Goldman Sachs: Expects HKEX second quarter net profit to increase by 9% year-on-year, reiterates "buy" rating.

Goldman Sachs released a research report stating that the stock price of the Hong Kong Stock Exchange has fallen by 5% year-to-date, roughly in line with the 6% drop in the Hang Seng Index, all while market daily trading volumes hit record highs. The bank believes this reflects investor doubts on whether the high level of trading activity can be sustained, as the current cycle of daily trading volume growth has been ongoing for over 20 months, whereas previous growth cycles have generally lasted just over 12 months. However, the bank is optimistic about the Hong Kong Stock Exchange's prospects for increased daily trading and revenue growth in the second half of the year, including strong new listing channels, reduced drag from large internet companies, and strong growth in northbound trading. After considering data from June and July so far, Goldman Sachs has raised its earnings per share forecast for the Hong Kong Stock Exchange for fiscal years 2026 to 2028 by 1% to reflect continued market trading volume. The bank predicts that the Hong Kong Stock Exchange's net profit for the second quarter, to be announced on August 19th, will be HK$4.8 billion, up 9% year-on-year; the profit expectation without investment income is expected to surge by 36% to HK$3.8 billion. Goldman Sachs maintains its target price of HK$540 over the next 12 months, corresponding to a forecasted P/E ratio of 34 for fiscal year 2027, and reiterates its "buy" rating.