Goldman Sachs: Hong Kong's First Five-Year Plan Favors Hong Kong Stock Exchange (00388) Multi-Asset Strategy Maintains “Buy” Rating

The Zhitong Finance App learned that Goldman Sachs released a research report saying that Hong Kong's first “Five-Year Plan” and the new “Policy Address” include a road map to enhance Hong Kong's status as an international financial center, support the goals of the Hong Kong Stock Exchange (00388) to develop a multi-asset strategy, and plans to improve the connectivity of mainland enterprises with international capital, and are also expected to drive product supply and liquidity in the Hong Kong market. The bank maintains a “buy” rating on the Hong Kong Stock Exchange, with a target price of HK$532 for 12 months. Based on a three-stage dividend discount model, it is equivalent to 34 times the projected price-earnings ratio in 2027.

The bank believes that benefiting from the internationalization of the RMB, the Hong Kong Stock Exchange's next phase of growth will still be to expand fixed income and currency (FIC) products. In terms of spot stocks, listing reforms include simplifying prospectus disclosure, promoting dual major and secondary listings in Southeast Asia and the “Belt and Road” markets, and easing trading, spin-off and restructuring rules. In terms of market infrastructure and ecosystem, the Hong Kong Stock Exchange is advancing preparations for a potential “T+1” settlement cycle, while the Securities Regulatory Commission is preparing to include the RMB counter in the Hong Kong Stock Exchange southbound and encourage listed companies to set up RMB counters.

On the FIC side, the HKMA will launch a seven-day offshore RMB liquidity bidding mechanism, and the Securities Regulatory Commission will support the Hong Kong Stock Exchange to enrich RMB foreign exchange futures products. Furthermore, the government plans to expand the issuance of dim sum bonds, and the Hong Kong Stock Exchange is expected to launch an offshore RMB bond index. On the commodity side, the gold central settlement and settlement system is expected to be launched in the first quarter of 2027, and the Hong Kong Stock Exchange will introduce renminbi-denominated and physically settled gold futures.