Core Viewpoint - Hong Kong Exchanges and Clearing Limited (HKEX) is expected to perform well in 2025, with a strategic focus on growth, projecting net profits for 2026-2028 to be HKD 186 billion, HKD 206 billion, and HKD 229 billion, representing year-on-year growth rates of 4.8%, 10.5%, and 11.2% respectively, with current price-to-earnings ratios of 27.5, 24.9, and 22.4 times [1] Group 1: Financial Performance - In 2025, HKEX reported a 30% year-on-year increase in total revenue and other income to HKD 292 billion, and a 36% increase in net profit attributable to shareholders to HKD 178 billion, with Q4 showing a 15% year-on-year growth, slightly down from Q3 [1] - The revenue structure for 2025 showed that cash, derivatives, and commodities accounted for 50%, 24%, and 11% of total revenue respectively [1] - Cash business revenue increased by 56% year-on-year to HKD 147 billion, driven by strong trading volume, with the average daily turnover (ADT) rising by 90% to HKD 2,498 billion [1] - The revenue from the Stock Connect program increased by HKD 15.7 billion year-on-year to HKD 43.2 billion, accounting for 14.8% of HKEX's total revenue [1] Group 2: Derivatives Performance - The trading volume of financial derivatives showed divergence, with total revenue and other income increasing by 11%, but below the overall company growth rate [2] - The average daily trading volume of futures contracts decreased by 6% due to a 16% drop in daily average contracts for the Hang Seng Index and Hang Seng China Enterprises Index, leading to a 7% decline in futures trading revenue [2] - Conversely, the daily trading volume of stock options increased by 22%, with higher fee options trading becoming more active, offsetting the decline in futures trading revenue [2] Group 3: Investment and Strategic Initiatives - In 2025, HKEX's net investment income increased by HKD 1.84 billion to HKD 51.1 billion, with expectations for 2026 influenced by various factors including collateral arrangements and fluctuations in HIBOR [3] - Operating expenses for 2025 increased by only 2% year-on-year, with EBITDA growth outpacing revenue growth by 10 percentage points, reflecting the company's scale effects and cost control capabilities [3] - HKEX is actively pursuing strategic measures to enhance its multi-asset ecosystem, including acquiring a 20% stake in a clearing company for HKD 4.55 billion, which will strengthen its fixed income and currency product offerings [4] - The exchange is also expanding its international influence, with seven international issuers from countries like Kazakhstan, Singapore, Thailand, and the UAE listing in 2025, and over ten international companies currently in the IPO queue [4]

Core Insights - Hong Kong Stock Exchange (HKEX) reported a strong financial performance for 2025, with revenue and other income reaching HKD 29.161 billion, a year-on-year increase of 30%, and net profit attributable to shareholders at HKD 17.754 billion, up 36% [1] Market Performance - The average daily turnover (ADT) in the Hong Kong stock market hit a record high of HKD 2.498 trillion, a significant increase of 89.5% year-on-year, driven by a surge in trading volume [1] - Southbound capital has become a crucial pillar for liquidity in the Hong Kong stock market, with the ADT for southbound trading increasing by 151% to HKD 1.211 trillion, accounting for 48.5% of the total ADT [1] Derivatives Market - The derivatives market showed continued growth, with an average daily trading volume of 1.66 million contracts, a 7% increase year-on-year [2] - Stock options emerged as one of the most active segments, with an average daily trading volume of 880,000 contracts, reflecting a substantial year-on-year growth of 22% [2] IPO Market - The Hong Kong IPO market experienced a significant turnaround, with 119 new listings in 2025, raising a total of HKD 286.9 billion, a remarkable increase of 226% year-on-year, reclaiming the top position in global IPO financing [2] - New economy companies dominated the IPO landscape, accounting for 66% of the total funds raised, with 21 biotech and specialized technology companies listed under Chapter 18A and 18C [2] Strategic Developments - HKEX made substantial progress in diversifying its asset offerings and enhancing global connectivity, including the establishment of a new subsidiary in Dubai for commodity pricing services [3] - The exchange also introduced a "Tech Company Fast Track" to provide guidance for specialized technology firms and initiated discussions on adjusting the settlement model for the cash market to improve competitiveness and operational efficiency [3] Financial Projections - Revenue projections for HKEX from 2025 to 2027 are estimated at HKD 31.960 billion, HKD 34.331 billion, and HKD 37.597 billion, representing year-on-year growth rates of 9.60%, 7.42%, and 9.51% respectively [3] - Net profit forecasts for the same period are HKD 20.463 billion, HKD 22.043 billion, and HKD 24.357 billion, with growth rates of 15.61%, 7.72%, and 10.50% respectively [3]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [2][7] Core Views - The company achieved record high performance in 2025, with total revenue and other income reaching HKD 29.161 billion, a year-on-year increase of 30% [5] - The net profit attributable to shareholders was HKD 17.700 billion, up 36% year-on-year, driven by a significant increase in trading volume [5] - The average daily trading volume (ADT) in the Hong Kong stock market reached a historical high of HKD 2,498 billion, representing an 89.5% year-on-year increase [5] - The IPO market saw a remarkable turnaround, with 119 new listings and total fundraising of HKD 286.9 billion, a 226% increase year-on-year, reclaiming the top position globally [5] - The company is diversifying its asset strategy and enhancing global connectivity, including establishing a new subsidiary in Dubai [5][6] Financial Summary - Total market capitalization is HKD 519,052.42 million [4] - The stock price has seen a 52-week increase of 37.85% [4] - Revenue projections for 2025-2027 are HKD 31.960 billion, HKD 34.331 billion, and HKD 37.597 billion, respectively, with growth rates of 9.60%, 7.42%, and 9.51% [7][8] - Net profit projections for the same period are HKD 20.463 billion, HKD 22.043 billion, and HKD 24.357 billion, with growth rates of 15.61%, 7.72%, and 10.50% [7][8]

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [2][7] Core Insights - The company achieved record high performance in 2025, with total revenue and other income reaching HKD 29.161 billion, a year-on-year increase of 30% [5] - Shareholder profit attributable to the company was HKD 17.700 billion, up 36% year-on-year, driven by a 32% increase in main business revenue due to a surge in trading volume [5] - The IPO market saw a significant rebound, with 119 new listings raising a total of HKD 286.9 billion, a 226% increase year-on-year, reclaiming the top position globally for IPO fundraising [5] Financial Performance - In 2025, the average daily trading volume (ADT) for Hong Kong stocks reached HKD 2,498 billion, a remarkable 89.5% increase year-on-year, with southbound funds becoming a crucial liquidity source [5][6] - The derivatives market also showed strong performance, with an average daily contract volume of 1.66 million, a 7% increase year-on-year, and stock options being a particularly active segment with a 22% increase [5] - The company’s strategic initiatives included diversifying asset classes and enhancing global connectivity, with significant progress in fixed income and currency businesses [5][6] Earnings Forecast - Projected revenues for 2025, 2026, and 2027 are HKD 31.960 billion, HKD 34.331 billion, and HKD 37.597 billion respectively, with growth rates of 9.60%, 7.42%, and 9.51% [7][8] - Expected net profits for the same years are HKD 20.463 billion, HKD 22.043 billion, and HKD 24.357 billion, reflecting growth rates of 15.61%, 7.72%, and 10.50% [7][8] - The report indicates a price-to-earnings (P/E) ratio of 25.40 for 2026, decreasing to 21.34 by 2028 [7][8]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) reported strong growth in revenue and profit for the year 2025, driven by high market activity and a favorable economic environment [1] Group 1: Financial Performance - HKEX achieved a total revenue of HKD 23.745 billion, representing a year-over-year increase of 37% [1] - The net profit attributable to shareholders reached HKD 17.754 billion, up 36% year-over-year [1] - The return on equity (ROE) for the year was 30.5%, an increase of 6.3 percentage points year-over-year [1] Group 2: Revenue Breakdown - Revenue from trading fees and trading system usage increased by 44%, while clearing and settlement fees rose by 49% [1] - Revenue from various segments showed diverse growth: cash equities up 58%, equity securities and derivatives up 18%, commodities up 13%, and market data fees up 8% [1] - The revenue from the cash equities segment was particularly strong, with daily average trading volume increasing by 93% to HKD 231.5 billion [2] Group 3: IPO Market and Trading Volume - The IPO market in Hong Kong was robust, with 119 IPOs raising HKD 645.9 billion, a 236% increase year-over-year [2] - Daily average trading volume for the Shanghai-Hong Kong Stock Connect was HKD 212.4 billion, up 42% year-over-year, while the Hong Kong Stock Connect averaged HKD 121.1 billion, up 151% [2] Group 4: Derivatives and Investment Income - The derivatives segment saw a daily average trading volume of HKD 18.3 billion, a 55% increase year-over-year, with trading fees rising by 48% [3] - Investment income for HKEX reached HKD 5.111 billion, a 4% increase year-over-year, driven by higher margins and increased fund sizes [4] Group 5: Future Outlook - HKEX is expected to maintain its position as a key player in the primary market, supported by the recovery of IPO activities from mainland companies [5] - Despite short-term fluctuations in the secondary market, the long-term outlook remains positive, with expectations of increased liquidity and market recovery [5] - Profit forecasts for 2026-2028 have been slightly adjusted, with projected net profits of HKD 19.1 billion, HKD 20 billion, and HKD 21 billion respectively, reflecting year-over-year growth [5]

Core Viewpoint - Hong Kong Stock Exchange (HKEX) reported its 2025 financial results, which met expectations, showing significant growth in revenue and net profit compared to the previous year [1] Revenue Breakdown - Total revenue for HKEX in 2025 reached HKD 29.16 billion, a year-on-year increase of 30% - Main revenue was HKD 27.11 billion, up 32% year-on-year, excluding investment income and charitable donations - Net profit for 2025 was HKD 17.75 billion, reflecting a 36% year-on-year increase - In Q4 2025, main revenue was HKD 6.67 billion, up 11% year-on-year but down 11% quarter-on-quarter; net profit was HKD 4.34 billion, up 15% year-on-year but down 12% quarter-on-quarter [1][2] Revenue by Fee Type - Revenue by fee type for 2025 was as follows: - Trading fees: HKD 10.33 billion (38%) - Clearing and settlement fees: HKD 7.04 billion (26%) - Investment income: HKD 5.11 billion (19%) - Listing fees: HKD 1.79 billion (7%) - Custody and agency services fees: HKD 1.50 billion (6%) - Market data fees: HKD 1.17 billion (4%) - Year-on-year growth rates for various fees included: - Trading fees: +44% - Clearing and settlement fees: +49% - Listing fees: +21% - Custody and agency services fees: +31% - Market data fees: +8% - Investment income: +4% [2] Market Activity - Average Daily Turnover (ADT) for Hong Kong stocks in 2025 was HKD 249.8 billion, a 90% year-on-year increase - Q4 2025 ADT was HKD 229.8 billion, up 23% year-on-year but down 20% quarter-on-quarter - Southbound ADT for 2025 was HKD 121.1 billion, up 151% year-on-year, contributing 24.2% to total ADT - Northbound ADT for 2025 was RMB 212.4 billion, up 42% year-on-year [3] IPO Market - HKEX maintained its position as the global leader in IPO fundraising, with 119 new listings in 2025 and total IPO proceeds of HKD 286.9 billion, a 226% year-on-year increase - Over two-thirds of IPO proceeds came from new economy companies - As of January 26, 2026, there were over 400 IPO applications in process, including more than 50 applications under specific listing rules [3] Investment Income - Investment income for HKEX in 2025 was HKD 5.11 billion, a 4% year-on-year increase - Q4 2025 investment income was HKD 1.22 billion, up 2% year-on-year and quarter-on-quarter - The contribution of investment income to net profit was 28% [3] Profit Forecast and Rating - The company has adjusted its profit forecasts downward for 2026 and 2027, while introducing a forecast for 2028 - Expected net profits for 2026, 2027, and 2028 are HKD 17.59 billion, HKD 18.36 billion, and HKD 19.51 billion, respectively - The current PE ratio for 2026 is projected at 29.7x, close to historical lows, indicating potential investment value [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [6][4]. Core Insights - The company reported a total revenue of HKD 29.16 billion for 2025, reflecting a year-on-year growth of 30%. The main revenue component was HKD 27.11 billion, with a net profit of HKD 17.75 billion, marking a 36% increase year-on-year [4][6]. - The report highlights a significant increase in fee-related income, with various fee categories showing double-digit growth. Trading fees grew by 44%, and settlement and clearing fees increased by 49% [6][4]. - The report notes a decline in margin investment yields, with the weighted yield for margin financing at 1.31%, down from 1.51% in 2024 [6][4]. Financial Data and Earnings Forecast - The financial projections for the company are as follows: - Revenue for 2026 is estimated at HKD 28.32 billion, a decrease of 3% from 2025, with a net profit forecast of HKD 17.59 billion, a slight decline of 1% [5][7]. - The earnings per share (EPS) for 2026 is projected to be HKD 13.9, with a return on equity (ROE) of 29.8% [5][7]. - The report provides a detailed breakdown of revenue sources, with trading fees contributing 38%, settlement and clearing fees 26%, and investment income 19% [6][7]. Market Position and Trends - The Hong Kong stock market maintained its position as the global leader in IPO fundraising, with 119 new listings in 2025, raising HKD 286.9 billion, a 226% increase year-on-year [6][4]. - The report emphasizes the strong performance of the company's derivatives segment, with an average daily volume (ADV) of 166,000 contracts, a 7% increase year-on-year [6][4]. - The report also notes that the company is well-positioned to benefit from the ongoing deepening of connectivity between Hong Kong and mainland China, which is expected to enhance its market value [6][4].

Investment Rating - The report maintains a "Strong Buy" investment rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [3][9]. Core Views - The company reported a record high total revenue of HKD 29.2 billion for the fiscal year 2025, representing a year-on-year increase of 30%. The net profit attributable to shareholders was HKD 17.8 billion, up 36% year-on-year, and EBITDA reached HKD 22.8 billion, reflecting a 40% increase year-on-year [1][9]. - The primary drivers of revenue growth were increased trading and settlement fees due to higher transaction volumes in the spot, derivatives, and commodities markets [9]. - The report highlights a significant increase in the number of IPOs and fundraising activities in the Hong Kong market, with 119 new listings in 2025 raising HKD 286.9 billion, more than three times the amount raised in 2024 [2][9]. Financial Performance - For the fiscal year 2025, the breakdown of revenue by segment includes: - Spot market: HKD 14.7 billion (+56% YoY) - Equity securities and financial derivatives: HKD 6.9 billion (+11% YoY) - Commodities: HKD 3.2 billion (+14% YoY) - Data and connectivity: HKD 2.2 billion (+7% YoY) - Company projects: HKD 2.2 billion (+17% YoY) [9]. - The EBITDA margin improved to 79%, an increase of 5 percentage points year-on-year, driven by strong performance in the spot and derivatives markets [9]. Market Dynamics - The average daily trading volume in the Hong Kong market increased by 90% year-on-year to HKD 249.8 billion, marking a 50% increase compared to the pre-pandemic high in 2021 [9]. - The report notes that the participation of international capital and increased engagement from southbound investors contributed to this growth [9]. Future Outlook - The report projects net profits for the company to be HKD 16.9 billion, HKD 17.7 billion, and HKD 18.6 billion for the years 2026 to 2028, respectively, with expected growth rates of -5%, +5%, and +5% [9]. - The target price is set based on a 40x PE ratio, indicating a potential upside of 37% from the current stock price of HKD 412.2 [9].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a total revenue of HKD 29.16 billion for 2025, representing a year-on-year increase of 30%. The main revenue reached HKD 27.11 billion, up 32% year-on-year, while net profit was HKD 17.75 billion, reflecting a 36% increase year-on-year [4] - The report highlights significant growth in fee-related income, with various fee categories showing double-digit growth. Trading fees increased by 44%, settlement and clearing fees by 49%, and listing fees by 21% [6] - The Hong Kong stock market maintained its position as the global leader in IPO fundraising, with 119 new listings in 2025 and total IPO proceeds reaching HKD 286.9 billion, a 226% year-on-year increase [6] Financial Data and Earnings Forecast - The company’s projected financials for 2026E show a revenue of HKD 28.32 billion, a slight decrease of 3% year-on-year, with a net profit forecast of HKD 17.59 billion, down 1% year-on-year. The earnings per share (EPS) is expected to be HKD 13.9 [5][7] - The report provides a detailed breakdown of revenue sources for 2025, with trading fees contributing HKD 10.33 billion (38%), settlement and clearing fees HKD 7.04 billion (26%), and investment income HKD 5.11 billion (19%) [6][7] - The report anticipates a return on equity (ROE) of 29.8% for 2026E, with a price-to-earnings (PE) ratio of 29.7x, indicating that the stock is trading near historical lows [5][6]

Core Viewpoint - The Hong Kong Stock Exchange (HKEX) has demonstrated strong performance in enhancing stock market liquidity and new listings over the past two years, achieving record high revenues and profits for the second consecutive year [1] Group 1: Market Performance - HKEX reported a significant increase in average daily trading volume, which rose by 90% year-on-year to nearly HKD 250 billion [1] - The trading volumes in the spot, derivatives, and commodities markets also reached new highs [1] Group 2: Investor Demand and Product Development - There is a growing diversification in global investor demand, with interests not only in equities but also in derivatives, commodities, and fixed income products [1] - The exchange plans to focus on building a multi-asset ecosystem to enhance Hong Kong's market competitiveness and has a positive outlook on daily trading volume trends [1] Group 3: Future Product Offerings - Strong demand from professional retail investors has been noted, particularly for derivatives [1] - HKEX is considering the launch of fixed income ETFs in addition to existing bond ETFs, and anticipates introducing more new products in the futures market, including weekly and monthly stock options [1] - There are ongoing efforts to introduce the "zero-day options" contract for the Hang Seng Index, which would expire on the same trading day [1]