The performance was in line with expectations, and ADT was under pressure: the company achieved revenue and other revenue of HK$20.516 billion for the full year of 2023, an increase of 11.16% over the same period last year. Net profit to the mother was HK$11.862 billion, up 17.70% from the previous year. Net profit to the mother recorded the second highest in history. The performance was in line with expectations. The increase in performance was mainly due to a significant increase in net investment income from margin and settlement funds. The trading volume for the full year of 2023 was still sluggish. The average daily turnover of the Hong Kong stock market was HK$105 billion, down 16% year on year. ADT pressure caused the company's main business revenue to fall. The company's main business revenue for the full year of 2023 was 15.445 billion yuan, down 8.79% year on year.
Investment income increased sharply: by business sector, the company's revenue from transaction fees and trading system usage fees for the full year of 2023 was 6.081 billion yuan, down 11.06% year on year; settlement and payment revenue was 3.885 billion yuan, down 10.38% year on year; stock exchange listing fee revenue was 1,523 billion yuan, down 20.47% year on year; the decline in revenue was mainly due to a sharp decline in ADT. At the same time, the company achieved a significant increase in investment income for the full year of 2023, achieving net investment income of 4.959 billion yuan, an increase of 265.71% over the previous year. Thanks to the increase in interest rates on Hong Kong dollar and US dollar deposits brought about by interest rate hikes, interest income from cash and bank deposits increased dramatically.
IPOs in the Hong Kong stock market remained sluggish throughout 2023. In the whole of 2023, a total of 73 newly listed companies were listed in the Hong Kong stock market, a decrease of 17 compared with the same period. The amount raised was 46.3 billion yuan, a year-on-year decline of about 56%.
The valuation of Hong Kong stocks is imminent, and liquidity is expected to increase: since entering February 2024, the Hong Kong stock market has shown clear signs of recovery. The Hang Seng Index rose more than 6% throughout February, and all 12 major Hang Seng industries recorded gains. We believe that as expectations for the Federal Reserve to enter the interest rate cut cycle intensify and the continuous implementation of the company's strategic plans, the valuation of the Hong Kong stock market will be repaired, and liquidity is expected to increase.
Target price of HK$370, maintaining purchase rating: Considering the long-term growth prospects and competitive advantage of the Hong Kong Stock Exchange, we adjusted the company's revenue forecast for 2024/2025/2026 to 21,587 billion/ HK$25.079 billion; adjusted the net profit forecast to 12.410 billion/ 13.057 billion/ HK$14.160 billion, and adjusted the target price for the next 12 months to HK$370, corresponding 36 times PE in 2024. There is still room for an increase of 52.97% from the current price, and maintain the purchase rating.