Analysts Have Made A Financial Statement On Hong Kong Exchanges and Clearing Limited's (HKG:388) Half-Yearly Report
Hong Kong Exchanges and Clearing Limited (HKG:388) just released its interim report and things are looking bullish. The company beat expectations with revenues of HK$17b arriving 4.2% ahead of forecasts. Statutory earnings per share (EPS) were HK$8.34, 4.9% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Hong Kong Exchanges and Clearing's 18 analysts is for revenues of HK$32.4b in 2026. This reflects a modest 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.5% to HK$16.05. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$31.5b and earnings per share (EPS) of HK$15.38 in 2026. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Check out our latest analysis for Hong Kong Exchanges and Clearing
Despite these upgrades,the analysts have not made any major changes to their price target of HK$513, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Hong Kong Exchanges and Clearing, with the most bullish analyst valuing it at HK$620 and the most bearish at HK$420 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hong Kong Exchanges and Clearing shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Hong Kong Exchanges and Clearing's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 9.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hong Kong Exchanges and Clearing.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hong Kong Exchanges and Clearing following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Hong Kong Exchanges and Clearing analysts - going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Hong Kong Exchanges and Clearing that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.