Goldman Sachs expects the compound annual growth rate of the Hong Kong Exchanges and Clearing Limited to contract by approximately 16% for the fiscal years 2024-26.
According to the 36Kr Finance APP, Goldman Sachs released a research report stating that it has raised the forecasted earnings per share of Hong Kong Exchanges and Clearing Limited (00388) for the fiscal years 2024-26 by 3% to reflect the recent increase in stock market trading volume, and raised the target price from 306 Hong Kong dollars by 3.9% to 318 Hong Kong dollars. The stock is mainly driven by the trading volume of the Hong Kong stock market, contributing approximately 40% of its revenue. Improvement in mainland stock market sentiment, decline in real interest rates, and resurgence in IPO activities may further improve profitability. The bank emphasizes that the risk-return of Hong Kong Exchanges and Clearing Limited remains attractive, with a rating of "conviction buy".
The bank pointed out that about 85%-90% of Hong Kong Exchanges and Clearing Limited's investment income is sensitive to interest rates. Although an increase in trading volume, improvement in market sentiment, and corresponding increase in outstanding contracts in derivative business may increase revenue, it is still influenced by the Hong Kong Interbank Offered Rate (HIBOR) levels. The bank expects the compound annual growth rate to contract by approximately 16% for the fiscal years 2024-26.
