Goldman Sachs raises the target price for Hong Kong Exchanges and Clearing to HKD 524 with a rating of "Buy"

Goldman Sachs published a research report stating that the Hong Kong Exchanges and Clearing (HKEX) has simplified trading and settlement fees, and the Securities and Futures Commission has recently expanded the holding limits for derivative products. The bank believes this is a step towards simplifying the platform, enhancing capital efficiency for market participants, and aligning with international standards.

The bank indicated that based on the forecast for the 1-month Hong Kong Interbank Offered Rate (HIBOR), it expects the yield from Hong Kong's margin balances for HKEX to be revised down to 1.97%, 1.39%, and 1.42% for this year, next year, and 2027, respectively; the daily average sales for each year are estimated to be HKD 249 billion, HKD 275 billion, and HKD 299 billion.

Goldman Sachs stated that it has raised its earnings per share forecast for HKEX by 2%, 3%, and 4% for this year, next year, and 2027, respectively, with the target price increased from HKD 509 to HKD 524, based on a three-stage dividend discount model, which corresponds to a forecasted price-to-earnings ratio of 40 times for next year, maintaining a "Buy" rating