Company Coverage
Hong Kong Exchanges and Clearing (388 HK): 2Q26: Strong Beat On Core Revenue Amid Turnover Surges
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$405.00
HK$480.00
18.5%
HK$556.00
Analyst
Analyst
Highlights
- HKEX’s earnings rose 21% yoy to HK$5.4b, 16% above our estimates, thanks
to upbeat core revenue growth amid strong ADT and one-off gain from an
unlisted equity investment.
- Maintain BUY with a lower target price of HK$480.00.
Analysis
- Strong beat across the board. Hong Kong Exchanges and Clearing’s
(HKEX) delivered strong 2Q26 results as its revenue (+18% yoy) and
earnings (+22%) were 11%/16% ahead of our expectations. The beat was
broad-based, driven by: a) strong core revenue growth of 29% yoy on the
back of elevated trading turnover and listing activities, and b) HK$290m in
one-off valuation gains from an unlisted equity investment.
- Turnover rose to another record high even as the market fell. The Hang
Seng Index (HSI) fell around 8% qoq and Hong Kong's market capitalisation
also declined about 6% qoq in 2Q26. Even so, elevated volatility (+7ppt) lifted
market velocity, driving headline average daily turnover (ADT) up 5% qoq/
22% yoy to a record high of HK$289.5b. We also believe the incremental ADT
was mainly from: a) new IPO listings, and b) AI-related equities and ETFs.
Highlights
- HKEX’s earnings rose 21% yoy to HK$5.4b, 16% above our estimates, thanks
to upbeat core revenue growth amid strong ADT and one-off gain from an
unlisted equity investment.
- Maintain BUY with a lower target price of HK$480.00.
Analysis
- Strong beat across the board. Hong Kong Exchanges and Clearing’s
(HKEX) delivered strong 2Q26 results as its revenue (+18% yoy) and
earnings (+22%) were 11%/16% ahead of our expectations. The beat was
broad-based, driven by: a) strong core revenue growth of 29% yoy on the
back of elevated trading turnover and listing activities, and b) HK$290m in
one-off valuation gains from an unlisted equity investment.
- Turnover rose to another record high even as the market fell. The Hang
Seng Index (HSI) fell around 8% qoq and Hong Kong's market capitalisation
also declined about 6% qoq in 2Q26. Even so, elevated volatility (+7ppt) lifted
market velocity, driving headline average daily turnover (ADT) up 5% qoq/
22% yoy to a record high of HK$289.5b. We also believe the incremental ADT
was mainly from: a) new IPO listings, and b) AI-related equities and ETFs.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$405.00
HK$480.00
18.5%
HK$556.00
Analyst
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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