Citibank: Lowering the target price of the Hong Kong Stock Exchange (00388) to HK$460. The third quarter profit is expected to be dragged down by the weakening market atmosphere to maintain the “buy” rating

The Zhitong Finance App learned that Citi released a research report stating that it maintained the Hong Kong Stock Exchange (00388) “buy” rating, but lowered the target price from HK$495 to HK$460. The bank estimates that due to the slowdown in stock trading activity, HKEx's net profit for the third quarter fell 1% year on year to HK$4.9 billion, down 10% from quarter to quarter; total revenue is expected to be HK$7.9 billion, down 7% from quarter to quarter, up 2% year on year. The company will announce its third quarter results on November 6.

The bank said that despite strong initial public offering (IPO) activity in the third quarter, the market atmosphere weakened. The average daily turnover of Hong Kong stocks was HK$254 billion, down 12% from quarter to quarter, down 11% year on year. The bank expects investment revenue to drop 5% year over year to HK$1 billion, down 24% from quarter to quarter. Taking into account the weakening market climate, Citi lowered the average daily trading volume of Hong Kong stocks and its southbound capital transaction forecast, and lowered the HKEx's earnings per share forecast for the 2026-2028 fiscal year by 4% to 8% accordingly.