Jinwu Financial News | FIRST SHANGHAI Research indicates that in the first three quarters of 2024, the Hong Kong Stock Exchange (00388) achieved revenue and other income of 15.99 billion HKD (YoY +2%), where main Business revenue rose by 1%, mainly due to increased Volume in the spot, derivatives, and commodity markets, which boosted trading and settlement fees, as well as increased LME charges; however, a decrease in net investment income from margin has offset some of the increase.
The bank noted that revenue from the spot market in the first three quarters of 2024 was 6.35 billion HKD, a slight increase compared to 6.34 billion HKD in the first three quarters of 2023. The average daily transaction amount in the spot market for the first three quarters of 2024 was 102.7 billion HKD, a 5% year-on-year increase, mainly due to stimulus measures announced by mainland China and monetary easing adopted by major Global central banks, which boosted market confidence and liquidity, increasing trading activity in the spot market. In the first three quarters of this year, the performance of the HK ->SH and HK ->SZ trading volume was promising, with an average daily transaction amount of 123.3 billion yuan (YoY +14%), generating revenue of 1.78 billion HKD, a 4% year-on-year increase.
The bank stated that Hong Kong Stock Exchange demonstrated strong performance growth this quarter, with average daily trading amounts in both HK ->SH and HK->SZ, the derivatives market, and Bond Connect Northbound reaching new highs, driving revenue growth. In the face of interest rate cuts by the Federal Reserve, the investment returns of the Hong Kong Stock Exchange may be affected, but by optimizing the interconnection mechanism, such as adding new ETF products and improving system efficiency, its market competitiveness and attractiveness have been enhanced. Meanwhile, the Hong Kong Stock Exchange emphasizes Shareholder returns through buybacks and dividends.free cash flowUsing this, it provides a cost-effective risk-free yield and dividend rate. Therefore, the bank raised the Target Price to 360 Hong Kong dollars, corresponding to a PE of 33.2x, which represents a 16% increase from the previous closing price, maintaining a Buy rating.