The Zhitong Finance App learned that Goldman Sachs released a research report stating that after taking into account data from June to July, the Hong Kong Stock Exchange (00388) earnings forecast per share for the 2026-2028 fiscal year was raised by 1% to reflect continued market turnover. The bank predicts that the net profit for the second quarter to be announced by the Hong Kong Stock Exchange on August 19 will be HK$4.8 billion, up 9% year on year; profit excluding investment income is expected to rise 36% year on year to HK$3.8 billion. Goldman Sachs kept its 12-month target price unchanged at HK$540, corresponding to a projected price-earnings ratio of 34 times for the 2027 fiscal year, and reaffirmed the “buy” rating. The Hong Kong Stock Exchange is currently trading with a projected price-earnings ratio of 25 times for the 2026 fiscal year, far below the 10-year historical average of 34 times.
The stock price of the Hong Kong Stock Exchange has fallen by 5% since this year (as of July 14), roughly in line with the 6% drop in the Hang Seng Index. This happened at a time when the average daily market turnover was record. The bank believes this reflects investors' doubts about whether the high level of trading activity can continue, because the current round of average daily turnover growth has continued for more than 20 months, while the past growth cycle has generally only exceeded 12 months. However, the bank is optimistic about many of the daily average transaction and revenue growth drivers of the Hong Kong Stock Exchange entering the second half of the year, including strong IPO channels, reduced drag from large internet companies, and strong growth in northbound transactions.
Goldman Sachs pointed out that newly listed companies contributed significantly to turnover in the first and second quarters of this year. Coupled with an extensive list of IPOs, it will support volume growth in the second half of the year. Furthermore, the average daily turnover of the top eight Internet companies in the first half of the year plummeted 22% year on year, and their share of turnover fell to 15% from 23% in the same period last year. As the sector is expected to usher in a profit inflection point starting in the third quarter, and the low base effect, the drag on market transactions in the second half of the year is expected to decrease or turn positive. Structurally, with the internationalization of the RMB, the bank is optimistic that the expansion of fixed income and currency (FIC) products (such as treasury bond futures and bond links) will become the next long-term growth engine for the Hong Kong Stock Exchange.