＜Research＞UBS Cuts HKEX (00388.HK) TP to $261, Expects 2Q24 NPAT to Rise 10% YoY

　　HKEX (00388.HK) -3.200 (-1.357%) Short selling $244.29M; Ratio 23.510% is expected to announce its interim results on 21 August. UBS forecasted in a report that the group's net profit after tax would reach $3.2 billion in 2Q24, up 10% YoY and 7% QoQ, while quarterly revenue is expected to reach $5.5 billion, up 11% YoY and 7% QoQ, in line with the market's expectations.

　　UBS estimated that HKEX's net investment income for 2Q24 will grow by 3% YoY to $1.2 billion, but down 12% in QoQ terms. For the full year, UBS now forecasted revenue and net profit after tax to reach $21.7 billion and $12.3 billion, up 6% and 4% YoY, slightly ahead of the market's general expectations of 4% and 2% growth.

　　HKEX's average daily revenue (ADT) for 2Q24 was $122 billion, up 18% YoY and 22% QoQ. This was the best performance since 1Q23, and was mainly driven by the market's rebound in April and May. However, UBS commented that ADT has slowed down from its May peak and has fallen back to around $99 billion since July, compared to $140 billion in May. ADT for 2H24 is projected to be broadly flat HoH. For the year as a whole, ADT is forecasted to rise YoY from a low base.

　　Taking into account the market performance, UBS lowered its ADT forecasts to $110 billion, $123 billion and $137 billion for 2024/25/26 respectively, and trimmed its EPS forecasts by 1%, 2% and 3% to $9.7, $9.9 and $10.1 accordingly. The broker maintained a Neutral rating on HKEX, with a target price lowered from $275 to $261.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-23 16:25.)