In "Major Banks," CITIC Securities predicts that Hong Kong Exchanges and Clearing's (HKEX) third-quarter profit will increase by 49% year-on-year and has raised its earnings forecast

AASTOCKS
2025.10.22 01:45

CICC published a report stating that Hong Kong Exchanges and Clearing (00388.HK) plans to disclose its third-quarter results on November 5, expecting a year-on-year profit growth of 49% and a quarter-on-quarter growth of 5% to HKD 4.68 billion. Revenue is expected to grow by 40% year-on-year and 4% quarter-on-quarter to HKD 7.53 billion. Excluding investment income, the main fee income is expected to grow by 57% year-on-year and 18% quarter-on-quarter to HKD 6.51 billion. The bank expects that the total revenue and profit of Hong Kong Exchanges and Clearing for the first three quarters will grow by 35% and 42% year-on-year to HKD 21.61 billion and HKD 13.2 billion, respectively.

The report indicates that since October, the average daily trading volume of Hong Kong stocks has reached HKD 288 billion, with intensified market speculation driving trading activity to remain high; at the same time, the high volatility environment is expected to support the heat of derivatives trading, and the fundamental profitability of Hong Kong Exchanges and Clearing continues to solidify. According to CICC's strategy team, the Federal Reserve may lower interest rates at a faster pace in the fourth quarter. The bank believes that under marginal easing, the liquidity of Hong Kong stocks is expected to be supported. It suggests paying attention to the recent impact of funding risk appetite decline on Hong Kong Exchanges and Clearing and the value of allocation after valuation adjustment.

Considering the boost in market trading activity, the bank has raised its profit forecast for Hong Kong Exchanges and Clearing in 2025 by 3% to HKD 17.1 billion, while maintaining its 2026 forecast largely unchanged. The company is currently trading at a price-to-earnings ratio of 31 times for 2025 and 2026, maintaining an "outperform industry" rating and a target price of HKD 500

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