Citi released a research report stating that it maintains the “sell and sell” rating on the Hong Kong Stock Exchange (00388), with a target price of HK$215. The company's net profit for the first quarter of this year was 3 billion yuan, up 14% quarterly (down 13% year on year), higher than market expectations. Core revenue increased 2% quarterly and 6% year over year, which was generally in line with market expectations. Investment income of 1.3 billion yuan rose 25% quarterly (down 13% year on year), better than market expectations by 23%, driven by additional portfolio income.
The bank pointed out that the overall profit of the Hong Kong Stock Exchange last quarter was 9% higher than market expectations, but the bank believes that this may mainly be the result of external portfolio earnings, but it also indicates that this is unlikely to be estimated. At the same time, the cost was 3% higher than expected. The bank indicates that macro-uncertainty and long-term high US interest rates may put short-term pressure on the stock price of the Hong Kong Stock Exchange.