JP Morgan: Slightly lowered target price of HKEX (00388) to 510 Hong Kong dollars, raised profit forecasts, maintained "overweight" rating.

J.P. Morgan released a research report stating that it has updated its model forecasts for Hong Kong Exchanges and Clearing Limited (00388). The firm has raised its earnings per share forecast for the 2026 to 2028 fiscal years by 2%, mainly due to expected increases in net investment income and trading fees. The firm maintains its "overweight" rating on HKEX, but has lowered its target price for June 2027 from 535 Hong Kong dollars to 510 Hong Kong dollars. J.P. Morgan forecasts that the total average daily turnover of securities in 2026, 2027, and 2028 will reach 546 billion, 588 billion, and 622 billion Hong Kong dollars respectively; while the average daily turnover of derivative products is expected to be 1.796 million, 2.083 million, and 2.375 million contracts respectively. The firm's forecast for the average daily turnover of cash equities in Hong Kong (including Southbound trading) is 258 billion, 272 billion, and 280 billion Hong Kong dollars. The firm pointed out that the decrease in the target price is primarily due to the adjustment of the expected price-to-earnings valuation multiple from 36.2 times (1 standard deviation above the average) to 33.5 times (0.5 standard deviation above the average). Currently, J.P. Morgan's earnings per share forecasts for the 2026 to 2028 fiscal years are still 1% to 2% below the market consensus expectations.