD 7.04 billion, up 49% year-on-year - Listing fees of HKD 1.79 billion, up 21% year-on-year - Net investment income of HKD 5.11 billion, up 4% year-on-year [8] - The average daily trading in the cash market reached HKD 249.8 billion, a 90% increase year-on-year, with northbound ADT at HKD 212.4 billion, up 42%, and southbound ADT at HKD 121.1 billion, up 151% [7] Market Outlook - The report indicates that the active trading environment in the Hong Kong stock market is expected to continue benefiting the company's performance, with a strong pipeline of IPO applications and ongoing interest from global investors in Chinese assets [7]