Goldman Sachs released a research report stating that HKEX (00388) announced the purchase of the Central Trading Plaza property to serve as its permanent headquarters. It is believed that the acquisition of headquarters property by HKEX will help strengthen its role as an important component of Hong Kong's financial market infrastructure, as well as its brand image as a crucial exchange connecting the East and West, with a target price of HKD 378 and a rating of 'Buy.'
According to the terms of the transaction agreement, HKEX is expected to effectively convert the investment returns from its external portfolio into a 3% capitalization rate, believing that monetizing external investments will help reduce the volatility of investment income. Over the past nine years, HKEX's external investment portfolio has generated an annual investment return of about 4%. In contrast, Goldman Sachs projects that the investment return for the fiscal year 2026 to 2027 will reach 5% to 6%. Currently, this transaction is expected to have a negative impact of about 1.5% to 2% on the Exchange's pre-tax profits, potentially reducing investment income by about 0.35 billion yuan, but it will also save approximately 0.18 billion HKD in rent.
