HSBC research raises HKEX target price to 411 Hong Kong dollars, adjusts earnings forecast

FX168 News on February 28th, HSBC Research published a report stating that the performance of Hong Kong Exchanges and Clearing Limited (00388.HK) last year met expectations, and the management is confident about the outlook for new listings. It is also expected to launch RMB counter trading for southbound transactions this year. The bank maintains its buy rating and raises the target price from HK$375 to HK$411. The bank has raised its average daily volume forecast for HKEX this year to HK$186 billion to reflect the participation rise of international investors. However, the bank's forecast is lower than the HK$212 billion from the beginning of the year, as the bank expects the Turnover Rate to return to normal levels, around 110%. Therefore, the bank has raised its profit forecast for HKEX in the next two years by 6.4% and 5.6% respectively, and expects earnings per share to reach HK$12.21 in 2027. The bank believes that the Favorable Information factor from new listings and the expansion of the mutual market access scheme will help maintain HKEX's Turnover Rate above the long-term average level.