Bank of America Securities released a research report, rating Hong Kong Exchanges and Clearing Limited (00388) as "buy", and the current price is equivalent to a price-earnings ratio of 24 times in 2024, with an attractive valuation. Further policy-driven factors in the second half of the year may push up the price. Pay attention to news about Alibaba, inclusion in the Stock Connect, IPO in the second half of the year, ETF expansion, and news of lower dividend tax policies.
Hong Kong Exchanges and Clearing will announce its first-half performance on August 21, with expected net income of 6.3 billion yuan, a decrease of 1% from the same period last year. In comparison, it fell by 13% year-on-year in the first quarter of this year. The strong performance in the second quarter was mainly due to the recovery of trading volume and the growth of LME trading volume. The increase in interest-earning assets and market improvement also drove the quarterly rebound in interest income/investment income.
The bank pointed out that the average daily turnover of the Hong Kong market in the first half of the year was 110 billion yuan, a year-on-year decrease of 4%. The total trading volume and average daily turnover in the second quarter showed strong performance, rising by 20% and 18% respectively compared to the same period last year, but the momentum weakened in July. The income contribution from LME was a surprise in the first quarter, and it is expected to maintain momentum in the second quarter due to strong trading volume in April and May.