occurrences
The Hong Kong Stock Exchange announced its 2024 semi-annual results report. 2024H1 realized revenue and other income of HK$10.621 billion, yoy +0.4%; core business revenue of HK$9.69 billion, yoy -0.4%; EBITDA of HK$7.661 billion, yoy -3%; net profit to mother of HK$6.125 billion, yoy -3%.
Performance Overview: 2Q24 profit increased year-on-year, with strong performance in 2024H1 achieved revenue and other earnings of HK$10.621 billion, yoy +0.4%; net profit to mother of HK$6.125 billion, yoy -3%. 2024Q2 realized revenue and other earnings of HK$5.42 billion, yoy +8% /qoq +4%; net profit to mother of HK$3.155 billion, yoy +9% /qoq +6%. 2Q24's performance reached a record high in the second quarter of the year, mainly due to (1) the increase in transaction and settlement fees due to the year-on-year increase in ADT in the 2024Q2 spot market; (2) the company's capital investment income increased, and the capital investment income of the 2024Q2 company was HK$0.366 billion, yoy +37%.
Segment performance: The trading business grew month-on-month, and investment income declined slightly (1) The company achieved trading and trading system usage fees of HK$3.29 billion in 2024H1, yoy +3%, mainly due to an increase in the number of derivatives transactions. (2) The settlement fee and settlement fee is HK$2.125 billion, yoy +5%, mainly due to the increase in the average daily turnover of Shanghai and Shenzhen Stock Connect. (3) Listing fee HK$0.725 billion, yoy -8%. (4) The company achieved net investment income of HK$2.521 billion, yoy -6% in 2024H1, mainly due to a decrease in net investment income from margin and clearing house funds; net investment of the company's capital of HK$0.901 billion, yoy +10%.
Market performance: Market trading rebounded sharply in 2Q24, and the overall market is expected to recover further in the future
(1) Spot market: 2024H1 spot market ADT 110.4 billion HKD, yoy -4%, up 17% from 2023H2; 2024Q2 spot market ADT 121.6 billion HKD, yoy +18% /qoq +22%; 2024H1 achieved northbound ADT 130.2 billion yuan, yoy +19%, southbound ADT 37.5 billion, yoy +11%. (2) ETP market: 2024H1 ETPS-adt reached HK$14.4 billion, yoy +4%, a half-year high. (3) IPO market: 2024H1, 30 companies listed on the Hong Kong Stock Exchange, HK$13.4 billion, yoy -25%, the 2024Q2 IPO market has recovered, 18 newly listed 2024Q2 companies, qoq +50%, total capital raised HK$8.6 billion, qoq +79%. Subsequent IPO application reserves are still good, with 107 applications being processed as of the end of June 2024.
Profit Forecasts, Valuations, and Ratings
The Company's 2024/2025/2026 revenue is expected to be HK$21,927/23,768/26,393 million, respectively; net profit to mother is HK$12,398/12,980/14,324 million, or +5%/+10% YoY; and EPS of HK$9.78/10.24/11.3, respectively. We are still optimistic about the company's short-term profit recovery ability and long-term growth potential, and maintain a “buy” rating.
Risk warning: The Fed's interest rate hike exceeded expectations, domestic economic recovery fell short of expectations, and changes in market liquidity exceeded expectations.