Bank of America Securities expects strong second-quarter earnings from Hong Kong Stock Exchange to stabilize first-half net profit

On July 30, Jin10 Data reported that Hong Kong Exchange (00388.HK) is expected to announce its first-half performance on August 21, with a net profit of 6.3 billion yuan, a 1% decrease compared to the same period last year, and a 13% decrease compared to the first quarter of this year. The strong performance in the second quarter was mainly due to the recovery in trading volume and the rise in LME trading volume. The increase in assets earning interest and the improvement in the market were also major drivers of the quarterly rebound in interest income/investment income. Bank of America Securities maintains its forecast for the Hong Kong Stock Exchange, with a buy rating and a current price equivalent to a P/E ratio of 24 times in 2024, which is attractive in terms of valuation. Furthermore, policy-driven factors in the second half of the year may push prices higher, following news of Alibaba's inclusion in the Hong Kong Stock Connect, IPOs in the second half of the year, ETF expansion, and the reduction of dividend tax policy.