Lyon: HKEX(00388) "outperformed the market" rating upgraded to a target price of 374 Hong Kong dollars.

Lyon released a research report claiming to give HKEX (00388) an "outperform the market" rating, with the target price raised from HKD 338 to HKD 374. Based on higher listing fee revenue and improved outlook in average daily turnover, profit forecasts for 2024 to 2026 have been adjusted upwards by 3%, 5%, and 10%, while revenue forecasts for the same period have been increased by 3%, 4%, and 7%. Lyon believes that the recovery of IPOs and inflow of southbound funds will be the two fundamental drivers for HKEX this year. The bank expects strong performance in the fourth quarter of last year, with a projected 46% year-on-year growth in net profit after tax, earnings per share adjusted to HKD 10.28, and a dividend payout ratio of 90%. Lyon points out potential catalysts for HKEX including positive surprises in mainland policies, potential dividend tax breaks, and a more innovative three-year strategic plan.