Hong Kong Exchanges & Clearing Q3 Results: What You Need to Know

Net Profit Forecast

According to a FactSet poll of three analysts, Hong Kong Exchanges & Clearing is expected to report a net profit of HK$2.94 billion (US$375.5 million) for the third quarter. This would represent a significant 30% increase from the previous year.

Revenue Forecast

The FactSet poll also estimates that revenue for the third quarter will be around HK$4.98 billion, a notable 26% rise compared to the same period last year. Citi analysts believe that the expected revenue growth is primarily driven by higher investment income, while core revenue may be impacted by muted cash activities. However, Nomura analysts anticipate that HKEX's core and total revenue will remain relatively unchanged from the previous quarter due to weak cash equity.

What to Watch

Average Daily Turnover (ADT)

Investors will be closely monitoring HKEX's ADT, an important metric for the exchange operator. In the first half of the year, ADT fell by 16% to HK$115.5 billion due to weak global IPO activity. Although Hong Kong's IPO performance was comparatively better than other markets, the prevailing market sentiment continued to weigh on trading volume. Citi analysts project a 5% sequential decline in ADT for the third quarter as sluggish market sentiment persists.

Listing Fees

Another area of focus is HKEX's listing fees, which indicate the number of listed companies. Based on a FactSet poll, listing fees are expected to have dropped to HK$363.5 million in the third quarter, down from HK$459 million in the same period last year.