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<Research>UOB Kay Hian Downgrades HKEX (00388.HK) to Hold, Lifts TP to $355
Recommend 29 Positive 52 Negative 24 |
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UOB Kay Hian wrote in its report that HKEX (00388.HK) will announce its 3Q results on 23 October. On the ride of the record high ADT of $350.3 billion in the last five trading days in September, the ADT in 3Q is expected to hike 20.7% YoY to $118.8 billion, prompting a 9.3% increase in quarterly revenue from key businesses. However, owing to a decline in NII caused by falling interest rates, UOB Kay Hian predicted that HKEX's revenue and net profit growth rates may be slower during the period, reaching 6.8% and 6% respectively. The Chinese authorities' policy combo, paired with the US entering a rate-cutting cycle, is believed to help bolster market sentiment and shore up in trading volume. The broker estimated that a 10% ADT rise could lead to a 4.8% EPS growth, but the NII decrease will exert downward pressure on earnings. Therefore, the broker viewed that there may be limited room for valuation re-rating and downgraded HKEX to Hold, with the target price lifted from $300 to $355. AAStocks Financial News |
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