港交所-2025 年第二季度收入和利润可能仍将强劲增长-HK Exchanges & Clearing-Likely still strong revenue and profit growth in 2Q25

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.