News

Hong Kong Exchanges & Clearing Q4 Earnings

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4.6

Andrew R. Michaud

• February 27, 2024

Overview

Hong Kong Exchanges & Clearing is set to announce its fourth-quarter results this Thursday. Analysts are predicting a slight drop in net profit compared to the previous year, with revenue also expected to decrease.

Net Profit Forecast

Analysts are forecasting a net profit of HK$2.71 billion, a 9.1% decrease from the previous year. Nomura analysts believe that weak equity-trading activity will weigh on HKEX's earnings for the fourth quarter.

Revenue Forecast

Revenue is estimated to be HK$4.90 billion, lower than the HK$5.20 billion reported in the same period last year. The decline is attributed to weaker cash trading fees and tariffs, as well as lower clearing and settlement fees. However, income from the HKEX-owned London Metal Exchange could see a 13% increase sequentially.

Stock Performance

HKEX's shares have declined by 7.3% since the beginning of the year, following an 8.4% drop in the fourth quarter.

Key Points to Watch

Average Daily Turnover

Analysts from UOB Kay Hian noted that HKEX may not see an increase in average daily turnover without catalysts from China. Investors will be paying attention to the exchange's outlook on trading activities for 2024.

IPO Market

Despite a slow start with five IPOs in January raising HK$2.1 billion, down 50% and 47% respectively from the previous year, analysts suggest that Hong Kong's IPO market could improve in 2024. Chinese regulators' efforts to stabilize the onshore IPO market may benefit Hong Kong.