The company disclosed its 2024 semi-annual results. The overall performance was stable. 24H1 achieved total revenue of HK$10.621 billion, which is basically the same as the same period last year. (1) 2024H1, the Hong Kong Stock Exchange's core daily turnover of HK$110.4 billion, is still bottoming out. The spot market's trading and settlement revenue and listing revenue declined, but LME trading and settlement fee revenue has offset most of the decline due to increased trading volume and fees. Among them, the total volume of fee-traded metal contracts increased by 30%. (2) In addition to the traditional main business, investment income continues to contribute to the hedging function. Judging from the yield, the net return of margin and settlement house funds 24H1 rose to 1.64%, compared to 1.58% in the same period last year. The return on investment in the company's project division increased from 4.80% in 23H1 to 5.33% in 2024H1. Ultimately, it contributed to the company's net investment income of HK$2.5 billion, a year-on-year decline of 5.8%. The decline was mainly due to a decline in margin size due to an increase in yen collateral, etc.
(3) 2024H1, shareholders' profit attributable to shareholders was 6.125 billion yuan, down 3% from the first half of 2023.
ETFs and benchmark derivatives continue to grow. (1) The average daily turnover of 24H1ETP recorded a semi-annual high of 14.4 billion yuan, an increase of 4% over the previous year. Twenty new ETPs were listed during the same period, including the first batch of prepaid subscription option ETFs and Asia's first virtual asset spot ETF. (2) Benchmark derivatives continue to develop. ① The total number of contracts traded daily for Hang Seng Technology Index futures and options 24H1 increased 15% compared to 23H1. ② The average number of daily contracts traded on the MSCI China A50 Connectivity (USD) Index futures increased 68% year-on-year in 24H1. ③ The average number of stock option contracts traded per day increased 10% year over year. ④ The average number of contracts traded per day during the USD/RMB (Hong Kong) futures contract period was nearly six times that of 23H1.
Profit forecast and investment advice: Considering that the Federal Reserve is expected to enter a cycle of interest rate cuts by the end of 2024, the Hong Kong Stock Exchange ADT is expected to be HK$115 billion in 2024. The company is expected to achieve net profit of HK$12.8 billion and EPS of HK$10.11 per share in 2024. The average PE value of the company in the past 5 years was 39x, and the average PE value in the past year was 28x. Considering the orderly recovery of the company's turnover after the interest rate cut, a reasonable PE valuation of 30x was given in 2024, corresponding to a reasonable value of HK$303.4 per share, maintaining the company's “gain” rating.
Risk warning: macroeconomic downturn, geopolitical instability, increased competition in international exchanges, etc.