JPMorgan has updated its model forecasts for Hong Kong Exchanges and Clearing Limited (HKEX). The bank raised its earnings per share forecasts for fiscal years 2026 to 2028 by 2%, primarily due to expected increases in net investment income and trading fees. It maintained its "Overweight" rating on HKEX but lowered the June 2027 price target from HK$535 to HK$510.
JPMorgan forecasts that the average daily total securities turnover for 2026, 2027, and 2028 will reach HK$546 billion, HK$588 billion, and HK$622 billion, respectively. The average daily derivatives volume for the same periods is projected to be 1.796 million, 2.083 million, and 2.375 million contracts. The bank's forecasts for Hong Kong's (including Southbound) average daily cash equity turnover are HK$258 billion, HK$272 billion, and HK$280 billion for those years.
The bank noted that the reduction in the price target is mainly due to a decrease in the expected price-to-earnings valuation multiple, moving from 36.2 times (one standard deviation above the average) to 33.5 times (half a standard deviation above the average). JPMorgan's current earnings per share forecasts for fiscal years 2026 to 2028 remain 1% to 2% below the market consensus.
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