Dahua Jixian released a research report saying that it raised the Hong Kong Stock Exchange (00388) rating to “buy” and was more optimistic about profit prospects because the recovery in average daily turnover was encouraging, and net interest income was resilient in a longer than expected high interest rate environment, raising the HKEx's profit forecast for 2024 to 2026 by 6.7%, 1.4% and 1.6%, respectively. The target price was raised from HK$262 to HK$285.
According to the report, the company's profit for the first quarter was 2.97 billion yuan, 6.7% higher than the bank's forecast. It was mainly due to better external portfolio returns, higher transaction fees on the London Metal Exchange, and lower depreciation and amortization (D&A) fees, but this was partly offset by higher operating costs.