UBS: Lowering Hong Kong Stock Exchange (00388) Target Price to HK$436 to Maintain “Neutral” Rating

The Zhitong Finance App learned that UBS released a research report stating that the target price on the Hong Kong Stock Exchange (00388) was lowered by 4% from HK$454 to HK$436, maintaining a “neutral” rating. The bank raised its forecast for the 2026/2027/2028 fiscal year, including 1) an increase in average daily turnover (ADT) to HK$2680/2330/262 billion, lower than market expectations of 0%/16%/11%; 2) an increase in earnings per share of 7%/2%/1%. The target price was lowered due to market weakness in the non-tech sector and capital flows in the Asian market that may continue to put pressure on valuation multiples.

The Hong Kong Stock Exchange will announce the results for the second quarter of the 2026 fiscal year at noon on August 19. The bank predicts net profit and revenue after tax for the second quarter to be HK$4.9 billion and HK$7.9 billion, higher than market expectations of 5% and 4%, an annual increase of 10% and 9%, but a decrease of 6%/4% month-on-month. Investment revenue is estimated at HK$945 million, a year-on-year and quarterly decline, mainly including a six-month rolling decline in HIBOR. Overall ADT increased to HK$290 billion in the second quarter of 2026, an increase of 22%/5% year-over-year/quarterly. The momentum of IPOs is still strong. A total of 47 companies were listed in the second quarter, raising about HK$100 billion, while in the first quarter a total of 40 companies were listed, raising HK$110 billion, and in the second quarter of 2025, 27 companies were listed, raising HK$91 billion.