<Midday Update> HSI Falls by 489 Points; HSTI Declines by 132 Points; BABA Drops More Than 3%
Market Performance: The Hang Seng Index (HSI) fell by 489 points (1.9%) to 25,139, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines of 132 points (2.4%) and 188 points (2.1%) respectively.
Active Heavyweights: Major stocks like Alibaba, Xiaomi, and Ping An saw significant drops, with Alibaba closing down 3.6% at $143.3 and short selling ratios indicating high market activity.
Notable Declines: Several constituents of HSI and HSCEI, including Chinahongqiao and XPeng, reported substantial losses, with Chinahongqiao down 5.8% and XPeng down 4.9%.
Short Selling Trends: High short selling activity was noted across various stocks, with Ping An and Xiaomi having short selling ratios of 40.579% and 30.910% respectively, indicating bearish market sentiment.
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Analyst Views on 00388
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CICC: HKEX Performance Exceeds Expectations; Maintains Outperform Rating
HKEX Revenue and Profit Growth: CICC reported that HKEX's total revenue for 2025 is projected to reach HKD29.16 billion, a 30% increase year-on-year, with profits expected to grow 36% to HKD17.75 billion.
Quarterly Performance: In the fourth quarter, HKEX's revenue rose 15% year-on-year to HKD7.31 billion, with core fee income increasing by 17% to HKD6 billion and profits climbing 15% to HKD4.335 billion.
BofAS: HKEX (00388.HK) 2025 Net Profit Expected to Align Closely
Financial Performance: HKEX reported a net profit of HKD17.8 billion for FY25, a 36% year-on-year increase, with an average daily turnover (ADT) reaching a historical high of HKD250 billion, up 89% YoY.
IPO Fundraising and Future Outlook: The exchange's IPO fundraising surged to HKD287 billion, a 225% increase YoY, leading to revised earnings expectations for 2026-27, with a maintained target price of HKD520 and a Buy rating.
JPM: HKEX (00388.HK) Reports Strong 4Q25 Net Profit; Year-to-Date Average Daily Turnover Recovers; IPO Activity Increases
Financial Performance: HKEX reported a net profit of $4.3 billion for Q4 2025, a 12% decrease QoQ but a 15% increase YoY, surpassing JPMorgan's forecast by 19%. The FY2025 profit reached $17.8 billion, up 36% YoY, exceeding market expectations by 2%.
Trading Activity: After a seasonal dip in December 2025, trading volumes have improved, with an average daily turnover of approximately $260 billion year-to-date, despite the impact of the Lunar New Year period.
IPO Applications: HKEX entered 2026 with over 400 active IPO applications, a notable rise from 297 in Q3 2025, indicating a robust pipeline for new listings.
Market Outlook: Morgan Stanley maintained an Overweight rating on HKEX, projecting a target price of $540, anticipating continued strength in the share price following the positive quarterly results.
UBS Reports HKEX (00388.HK) Exceeds 4Q25 Expectations, but Lowers Target Price to HKD462
HKEX Financial Performance: UBS reported that HKEX's 4Q25 results exceeded expectations, with a 15% YoY revenue growth to HKD7.3 billion, driven by stronger net interest income and fees.
Profit and Cost Control: HKEX's net profit also rose 15% YoY to HKD4.3 billion, surpassing consensus estimates, attributed to effective cost management.
Future Outlook: HKEX plans to invest in growth while maintaining cost discipline, although it anticipates a tougher comparison in 1Q26.
EPS and Target Price Adjustments: UBS adjusted its EPS forecasts for HKEX for 2026, 2027, and 2028, and revised the target price from HKD471 to HKD462, maintaining a Neutral rating.
G Sachs: HKEX (00388.HK) Exceeds Expectations with 4Q25 Earnings; Maintains Buy Rating
Earnings Performance: HKEX's 4Q25 earnings exceeded expectations due to improved investment returns and reduced operating expenses, with earnings 5% above Goldman Sachs' forecast when excluding investment income.
Analyst Ratings: Goldman Sachs maintains a "Buy" rating on HKEX, projecting a 4% EPS growth for 2026 and a 12% year-over-year revenue increase, while setting a target price of HKD 546.
M Stanley: HKEX (00388.HK) Exceeds Quarterly Expectations; Target Price Set at $508
Financial Performance: HKEX reported a 15% year-over-year increase in net profit for 4Q25, surpassing market expectations and driven by higher net investment income and listing fees.
Trading Activity: The average daily turnover rose by 23% year-over-year to $230 billion, leading to increased trading and clearing fees.
Analyst Rating: Morgan Stanley has rated HKEX as Overweight, with a target price set at $508, reflecting confidence in the company's performance.
Dividends: HKEX announced a 36% year-over-year increase in net profit for 2025, raising the second interim dividend per share to $6.52.
CICC: HKEX Performance Exceeds Expectations; Maintains Outperform Rating
HKEX Revenue and Profit Growth: CICC reported that HKEX's total revenue for 2025 is projected to reach HKD29.16 billion, a 30% increase year-on-year, with profits expected to grow 36% to HKD17.75 billion.
Quarterly Performance: In the fourth quarter, HKEX's revenue rose 15% year-on-year to HKD7.31 billion, with core fee income increasing by 17% to HKD6 billion and profits climbing 15% to HKD4.335 billion.
BofAS: HKEX (00388.HK) 2025 Net Profit Expected to Align Closely
Financial Performance: HKEX reported a net profit of HKD17.8 billion for FY25, a 36% year-on-year increase, with an average daily turnover (ADT) reaching a historical high of HKD250 billion, up 89% YoY.
IPO Fundraising and Future Outlook: The exchange's IPO fundraising surged to HKD287 billion, a 225% increase YoY, leading to revised earnings expectations for 2026-27, with a maintained target price of HKD520 and a Buy rating.
JPM: HKEX (00388.HK) Reports Strong 4Q25 Net Profit; Year-to-Date Average Daily Turnover Recovers; IPO Activity Increases
Financial Performance: HKEX reported a net profit of $4.3 billion for Q4 2025, a 12% decrease QoQ but a 15% increase YoY, surpassing JPMorgan's forecast by 19%. The FY2025 profit reached $17.8 billion, up 36% YoY, exceeding market expectations by 2%.
Trading Activity: After a seasonal dip in December 2025, trading volumes have improved, with an average daily turnover of approximately $260 billion year-to-date, despite the impact of the Lunar New Year period.
IPO Applications: HKEX entered 2026 with over 400 active IPO applications, a notable rise from 297 in Q3 2025, indicating a robust pipeline for new listings.
Market Outlook: Morgan Stanley maintained an Overweight rating on HKEX, projecting a target price of $540, anticipating continued strength in the share price following the positive quarterly results.
UBS Reports HKEX (00388.HK) Exceeds 4Q25 Expectations, but Lowers Target Price to HKD462
HKEX Financial Performance: UBS reported that HKEX's 4Q25 results exceeded expectations, with a 15% YoY revenue growth to HKD7.3 billion, driven by stronger net interest income and fees.
Profit and Cost Control: HKEX's net profit also rose 15% YoY to HKD4.3 billion, surpassing consensus estimates, attributed to effective cost management.
Future Outlook: HKEX plans to invest in growth while maintaining cost discipline, although it anticipates a tougher comparison in 1Q26.
EPS and Target Price Adjustments: UBS adjusted its EPS forecasts for HKEX for 2026, 2027, and 2028, and revised the target price from HKD471 to HKD462, maintaining a Neutral rating.
G Sachs: HKEX (00388.HK) Exceeds Expectations with 4Q25 Earnings; Maintains Buy Rating
Earnings Performance: HKEX's 4Q25 earnings exceeded expectations due to improved investment returns and reduced operating expenses, with earnings 5% above Goldman Sachs' forecast when excluding investment income.
Analyst Ratings: Goldman Sachs maintains a "Buy" rating on HKEX, projecting a 4% EPS growth for 2026 and a 12% year-over-year revenue increase, while setting a target price of HKD 546.
M Stanley: HKEX (00388.HK) Exceeds Quarterly Expectations; Target Price Set at $508
Financial Performance: HKEX reported a 15% year-over-year increase in net profit for 4Q25, surpassing market expectations and driven by higher net investment income and listing fees.
Trading Activity: The average daily turnover rose by 23% year-over-year to $230 billion, leading to increased trading and clearing fees.
Analyst Rating: Morgan Stanley has rated HKEX as Overweight, with a target price set at $508, reflecting confidence in the company's performance.
Dividends: HKEX announced a 36% year-over-year increase in net profit for 2025, raising the second interim dividend per share to $6.52.
