DBS: Cuts Hong Kong Exchanges and Clearing (HKEX) target price to HKD 430, first-quarter net profit exceeds expectations

Zhitong
2025.05.06 09:28
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DBS released a research report stating that the net profit of Hong Kong Exchanges and Clearing (HKEX) in the first quarter increased by 37% year-on-year to HKD 4.1 billion, exceeding market expectations, while the funds from the southbound trading continue to drive liquidity and daily trading volume in the Hong Kong stock market. The bank indicated that due to the increase in southbound trading investors, the revaluation of the technology sector, potential supportive policies from the Chinese government, and expectations of interest rate cuts by the Federal Reserve, trading activity is expected to accelerate in the medium to long term, maintaining a "buy" rating for HKEX. The bank also raised its earnings forecasts for HKEX for the fiscal years 2025 and 2026 by 7% and 3%, respectively, but due to the tense China-U.S. relations which may dampen market sentiment in the short term, it lowered its target price from HKD 440 to HKD 430. The bank pointed out that driven by DeepSeek, the market sentiment in Hong Kong has significantly improved compared to last year, leading to a rise in technology stocks, pushing the average daily trading volume so far this year to HKD 250 billion. The bank expects this strong trading momentum to continue, raising the average daily trading volume forecast for the fiscal year 2025 to HKD 195 billion, reflecting that improved investor sentiment is increasing liquidity; the valuations of technology stocks are attractive compared to global peers; and supportive policies and stimulus measures help maintain investor interest

According to the Zhitong Finance APP, DBS has released a research report stating that the net profit of Hong Kong Exchanges and Clearing (00388) in the first quarter increased by 37% year-on-year to HKD 4.1 billion, exceeding market expectations. The southbound trading has also continued to drive liquidity and average daily trading volume in the Hong Kong stock market. The bank indicated that due to the increase in southbound investors, the revaluation of the technology sector, potential supportive policies from the Chinese government, and expectations of interest rate cuts by the Federal Reserve, trading activity is expected to accelerate in the medium to long term, maintaining a "buy" rating for HKEX. The bank also raised its earnings forecasts for HKEX for the fiscal years 2025 and 2026 by 7% and 3%, respectively, but due to the tense Sino-U.S. relations which may dampen market sentiment in the short term, it lowered its target price from HKD 440 to HKD 430.

The bank pointed out that driven by DeepSeek, the market sentiment in Hong Kong has significantly improved compared to last year, leading to a rise in technology stocks and pushing the average daily trading volume so far this year to HKD 250 billion. The bank expects this strong trading momentum to continue, raising the average daily trading volume forecast for the fiscal year 2025 to HKD 195 billion, reflecting that improved investor sentiment has led to increased liquidity; the valuations of technology stocks are attractive compared to global peers; and supportive policies and stimulus measures help maintain investor interest

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