We came across a bullish thesis on Marex Group plc on Latticework’s Substack by MOI Global Equity Research. In this article, we will summarize the bulls’ thesis on MRX. Marex Group plc's share was trading at $38.99 as of January 13th. MRX’s trailing and forward P/E were 11.24 and 9.23 respectively according to Yahoo Finance. Samsara (IOT) Climbs 16.5% as Earnings Skyrocket A stock market data. Photo by AlphaTradeZone on Pexels Marex is a UK based global financial services platform that provides critical ...

Core Insights - Marex Group plc reported strong financial results for Q3 2025, with revenue reaching $485 million and Adjusted Profit Before Tax increasing by 25% year-on-year to $101 million, reflecting successful business diversification and growth in Prime services [2][6][20]. Financial Performance - Year-to-date revenue for Q3 2025 was $1,452 million, a 23% increase from $1,179 million in Q3 2024 [3][22]. - Q3 2025 revenue was $485 million, up 24% from $391 million in Q3 2024 [4][14]. - Adjusted Profit Before Tax for Q3 2025 was $101 million, a 25% increase from $80.5 million in Q3 2024 [6][21]. - Reported Profit Before Tax increased by 25% to $98.8 million in Q3 2025, with a margin of 20.4% [20][25]. Revenue Breakdown - Clearing revenue increased by 14% to $133.5 million, driven by a 4% growth in average client balances to $13.3 billion [6][30]. - Agency and Execution revenue surged by 52% to $258.5 million, primarily due to strong growth in Securities revenues [6][41]. - Hedging and Investment Solutions revenue rose by 36% to $48.4 million, marking the strongest quarter on record for this segment [6][59]. Cost and Efficiency - Total reported costs for Q3 2025 increased by 24% to $380.3 million, reflecting higher Front Office and Control and Support costs [18][24]. - Front Office costs rose by 23% to $264 million, driven by increased compensation linked to revenue performance and higher headcount [18][24]. - Control and Support costs increased by 26% to $116.3 million, reflecting investments in finance, risk, technology, and compliance [19][24]. Strategic Developments - The company continued its disciplined M&A growth strategy, announcing acquisitions such as Winterflood Securities and Valcourt, enhancing its market presence and capabilities [10]. - Marex maintained a strong balance sheet with significant levels of surplus liquidity, reaffirming its Investment Grade credit rating [10]. Segment Performance - Market Making revenue decreased by 16% to $43.8 million due to challenging market conditions in Metals and Agriculture, despite growth in Securities and Energy [49][50]. - Adjusted Profit Before Tax for Market Making fell by 59% to $7 million, reflecting lower overall revenue [51][54]. - The Agency and Execution segment saw a 51% increase in revenue year-to-date, driven by strong growth across all asset classes [45].

Core Insights - LPL Financial reported stronger-than-expected profitability for Q2 2025, with non-GAAP EPS of $4.51 and revenue of $3.84 billion, both exceeding analyst estimates [1][5] - The company experienced robust asset growth, although organic net new assets and advisor recruitment slowed compared to the previous period [1][7] Financial Performance - Non-GAAP EPS increased by 16% year-over-year from $3.88 to $4.51, while GAAP EPS rose by 5% from $3.23 to $3.40 [2] - Revenue grew by 31% year-over-year from $2.93 billion to $3.84 billion, driven by higher advisory and commission income [2][5] - Gross profit (non-GAAP) increased by 21% year-over-year, reflecting operational leverage and expansion [2][5] Business Overview and Strategy - LPL Financial is the largest independent broker-dealer in the U.S., providing financial advisors with investment solutions, custody, clearing services, compliance support, and technology tools [3] - The company's strategy focuses on scale and market leadership, a comprehensive suite of services, and flexibility in its advisor business model [4] Asset Growth and Client Metrics - Total advisory and brokerage assets reached $1.92 trillion, a 28% increase from the prior year, supported by equity market gains and onboarding of newly acquired platforms [6] - Advisory assets rose by 28% year-over-year to $1.06 trillion, while client cash balances increased by $7 billion year-over-year to $51 billion [6] Organic Growth and Advisor Recruitment - Organic net new assets were $21 billion, reflecting a 5% annualized growth rate, with a $4 billion outflow related to planned separation from large advisor organizations [7] - The previous quarter's organic net new assets were significantly higher at $71 billion, indicating a slowdown in advisor recruiting activity [7] Capital Allocation and Financial Health - The company allocated $105 million across nine merger and acquisition deals during the quarter, maintaining a debt-to-earnings ratio of 1.23x [9] - Fitch Ratings assigned a BBB credit rating to the company, which may improve future borrowing costs [9] Dividend and Future Guidance - A quarterly dividend of $0.30 per share was declared, payable on August 29, 2025 [10] - The company updated its full-year Core G&A expense outlook to a range of $1,730 million to $1,765 million for fiscal 2025, with a focus on operational efficiencies and integration of acquired businesses [11]

Summary of HK Exchanges & Clearing Conference Call Company Overview - **Company**: HK Exchanges & Clearing (0388.HK) - **Industry**: Financial Services, specifically focused on stock exchange operations in Hong Kong Key Financial Highlights - **2Q25 Revenue Growth**: Expected to increase by 28% year-over-year (YoY) to HK$6,933 million, driven by strong trading activity and higher fees [1][12] - **Profit Growth**: Anticipated profit growth of 32% YoY, with earnings per share (EPS) projected at HK$3.28, up from HK$2.49 in 2Q24 [1][12] - **Average Daily Volume (ADV)**: Recorded at HK$238 billion in 2Q25, representing a 95% increase YoY but a slight decline of 2% quarter-over-quarter (QoQ) [3][9] - **Net Investment Income**: Expected to rise by 8% QoQ, attributed to a larger margin fund size despite lower interest rates [4][9] Trading Activity Insights - **Southbound Trading**: Southbound ADV surged by 154% YoY, contributing significantly to overall trading volume, with its share of total HK turnover exceeding 50% in 2Q25 [3][20] - **Northbound Trading**: Northbound ADV increased by 17% YoY but fell by 20% QoQ, indicating a mixed performance [3] - **Derivatives Trading**: ADV for derivatives decreased by 17% QoQ, reflecting a more muted trading environment [3] Market Conditions and Outlook - **Interest Rates**: The average six-month HIBOR dropped to 3.89% in 2Q25 from 4.16% in 1Q25, impacting net investment income but offset by higher margin requirements [4] - **Future Projections**: The company raised its ADV assumption for 2025 to HK$225 billion, reflecting confidence in resilient trading activities and a favorable low-rate environment [5][28] - **Earnings Estimates**: EPS estimates have been adjusted slightly upward, with expected growth of 20% YoY for 2025 and 8% for 2026 [29] Valuation and Investment Thesis - **Price Target**: Maintained at HK$500, indicating a potential upside of 16% from the current price of HK$432.60 [7][32] - **Market Sentiment**: The company is viewed as an attractive investment due to reduced financial risks, a transition towards innovation-driven growth in China, and rising IPO volumes [38][39] - **Consensus Rating**: 89% of analysts rate the stock as Overweight, reflecting strong market confidence [40] Risks and Considerations - **Geopolitical Uncertainties**: Ongoing geopolitical tensions and trade tariff concerns could impact trading volumes and market sentiment [48] - **Interest Rate Fluctuations**: Potential further declines in interest rates may negatively affect net investment income in the latter half of 2025 [29] Additional Insights - **Cost-Income Ratio**: Improved to 23% in 2Q25, down from 27% YoY, indicating better operational efficiency [12] - **Future ADV Projections**: Expected to reach HK$240 billion in 2026 and HK$265 billion in 2027, reflecting continued growth in trading activity [30][43] This summary encapsulates the key points from the conference call, highlighting the financial performance, market conditions, and future outlook for HK Exchanges & Clearing.

Investment Rating - The report assigns an "Overweight" (OW) rating to HK Exchanges & Clearing (0388.HK) with a new price target of HK$500, reflecting a 24% upside potential from the current price of HK$402.40 [6][31]. Core Insights - The report highlights increased confidence in the financial system cycle bottom, which is expected to support trading volume and market sentiment in Hong Kong [9][44]. - Strong year-to-date (YTD) performance is noted, with average daily trading value (ADV) reaching HK$240 billion as of June 6, 2025, an 82% increase from HK$132 billion in 2024 [2][9]. - The report anticipates a robust IPO recovery, with funds raised reaching HK$78 billion in the first five months of 2025, up over 700% year-on-year [15][17]. Summary by Sections Financial Performance - The report raises ADV assumptions to HK$220 billion for 2025 and HK$240 billion for 2026, reflecting a more favorable market environment and increased IPO activity [4][26]. - Earnings forecasts have been adjusted upward, with EPS estimates increasing by 9.4% for 2025 and 10.6% for 2026 [27][30]. Market Dynamics - The financial system is believed to be in a properly regulated development mode, reducing market volatility and supporting capital market activity [3][10]. - The report identifies key drivers for trading volume, including a shift to an innovation-driven development model in China and easing trade tensions, which are expected to enhance market sentiment [11][14]. IPO Activity - A solid IPO pipeline is anticipated, with 138 deals in process as of May 30, 2025, and expectations for IPO volume to rise to HK$180 billion in 2025 and HK$310 billion in 2026 [15][19]. - The loosening of IPO criteria by the China Securities Regulatory Commission (CSRC) is expected to further stimulate market activity [15][44]. Valuation and Price Target - The new price target of HK$500 is derived from applying a P/E multiple of 37.4x to the 2026 EPS estimate of HK$13.38, reflecting a bullish outlook on market conditions [31][38]. - The report outlines different valuation scenarios, with the base case target increasing to HK$468 and the bull case target rising to HK$630 [32][33].