UBS: Lower HKEX (00388) target price to 450 Hong Kong dollars, expected net profit to increase by 16% year-on-year in the first quarter of this year.

UBS released a research report stating that it is expected that HKEX (00388) will announce its first quarter performance for 2026 on April 29. It is forecasted that the net profit after tax and revenue will be 4.7 billion yuan and 7.7 billion yuan respectively, with a year-on-year increase of 16% and 12%, and a quarterly increase of 9% and 5%. Net investment income (NII) in the first quarter is expected to decrease by 23% year-on-year and 16% quarterly to 1 billion yuan, mainly due to the weakening of HIBOR and a decrease in the contribution of net fair value changes. UBS has slightly adjusted its earnings forecasts for HKEX in the years 2026 to 2028 by 0% to 4%; the target price has been lowered from 462 Hong Kong dollars to 450 Hong Kong dollars; a "Neutral" rating is given. In mid-March, HKEX announced the first phase of a review of its listing framework competitiveness, focusing on measures to relax the requirements for listing with different voting rights as well as improving the channels for overseas issuers to list in Hong Kong. UBS believes that HKEX's continuing expansion of the listing system, these measures should further enhance its attractiveness to overseas companies, especially those with a WVR structure.