[ET Net News Agency, 9 November 2017] Deutsche Bank raised its target price for Hong
Kong Exchanges & Clearing (HKEX)(00388) to HK$184 from HK$170.7, and maintained its "sell"
rating.
The research house said HKEX reported a strong set of numbers, with net profit for 3Q at
HK$2bn (+32% QoQ, 30% YoY) and for 9-month 2017 at HK$5.5bn (+22% YoY), reaching 80% of
DB's estimated earnings.
Given the strong market turnover, the result was supported by (1) strong top-line growth
(+9% QoQ, +21% YoY), driven by an improved ADT of HK$94bn (+20% QoQ, +37% YoY); and (2)
better cost discipline, with the cost-to-income ratio at 31% (2Q: 34%, 3Q16: 36%).
However, DB said the positives are largely priced in; currently trading at 37x 2018 P/E,
its valuation remains stretched. (KL)