Core Viewpoint - Hong Kong Stock Exchange reported strong financial performance for 2025, with revenue and net profit showing significant year-on-year growth, driven by increased trading activity and listing fees. Financial Performance - In 2025, the company achieved revenue and other income of HKD 29.161 billion, a year-on-year increase of 30.3% [1] - The net profit attributable to shareholders reached HKD 17.754 billion, reflecting a year-on-year growth of 36.0% [1] Revenue Breakdown - Revenue from trading and trading system usage fees increased by 43.73%, while listing fees rose by 20.55% [1] - Settlement and clearing fees grew by 49.29%, and custody and agency service fees increased by 31.15% [1] - Market data fees and investment income saw smaller increases of 7.83% and 3.73%, respectively [1] - The growth in trading and settlement fees was attributed to heightened trading activity in the cash, derivatives, and commodities segments [1] Trading Activity - The average daily turnover of stock securities on the exchange increased by 92.9% year-on-year [2] - The average daily turnover for Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect rose by 41.5% and 151.2%, respectively [1] - Derivatives trading fees grew by 10.3%, driven by increased activity in stock options and warrants [1] - The average daily trading volume of LME metal contracts increased by 7.7%, contributing to a 10.6% rise in commodity trading fees [1] Listing Fees - Listing fees from the cash market increased by 8.6%, with 119 new companies listed, raising funds that grew by 236.1% year-on-year [2] - Derivatives market listing fees rose by 38.4% to HKD 825 million, primarily due to a significant increase in new derivative warrants and structured products [2] Investment Income - In Q4 2025, the company reported net investment income of HKD 1.218 billion, reflecting a quarter-on-quarter increase of 2% and a year-on-year increase of 20% [2] - The average investment amount increased by 20.08% year-on-year, while the annualized investment return rate decreased slightly to 1.32% [2] - The company's total investment income reached HKD 1.870 billion, a year-on-year increase of 6.98% [2] Future Outlook - The liquidity in the Hong Kong stock market is expected to continue rising due to a series of connectivity policies, which may enhance overall market activity and valuations [3] - Projections for 2026-2028 indicate revenues of HKD 32.614 billion, HKD 34.403 billion, and HKD 36.326 billion, with net profits of HKD 20.353 billion, HKD 21.424 billion, and HKD 22.593 billion, respectively [3] - Corresponding PE valuations are expected to be 25.88, 24.58, and 23.31 times [3]

Core Insights - The Hong Kong Stock Exchange (HKEX) has experienced significant growth in revenue and net profit, achieving record highs for both metrics in the third quarter and the first three quarters of 2025 [1][2][3] Financial Performance - Total revenue for HKEX in the first three quarters reached HKD 21.9 billion, a year-on-year increase of 37%, while net profit was HKD 13.4 billion, up 45% [2] - In the third quarter alone, revenue was HKD 7.775 billion, reflecting a 45% year-on-year growth, and net profit was HKD 4.9 billion, a 56% increase [2] Market Activity - The growth in HKEX's performance is attributed to heightened market trading activity and a surge in new listings [3] - Average daily trading volume for the first three quarters was HKD 256.4 billion, a 126% increase year-on-year, driving significant growth in trading and settlement fees [3] - The Stock Connect program saw record average daily trading amounts, with northbound and southbound trading reaching RMB 206.4 billion and HKD 125.9 billion respectively, marking increases of 67% and 229% [3] IPO Performance - HKEX led the global IPO market in the first three quarters of 2025, with 69 new listings raising a total of HKD 188.3 billion, more than three times the amount from the same period last year [5] - In the third quarter, 25 new companies were listed, raising a total of HKD 78.9 billion, with increases of 67% and 87% in the number of new listings and capital raised compared to the same quarter in 2024 [5][6] - The number of IPO applications in process reached 297 by September 30, 2025, significantly up from 84 at the end of 2024 [5] Strategic Initiatives - HKEX has introduced new pricing regulations for IPOs to enhance the pricing mechanism, aiming to attract more institutional investors and companies to participate [6]

Core Viewpoint - The Hong Kong stock market showed strong performance in May, with active trading and positive growth expectations for the Hong Kong Stock Exchange's (HKEX) earnings [1][2] Market Performance - The Hang Seng Index and Hang Seng Tech Index increased by 16.1% and 15.7% respectively compared to the end of 2024 [1] - The monthly average daily turnover (ADT) for HKEX was HKD 210.3 billion, down 23.4% month-on-month but up 50.4% year-on-year [1] - The monthly ADT for the Shanghai-Shenzhen Stock Connect was HKD 906.13 billion, down 6.9% month-on-month but up 22.4% year-on-year [1] - The monthly ADT for the Hong Kong Stock Connect was HKD 147.42 billion, down 22.9% month-on-month but up 50.1% year-on-year [1] Derivatives and Commodity Markets - In the derivatives market, both futures and options trading volumes decreased month-on-month and year-on-year [1] - The average daily volume (ADV) for futures was 586,000 contracts, down 30.3% month-on-month and 14.6% year-on-year [1] - The ADV for options was 805,000 contracts, down 19.8% month-on-month and 23.7% year-on-year [1] - The London Metal Exchange (LME) saw a decrease in trading volume, with a daily average of 707,000 contracts, down 19.7% month-on-month and 8.5% year-on-year [1] IPO Market - The Hong Kong IPO market experienced significant growth, with 10 new listings in May totaling HKD 55.8 billion, representing increases of 1830.4% month-on-month and 3150.6% year-on-year [1] Investment Income - Investment income rates for HKEX showed a decline month-on-month and year-on-year as of the end of May [1] - The 6-month HIBOR was 2.16%, down 1.86 percentage points month-on-month and down 2.66 percentage points year-on-year [1] - The 1-month HIBOR was 0.59%, down 3.37 percentage points month-on-month and down 3.89 percentage points year-on-year [1] - The overnight HIBOR was 0.03%, down 4.47 percentage points month-on-month and down 4.44 percentage points year-on-year [1] - The US overnight bank funding rate was 4.33%, unchanged month-on-month [1] Macroeconomic Environment - Domestic economic conditions showed signs of recovery, with the manufacturing PMI at 49.50%, up 0.50 percentage points month-on-month [1] - New orders and new export orders indices were at 49.8% and 47.5%, respectively, with increases of 0.60 percentage points and 2.80 percentage points month-on-month [1] - The manufacturing production index was at 50.7%, up 0.90 percentage points month-on-month [1] - Internationally, the Federal Reserve maintained its interest rate at 4.25%-4.50%, with expectations for rate cuts being postponed [1][2] Investment Outlook - As of the end of May, the company's PE ratio was 35.45x, positioned at the 44th percentile historically since 2016, indicating potential value for investment [2] - The company is expected to achieve revenues of HKD 29.8 billion, HKD 31.0 billion, and HKD 32.5 billion for 2025-2027, with net profits of HKD 17.9 billion, HKD 18.6 billion, and HKD 19.6 billion respectively [2] - Corresponding PE valuations are projected to be 29.2x, 28.0x, and 26.6x for the same period, suggesting a "buy" rating [2]