HKEX 0388

Re: HKEX 0388

Postby winston » Wed Jan 20, 2021 2:44 pm

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Hong Kong Exchanges & Clearing (388 HK) - Trading close to peak valuation

We forecast 2021e average daily turnover (ADT) to increase 20% y/y to HK$155bn (vs. HK$144bn previously), which has factored in positive drivers.

Share price has risen to peak valuation multiple of 43.7x 21e P/E.

Over the past decade, HKEX has been trading in a range of 21-47x 12-month forward PE. Its valuation multiple exceeded 40x three times – 46x in 2Q15, 42x in 1Q18 and 43x in 3Q20.

Comparing with valuation multiple expansion in 2Q15 and 1Q18, which were mainly driven by rising ADT, the current valuation multiple expansion would be supported by rising ADT and expectations of more IPOs and product offerings.

We are raising our earnings estimate by 10% and 4% in 20e and 21e respectively.

We expect return on equity to rise from 22% last year to 27% in 21e. Our Fair Value estimate is revised upwards to HK$480, based on a revised ADT assumption and 45x 12-month forward PE, which is close to peak valuation multiple. HOLD.

Source: OCBC
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Re: HKEX 0388

Postby winston » Tue Feb 23, 2021 7:17 am

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HKEX soars as China eyes easier trading

by Winnie Lee

Hong Kong Exchanges and Clearing (0388) hit an intra-day high of HK$587 yesterday as China said it is looking at easing restrictions on personal capital accounts that may help mainlanders to invest further in the local stock market.

The State Administration of Foreign Exchange will conduct a study to see if it can allow domestic investors to use their annual forex quota for the purchase of securities and insurance offshore, director of the capital account management department Ye Haisheng wrote in an article published in China Forex magazine.

The amount would be within an annual quota of US$50,000 (HK$390,000) per person.

HKEX is to announce its full-year and last-quarter results tomorrow and Goldman Sachs estimates it will earn 49 percent more year-on-year but 11 percent less quarter-on-quarter. The bank expects the basic earnings per share will be HK$2.34.

UBS expects daily turnover of the stock market will be HK$193 billion on average this year and further increase to HK$230 billion next year. UBS estimated the revenue growth in 2021-2023 at 19-35 percent.

In other news, HKEX is said to be studying the special-purpose acquisition company mechanism. A SPAC a "blank check" shell corporation designed to take a company public without going through the traditional IPO process.

An HKEX spokesman said the exchange has studied or reformed different listing mechanism plans to boost Hong Kong's competitiveness and attractiveness.

Source: The Standard

https://www.thestandard.com.hk/section- ... er-trading
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Re: HKEX 0388

Postby winston » Thu Feb 25, 2021 8:29 am

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Citi: Govt's Raised Stock Stamp Duty May Cut ADT by 10%, Cut HKEX's EPS by 5%

Citigroup mentioned in its report the Government’s decision to hike the stock stamp duty from 0.1% to 0.13%, which is set to reduce the city's market velocity and reduce ADT by 10%, and HKEX's EPS by around 5%.

The broker kept Buy on HKEX at the target price $575, in light of solid results.

Source: AAStocks Financial News
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Re: HKEX 0388

Postby winston » Thu Feb 25, 2021 8:55 am

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HKEX profit soars 23pc to record $11.5b

by Avery Chen

Hong Kong Exchanges and Clearing (0388) yesterday said its net profit soared 23 percent to a record HK$11.51 billion, beating expectations, largely due to a jump in stock turnover with record-high trading volumes through the Stock Connect.

However, its shares dived by 8.8 percent to HK$509, with mainland investors selling HK$4 billion worth of shares, after Financial Secretary Paul Chan Mo-po revealed plans to hike stamp duty on stocks trading from 0.1 percent to 0.13 percent, the first increase since 1993.

Both profit and revenue reached a new record high for the third year in a row.

Total revenue hit a record HK$19.19 billion, up 18 percent from a year ago, mainly generated from trading and clearing fees.

Thanks to the record average daily turnover, core business revenue surged 24 percent compared to HK$16.86 billion.

Revenue from Stock Connect jumped 91 percent to a record HK$1.93 billion.

But net investment income dropped 18 percent from a year ago, due to the lower fair value gains on collective investment schemes and lower interest income.

The company declared a second interim dividend of HK$4.46 per share, bringing a record full-year dividend of HK$8.17 per share.

Driven by the strong growth in biotech and new-economy fundraisings, HKEX ranked second globally for IPO fundraisings in 2020, raising a total of HK$400.2 billion, the highest amount since 2010.

Source: The Standard

https://www.thestandard.com.hk/section- ... ord-$11.5b

His comment came as Bloomberg reported that billionaire Li Ka-shing is planning an initial public offering through a SPAC in the United States to raise around US$400 million (HK$3.12 billion).
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Re: HKEX 0388

Postby winston » Thu Feb 25, 2021 9:44 am

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4Q20 RESULTS BEAT; A SURPRISED STAMP DUTY HIKE.

Strong 4Q20 results
Strategic initiatives to watch out for
Stamp duty hike would be negative to turnover

HKEX's 4Q20 results beat market expectation with net profit up 48% y/y.

EBIT and net profit were 2% and 5% ahead of consensus estimates respectively.

The beat was mainly driven by strong clearing and settlement fees.

HKEX appointed a new CEO this month and we believe the development of derivates and IPOs, and Connect expansion would remain the key initiatives to watch out for.

The HKSAR government announced the plan to hike stamp duty from 0.10% currently to 0.13%, which we believe would be a negative surprise to the market.

Over the longer-term, we believe it would have negative impact as higher trading cost is likely to reduce market velocity and would inhibit HKEX to expand its investor base.

HKEX has been trading at peak valuation multiple of 40x+ forward P/E. We expect share price is likely to under pressure in the near-term.

While we maintain our constructive view on HKEX over the medium- and long-term given its unique position to global capital flows, we believe earnings growth will have to catch up with expectations.

We maintain our Fair Value estimate of HK$480.

Source: OCBC
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Re: HKEX 0388

Postby winston » Thu Feb 25, 2021 10:35 am

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Hong Kong Exchanges and Clearing (388 HK)
2020: Lifting Of Stamp Duty May Put Pressure On Valuation


Robust growth in the Bond and Stock Connect systems lifted overall ADT growth.

HKEx maintained its global competitiveness as a destination listing business. It has become a prime destination for IPOs of Chinese bio-tech companies.

While we remain upbeat on HKEx’s fundamentals, these are likely to have been priced in.

Dividend yield has turned unattractive at 1.6% based on current lofty valuations.

Downgrade to SELL with a target price of HK$422.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 58a42cf1bf
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Re: HKEX 0388

Postby winston » Thu Feb 25, 2021 1:03 pm

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Latest TPs, Views on HKEX (00388.HK) Post Results (Table)

Brokers|Ratings|TPs (HK$)
UBS|Buy|650->615
Daiwa|Buy|447.1->602
Morgan Stanley|Overweight|580->600
Credit Suisse|Outperform|525->590
Citigroup|Buy|575->580
BofA Securities|Neutral|482->549
Nomura|Neutral|473.3->517.4
JPMorgan|Neutral|500
Goldman Sachs|Sell|410
Jefferies|Hold|360.04


Brokers|Views

UBS| IPO fundraising may stay stable; stock stamp duty impact priced in
Daiwa| Profit sets new high for three years, likely signalling new era in liquidity
Morgan Stanley| Stock stamp duty hike may curb speculative trades
Credit Suisse| Impact from stock stamp duty hike limited; transaction costs not the only consideration factor
Citigroup| Surprised of stock stamp duty hike; concerned about transaction cost impacts
BofA Securities| Resilient results priced in; stock stamp duty hike long-term negative
Nomura| TP lifted by 9% for FY20 trading volume's robust growth
JPMorgan| Market overreacts to stock stamp duty hike; 4Q20 results beat
Goldman Sachs| Concerned about stock stamp duty hike, cash & shareholding flow
Jefferies| Concerned about stock stamp duty hike

Source: AAStocks Financial News
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