HSBC Research raises Hong Kong Exchanges and Clearing (HKEX) profit forecasts for this year and next, increasing the target price to HKD 520

HSBC Global Research published a research report indicating that Hong Kong Exchanges and Clearing (00388.HK) achieved earnings per share of HKD 3.43 and HKD 14.05 for the fourth quarter and the full year last year, respectively, exceeding expectations. Total revenue in the fourth quarter increased by 14.6% year-on-year, and cost control performance was surprisingly good, with operating expenses growing by only 0.8% compared to the same period last year.

The report stated that Hong Kong Exchanges and Clearing has clarified its strategy for building a comprehensive Fixed Income and Currency (FIC) ecosystem and plans to establish an International Central Securities Depository (ICSD). Although this plan may take time to develop, the growth potential and competitive advantages of Hong Kong Exchanges and Clearing as a regional gateway are evident.

HSBC Global Research has raised its earnings forecasts for this year and next year by 3% and 1.8%, respectively, while lowering its average daily turnover (ADT) forecasts for Hong Kong stocks this year and next year to HKD 252 billion and HKD 265 billion, respectively. The target price has been raised from HKD 510 to HKD 520, maintaining a "Buy" rating