UBS lowers HKEX target price by 9% to HKD 320, rating "Neutral"

Jin10 data reported on April 10 that UBS published a research report indicating that it has lowered the target price for Hong Kong Exchange (00388.HK) by 9% from HK$351.8 to HK$320, rating it as "neutral." The report states that the Hong Kong Exchange will announce its performance for the first quarter of 2025 on April 30, with the bank expecting a year-on-year increase of 27% and 28% in quarterly after-tax net profit and revenue, respectively. It is expected that net investment income (NII) will decrease by 14% year-on-year and by 3% quarter-on-quarter to HK$1.16 billion. Considering the market activity and rising risk aversion since the beginning of the year, the bank has adjusted the average daily sales for the fiscal year 2025/26 upward by 9% and downward by 5% to HK$159 billion and HK$142 billion, respectively, which is below market expectations. The bank indicates that the rising expectations of interest rate cuts in the United States will pose significant resistance to HIBOR-driven NII; therefore, it has lowered the NII for the fiscal year 2025/26 by 10% and 19% to HK$4.6 billion and HK$3.8 billion, respectively. The earnings per share for the fiscal year 2025/26 have been adjusted upward by 1% and downward by 6% to HK$10.2 and HK$9.3, respectively.