Investment Rating - The report maintains an "Accumulate" rating for the company, with a current price of 419.00 HKD and a fair value of 540.45 HKD [6]. Core Insights - The company achieved record high performance in 2025, with total revenue reaching 29.161 billion HKD, a 30% increase from 2024. This growth was driven by a 32% rise in core business revenue due to increased spot trading volume and stock options trading volume, leading to higher trading and settlement fees [11][36]. - The EBITDA for 2025 was 22.796 billion HKD, up 40% from 2024, with an EBITDA margin of 79%, reflecting a 5 percentage point increase [11]. - The net profit attributable to shareholders for 2025 was 17.754 billion HKD, a 36% increase compared to 2024 [11]. Financial Performance Summary - Revenue Forecast: - 2024: 22.374 billion HKD - 2025: 29.161 billion HKD (30.3% growth) - 2026E: 31.336 billion HKD (7.5% growth) - 2027E: 34.438 billion HKD (9.9% growth) - 2028E: 37.759 billion HKD (9.6% growth) [5] - Net Profit Forecast: - 2024: 13.050 billion HKD - 2025: 17.754 billion HKD (36.05% growth) - 2026E: 19.577 billion HKD (10.27% growth) - 2027E: 21.521 billion HKD (9.93% growth) - 2028E: 23.602 billion HKD (9.67% growth) [5] - Earnings Per Share (EPS): - 2024: 10.29 HKD - 2025: 14.00 HKD - 2026E: 15.44 HKD - 2027E: 16.97 HKD - 2028E: 18.62 HKD [5] - Price-to-Earnings Ratio (P/E): - 2024: 40.7x - 2025: 29.9x - 2026E: 27.1x - 2027E: 24.7x - 2028E: 22.5x [5] - Return on Equity (ROE): - 2024: 25.0% - 2025: 31.7% - 2026E: 34.3% - 2027E: 35.0% - 2028E: 37.0% [5] Business Segment Performance - Trading and Settlement Fees: - 2025 saw a significant increase in trading fees and settlement fees, with core trading volume reaching 249.8 billion HKD, a 90% increase from 2024. Trading fees grew by 44% and settlement fees by 49% [11][18]. - IPO Market: - The Hong Kong IPO market maintained its global leadership in 2025, with 119 companies listed and total fundraising of 286.9 billion HKD, more than three times that of 2024 [11][36]. - Margin Investment Income: - The net investment income from margin and settlement funds increased to 3.241 billion HKD in 2025, reflecting a growth in the scale of funds due to increased margin requirements [42].

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 [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]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [5]. Core Insights - The company reported a total revenue of HKD 68.57 billion for Q1 2025, representing a year-over-year increase of 32%. The main revenue reached HKD 63.15 billion, up 36% year-over-year, with a net profit of HKD 40.77 billion, reflecting a 37% increase year-over-year and an 8% increase quarter-over-quarter [1]. - The report highlights a significant increase in trading volume, which has driven record highs in both total revenue and net profit for Q1 2025. The EBITDA profit margin improved to 78%, up 6 percentage points year-over-year [1]. - The report emphasizes the return of Chinese concept stocks and the acceleration of dual listings in Hong Kong, which is expected to sustain IPO growth in the Hong Kong market [5]. Financial Data and Earnings Forecast - The projected revenues for the company are as follows: - 2024: HKD 22,374 million - 2025E: HKD 27,836 million - 2026E: HKD 28,802 million - 2027E: HKD 29,577 million - The expected net profit for the company is projected to be: - 2024: HKD 13,050 million - 2025E: HKD 16,421 million - 2026E: HKD 16,887 million - 2027E: HKD 17,236 million - The earnings per share (EPS) is forecasted to be HKD 12.95 for 2025E, with a net asset return rate of 29.20% [2][6]. Market Activity - The average daily trading (ADT) for Hong Kong stocks in Q4 2024 was HKD 2,427 billion, showing a year-over-year increase of 144%. The southbound trading volume reached HKD 1,099 billion, up 255% year-over-year [5]. - The report notes that the number of IPOs in Q1 2025 was 17, raising HKD 18.7 billion, which is a 290% increase year-over-year [5]. Revenue Breakdown - The revenue contributions for Q1 2025 are as follows: - Spot trading: HKD 33.0 billion (+75% year-over-year) - Equity securities and derivatives: HKD 17.2 billion (+9% year-over-year) - Commodities: HKD 7.5 billion (+11% year-over-year) - Data and connectivity: HKD 5.5 billion (+4% year-over-year) - Company projects: HKD 5.5 billion (+5% year-over-year) [5].