HKEX 2026 Interim Results: Strong Results Demonstrate Robust Resilience

Hong Kong Equities Choppy, but HKEX's Growth Momentum Remains Intact

Table 1: HKEX Q2 Results vs. Forecasts

In HKD’ billion, unless otherwise stated	Forecast	Actual	Forecast Growth	Actual Growth
Revenue	7.9	8.5	9.6%	17.7%
EBITDA	6.3	6.8	10.1%	19.9%
Net Profit	4.9	5.4	10.2%	21.1%
Source: Bloomberg L.P., iFAST Compilations. Data as of 30 June 2026

The Hang Seng Index has been notably choppy this year, underperforming other major markets by a clear margin. As a company whose share price is highly sensitive to index movements, HKEX's share price has also been weighed down as a result. Nevertheless, following a strong first quarter, HKEX once again delivered an impressive set of interim results, demonstrating its resilience within the financial markets.

Revenue Achieved HKD 14 billion - Remarkable Growth of 26.7%.

For the first half of this year, HKEX's revenue reached HKD 14 billion, up 26.7% y-o-y. Supported by operating leverage, net profit also recorded a 23.7% y-o-y increase.

Figure 1: HKEX's Revenue by Major Business Line

Note: This chart excludes market data fees, depository fees and other income; therefore, the sum of the three revenue lines shown does not equal total revenue. Legend

Figure 2: Average daily transaction data of the Stock Exchange

Active Trading Regardless Weak Market: Although the Hong Kong stock market's performance has been underwhelming, trading activity in the Hong Kong market has in fact remained active regardless of the direction of capital flows. In the cash market, the Stock Exchange's average daily turnover (ADT) reached HKD 283 billion in the first half of this year, up 18% y-o-y and marking a record half-year high. On the derivatives side, the average daily volume of derivatives and stock options contracts traded on the Futures Exchange and Stock Exchange also reached 1.8 million contracts, likewise a record half-year high, indicating that market participants remain actively engaged in trading activity across the Hong Kong market. In the derivatives market specifically, technology-themed investment activity has also driven a significant increase in trading volume for the Hang Seng TECH Index.

This shows that regardless of whether the activity involves capital allocation, strategy adjustment, or trading in response to market conditions, HKEX is able to benefit. The record ADT drove HKEX's trading fees and trading tariffs up 22.1% y-o-y to HKD 6 billion in the first half, while clearing and settlement fees rose 37.8% y-o-y to HKD 4.4 billion, jointly propelling HKEX's overall revenue growth.

Figure 3: Growth Rate of the Stock Exchange's Listing Revenue

IPO Market Is Picking Up: Although listing fees accounted for only 6.3% of total revenue in the first half, their growth rate has clearly accelerated, supported by robust listing demand.

As of the first half of the year, 86 new companies were listed on the Hong Kong securities market, up 95.4% y-o-y, while IPO fundraising also rose 94.1% y-o-y to HKD 212.4 billion, reflecting strong demand for fundraising in Hong Kong. Among the newly listed or prospective companies are several high-profile names or companies adopting the “A+H” dual-listing structure, such as Luxshare Precision and Eoptolink Technology. As some of these companies belong to currently sought-after sectors such as technology, and amid growing market focus on the artificial intelligence theme, their listings are expected to help drive listing fee revenue and secondary market trading, which will in turn translate into higher trading fee income and further boost HKEX's revenue growth. More importantly, the trend of numerous mainland Chinese companies listing in Hong Kong also reaffirms Hong Kong's status as a “super-connector” — while driving revenue growth, this also increasingly highlights Hong Kong's advantages in the international financial market.

The Environment is Becoming More Favourable.

Off-shore Government Bond Future: HKEX recently launched the world's first offshore five-year China government bond futures contract, filling a gap in standardised risk management tools in the offshore market, while also complementing the existing Bond Connect scheme — making HKEX's fixed income product offering more complete. In addition, HKEX has been enriching its exchange-traded products (ETP) matrix through collaboration with other Asian exchanges, in order to meet investors' diverse needs and strengthen investor engagement with the Hong Kong market.

LME Transaction Broke the Record: Beyond conventional financial products, the London Metal Exchange (LME) also delivered an impressive performance. Driven by aluminium and copper, the number of chargeable metal contracts traded on the LME rose 18% y-o-y to 844,000 lots in the first half, the best half-year performance on record. Although aluminium remains the dominant contract on the LME (accounting for 40.6% of total trading volume in the first half), copper — the second-largest contract at 22.4% — is a key material used in the power supply and cooling systems of AI data centres. Against the backdrop of accelerating AI investment, demand for copper is expected to keep rising, which should in turn support continued growth in LME trading volumes.

Improved Environment is Providing Liquidity.

At the same time, HKEX has also been continuously improving its trading regime to create a more favourable environment for development. To attract more high-quality companies to list in Hong Kong, HKEX has reformed its listing regime — for example, by lowering the market capitalisation requirements for weighted voting rights (WVR) companies, and allowing all new applicants to apply for listing on a confidential basis, thereby reducing listing costs for companies.

This suggests that HKEX's product matrix expansion and regulatory enhancements may reinforce one another in a virtuous cycle. A more comprehensive product ecosystem will help attract capital and companies, while a more flexible listing and trading regime will further lower barriers to market participation and inject liquidity into the market. In the long run, this should progressively reinforce HKEX's position in global asset allocation.

Resilient Financial Performance, Broad Growth Prospects Ahead

Figure 4: HKEX's Profitability

Strong revenue growth has further supported an improvement in HKEX's profitability, with operating margin and net profit margin reaching 80% and 63.3% respectively in the first half — both outperforming levels seen in recent years. According to the results briefing, HKEX is actively advancing platform upgrades, including enhancements to the Orion Cash Platform and Orion Derivatives Platform, to ensure market participants benefit from more efficient information exchange and an improved settlement matching experience. Meanwhile, higher profit margins and a relatively fixed cost structure help HKEX generate more stable cash flow from its operating activities, providing sufficient funding support for future research and development initiatives.

On the other hand, resilient financial performance also supports HKEX's continued delivery on its stable shareholder return policy. The interim dividend this time is HKD 7.43 per share, with a payout ratio of 89.1% based on earnings, broadly in line with historical levels. Amid heightened market volatility, this high and consistently stable payout policy underscores HKEX's financial resilience as a market hub, and offers an attractive asset allocation option for long-term investors seeking stable cash flow.

We believe HKEX's high correlation with market indices is the primary reason weighing on its share price performance, reflecting that the market may be overly anchoring HKEX's valuation to index movements. However, this pricing approach fails to fully capture the resilience of its revenue structure. As HKEX continues to optimise its trading and listing rules and enrich its product matrix, alongside its robust financial and operating performance, its revenue growth momentum has increasingly demonstrated characteristics that are independent of index direction. We believe HKEX's resilience is currently being underestimated by the market, and the gap between its fundamentals and its weak share price performance is precisely the core source of potential valuation re-rating going forward. In light of this, we maintain our earnings forecast for HKEX, with a target price of HKD 518.1 by the end of 2028, implying a potential upside of 28.1% as of 2 September 2026.

Figure 5: 12-Month Forward P/E of HKEX

Table 2: Valuation and EPS Forecast of HKEX

	2025A	2026E	2027E	2028E
EPS(HKD)	14.1	16.0	17.6	18.2
EPS Growth Rate	36.1%	14.1%	9.7%	3.4%
P/E Ratio	28.8	25.2	23.0	22.2
Dividend yield	3.1%	3.6%	3.9%	4.0%
Target price at the end of 2028 (Based on 28.5x Forward P/E)				518.1
Potential upside at the end of 2028 (Based on 28.5x Forward P/E)				28.1%
Source: Bloomberg L.P., iFAST Compilations. Data as of 2 September 2026.

Declaration:

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.