[ET Net News Agency, 22 February 2018] J.P. Morgan lifted its target price for Hong
Kong Exchanges & Clearing (HKEx)(00388) to HK$300 from HK$250, and reiterated its
"overweight" rating.
The research house said trading volumes at HKEx had a strong start to the year, helped
by record EM flows and a healthy bout of volatility. This has led the stock to de-rate to
29.2x dynamic P/E, despite delivering a 42% total return in the last 12 months (versus 34%
for HSI).
In the last 13 years, higher-than-average growth in January trading volumes has more
often than not led to resilient turnover for the rest of the year, it added. JPM assumed
HK$142bn of ADT this year (up 44% y/y) to lead to consistent stock price performance.
Further, the research house expects marquee IPOs and FICC (fixed income, currencies and
commodities) revenues to provide the catalysts for multiples to at least mean-revert, with
risks of an overshoot. (KL)