CICC: Maintaining the HKEx (00388) “Outperform the Industry” rating target price of HK$520

The Zhitong Finance App learned that CICC released a research report stating that the Hong Kong Stock Exchange (00388) plans to disclose the results for the third quarter of 2026 on November 6. The bank expects the company's 3Q26 revenue to be flat year on year, down 9% from month to HK$7.78 billion, excluding investment income, main operating expenses revenue falling 1% year on year, down 7% month on month to HK$6.67 billion, profit falling 2% year on year and 11% month on month to HK$4.81 billion. In the first three quarters of 2026, the company's total revenue and profit are expected to increase by 12% and 15% year-on-year to HK$24.48 billion and HK$15.38 billion, respectively.

CICC's main views are as follows:

The high trading activity of various product lines has declined somewhat. It is expected that 3Q main fee revenue will drop 1% year-on-year

The bank expects HKEx's main fee revenue to drop 1% year on year and 7% month on month in the third quarter of 2026.

On the spot side, the average daily turnover (ADT) for the third quarter decreased 11% year over year and 12% month on month to HK$254.2 billion. Among them, the average daily turnover of Nanxia Capital decreased 30% year on year and 13% from the previous month to HK$107.3 billion, accounting for 21.1% of Hong Kong stock turnover; the average daily turnover of Northside Capital increased 15% year over year and decreased 15% month on month to 309.7 billion yuan, accounting for 8.1% of A-share turnover.

In terms of derivatives, the overall average daily turnover (ADV) of derivatives decreased 6% year over year and 14% month over month to 1.55 million units. Among them, the average daily trading volume of stock indices increased 1% year on year, fell 14% month on month to 733,000, and the average daily volume of individual stock options fell 11% year on year and fell 14% month on month to 820,000.

On the commodities side, the average daily volume of the London Metal Exchange (LME) increased 9% year over year and fell 9% month over month to 765,000 shares. In terms of listing, 31 IPOs were completed in the third quarter, and the amount raised reached HK$175.6 billion, up 123% year on year and 72% month on month.

The margin size is expected to decline, and investment returns will drag down overall performance

The bank expects HKEx's investment income for the third quarter of 2026 to remain flat year over year and fall 20% month on month to HK$1.08 billion. In the third quarter, the moving average 6-month, 1-month and overnight Hong Kong Interbank Offered Rate (HIBOR) decreased by 0.02 percentage points, up 0.14 percentage points from month to month, and rose 0.10 percentage points, respectively.

The bank pointed out that due to the easing of fluctuations in the Hong Kong stock market and the marginal weakening of the influence of geopolitical conflicts, derivatives and LME trading activity in the Hong Kong market declined; compounded by a month-on-month decline in margin requirements in the third quarter of the Hong Kong Stock Exchange, margin investment income declined or dragged down overall investment income performance.

Valuation is low, focusing on medium- to long-term trading opportunities brought about by policy and market reforms

On September 16, 2026, Hong Kong released its first five-year plan, proposing measures to optimize the efficiency of the securities market and expand capacity and connectivity. Market reforms such as RMB counters and T+1 settlement continue to advance, and the current valuation of the Hong Kong Stock Exchange is in a low position. The bank believes that the company has a “low valuation+high transaction flexibility+potential policy catalyst”, and it is recommended to focus on allocation value.

Risk Alerts

Regulatory uncertainty; geopolitical risk; capital market performance falls short of expectations.