Goldman Sachs: Lowered target price of Hong Kong Stock Exchange (00388) to HKD 528, rating it as "Buy"

Goldman Sachs released a research report stating that it has updated its forecast model for Hong Kong Exchanges and Clearing Limited (00388), with the target price lowered from HK$546 to HK$528. The rating is "buy," with a forecasted price-to-earnings ratio of 35 times for 2027. The bank stated that the average daily cash trading volume in March was 2% lower than its forecast, mainly due to lower-than-expected Southbound trading activities, partially offset by increased non-Southbound trading. Derivative product trading performed strongly, with both stock and commodity derivative products showing strong quarterly growth. The bank raised its first-quarter trading and custody fees forecast by 1%, with revenue and net profit forecasts increased by 2% and 3% respectively, expecting a 14% year-on-year increase in net profit for the first quarter. Due to the ongoing conflict in the Middle East, Goldman Sachs has lowered its targets for MSCI China and the CSI 300 Index by 5% and 4% respectively to reflect global stagflation risks, more persistent U.S. interest rates, and ongoing geopolitical risk premiums. The bank has accordingly reduced its forecast for daily average trading volume in 2026 by 3% to reflect lower market value forecasts, while maintaining its trading pace assumption unchanged. Earnings per share forecast for 2026 was also lowered by 2%.