HKEX 0388

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DJ MARKET TALK: HKEx Off 2.4%; 3Q Net Profit Tipped Down 29% - JPM

1114 [Dow Jones] HKEx (0388.HK) is down 2.4% at HK$129.60, reversing its recent outperformance on liquidity inflow to Hong Kong, perhaps due to a little bit of pre-results jitters with the bourse operator due to report its 3Q12 results Wednesday.

JPMorgan forecasts 3Q net profit to fall 29% on-year to HK$884 million on the back of lowered securities / derivatives turnover.

Still, it notes that the HSI has now reached a 14-month high driven by strong hot money inflows; "we expect the equity markets to continue benefiting from these inflows; particularly in view of limited investability in the residential markets as policy measures begin to tighten further," JPM says and keeps HKEx at Overweight with a HK$140 target.


Source: Dow Jones & Company, Inc.

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<Research Report>HKEX (00388.HK) kept Buy, target hiked to $167 - G. Sachs

In the latest research report, Goldman Sachs predicted the volume to go up in JPX, SGX, as well as HKEx.

In particular, Hong Kong is seeing the best potential driven by the Shanghai-HK Stock Connect, which will be launched in October.

Meanwhile, the IPO activities remained robust, and Mainland macro reform is becoming more clarified.

The Buy investment rating is maintained, with target price raised 6% to $167.

Source: AAStocks Financial News

[winston]

Surging HKEx belies `underweight' rating by Natalie Leung

Hong Kong Exchanges and Clearing (0388) shares rose to a three-year high even as HSBC cut its rating for local equities to "underweight" from neutral on concerns over Occupy Central.

HKEx climbed 3.08 percent to HK$154.10, the highest since August 2011. However, average daily turnover for the stock exchange in the first half dropped 8 percent on-year to HK$62.93 billion while that for June alone fell 7 percent on-year to HK$51.44 billion.

Funds raised through new listings in the first half surged 104 percent on-year to HK$81.14 billion, HKEx announced.

Goldman Sachs and Jefferies gave a "buy" rating to HKEx, at target prices of HK$167 and HK$179, respectively, mainly on the potential benefits of the Shanghai-Hong Kong Stock Connect.

But JPMorgan Asset Management managing director Tai Hui said its impact should not be overestimated.

"Just because the door is open doesn't mean you have to walk through it," Hui said, adding it depends on market sentiment, especially in the mainland.

On Occupy, Hui said a few days would not have a big impact but if the action lasts six to nine months, Hong Kong's competitiveness will be hit.

That came as a HSBC Global Research report voiced concerns over the economic effects of Occupy Central but still forecast that the Hang Seng Index can reach 25,000 by the year-end.

However, Fan Cheuk-wan, Asian equity research head at Credit Suisse Private Banking, said Occupy would not pose a threat to Hong Kong's financial system as she does not see it causing any market fluctuation.

International investors are more concerned about the attitude of Beijing to governing Hong Kong and whether the judiciary can remain independent.

Credit Suisse maintains a "neutral" rating on mainland and local stocks.

Source: The Standard HK

[winston]

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HKEX (00388.HK) kept Buy, target hiked to $186 - Citi
2014-07-24

Citigroup, in the latest research report, said HKEX (00388.HK) +1.900 (1.194%) Short selling $89.84M; Ratio 5.372% has posted robust gain recently, but it is still rated Buy, on steady economy and market prospect of the Mainland, coupled with Shanghai-Hong Kong Stock Connect.

The target price is raised from $160 to $186.

The Bank believes that the limit for Shanghai-Hong Kong Stock Connect will be increased gradually.

Meanwhile, the connection is expected to expand, while the Shenzhen Stock Exchange has expressed the interest to join the mechanism.

Source: AAStocks Financial News

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<Research Report>HKEX (00388.HK) kept Overweight, target up to $220 - M Stanley

HKEX (00388.HK) announced that LME's average transaction fees will be increased by 34%, exceeding the expected increase of 25%, Morgan Stanley said in a report.

The research house maintained the stock's rating at Overweight, with target price lifted from $215 to $220.

In addition, the HKEX expects the clearing business will bring in revenue of US$90 million each year, also beating Morgan Stanley's forecast figure of US$80 million.

The broker raised the stock's EPS forecasts for 2014/15/16 by 0.5%/5.2%/5% respectively.

Source: AAStocks Financial News

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<Blue Chip Results>HKEX (00388.HK) annual net profit up 13% to $5.165B; final div. $2.15

HKEX (00388.HK) announced the full-year results for the year ended 31 December 2014.

During the period, the company recorded an annualized growth of 13% in net profit to $5.165 billion, in line with the estimates of 11 brokers (ranging from +8.7% to +16.1%).

Basic earnings per share amounted to $4.44. Final dividend of $2.15 was distributed, a 25% rise from a year ago. Dividend payout ratio maintained at 90%.

During the period, EBITDA lifted 16% to $6.891 billion since the growth in revenue and other income outpaced the 7% increase in operating expenses. The overall EBITDA margin increased from 2013's 68% to 70% in 2014.

Source: AAStocks Financial News

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Brokers' latest ratings & TPs for HKEX (00388.HK) (Table)

HKEX (00388.HK) +0.300 (+0.171%) Short selling $29.54M; Ratio 4.840% yesterday (5 March) announced that its net profit climbed 13% year-on-year to $5.165 billion for the year ended 31 December 2014.

The latest investment ratings and target prices for the company by 15 securities brokers are listed as follows:

Broker│Investment Rating│Target Price (HK$)
Morgan Stanley│Overweight│225
BNP Paribas│Buy│211.11
UOB Kay Hian│Buy│205->210
Daiwa│Buy│209.2
Citigroup│Buy│208
Macquarie│Outperform│206
HSBC│Overweight│200
CICC│Hold│195.6
BOCOM International│Long-term Buy│195.3
Goldman Sachs│Buy│195
Jefferies│Buy│188
BofA Merrill Lynch│Neutral│185
JP Morgan│Neutral│185
Credit Suisse│Outperform│150


Source: AAStocks Financial News

[winston]

G Sachs lifts HKEX target to $355

Goldman Sachs revised up HKEX (00388.HK) +48.400 (+19.438%) Short selling $2.87B; Ratio 15.176% 's target price twice within a week, with a first rise from $195 to $220 on 9 April and the upward adjustment to $355 this time, being the highest target price out of 22 BROKERS.

The research house expected ADT to increase to $122 billion this year.

Despite more than 39% surge in HKEX's share price over the past seven days (from 30 March to 10 April), Goldman Sachs is bullish about the STOCK due to its correlation with
turnover.

Source: AAstocks.com

[winston]

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Citi lifts HKEX (00388.HK) target to $400; 2016 daily stock turnover to be $150B

Citigroup said in a report that it reiterated a Buy rating on HKEX (00388.HK) -0.600 (-0.210%) Short selling $577.66M; Ratio 18.793% with a target price lifted from $230 to $400 (equivalent to a 42x mid-2016 P/E), based on its projection of $150 million average daily stock turnover for 2016.

The research house also raised its 2015/16/17 EPS forecasts for HKEX by 39-42% (33-36% above market consensus) to $8.281/$9.662/$10.766 respectively, and increased its 2015 average daily stock turnover forecast for Hong Kong stocks from 91.22 billion to $129.4 billion.


Source: AAStocks Financial News

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JPM: HKEX 1Q net profit misses estimates; negative revisions expected

HKEX (00388.HK) -5.200 (-1.831%) Short selling $919.20M; Ratio 24.522% announced its net profit for the three months ended 31 March 2015 amounted to $1.58 billion, up 33% year-on-year, or up 4% quarter-on-quarter; such figure missed JP Morgan's expectation by 4% and the market consensus by 9%.

The broker predicted negative revisions for the stock.

JP Morgan maintained the Neutral rating with target price set at $285.

As it mentioned before, the market may be relatively optimistic about the prospect of rising turnover. The turnover may have peaked in early April, and there could be a seasonal decrease in transactions in summer.

Therefore, there may be downside revisions towards the stock.

Source: AAStocks Financial News