20130816-DBS_Group-U-shaped_recovery_for_2013_11页_286kb

报告摘要

HK Exchanges & Clearing Summary

Core Content

This report from DBS Group Research provides an analysis of the performance and outlook for Hong Kong Exchanges and Clearing Limited (HKEx), focusing on its financial results for the first half of 2013 (1H13) and forecasts for the following years (FY14F and FY15F). The report is based on the company's financial data and market trends, with an emphasis on earnings, trading volumes, and valuation metrics.

Main Points

Earnings and Performance

1H13 Results: HKEx's 2Q13 net profit was in line with market forecasts, increasing by 9.6% year-over-year and 1% quarter-over-quarter. However, it was 8% below the firm's previous estimate due to higher operating costs and investment losses from the June sell-off.
Earnings Growth: The report highlights that HKEx's EPS for 2013 is expected to resume growth, albeit at a lower rate than previously forecasted. The earnings recovery in 2014 is anticipated to be more pronounced, driven by the contribution of LME Clear.
Key Misses: Investment income was a significant miss, declining by 66% year-over-year and 74% quarter-over-quarter, mainly due to marked-to-market losses on equities and bonds.

Trading Volumes and ADT Recovery

ADT Trends: The report forecasts a U-shaped recovery for average daily turnover (ADT) in 2013, similar to the trend in 2012. This is expected to be a positive catalyst for HKEX shares.
Trading Velocity: Trading velocity dipped to a recent low of 61% in July 2013, but the report expects a recovery as China's macroeconomic outlook improves.
Volume Growth: 2Q13 ADT was HK$62.3bn, a 24% increase from 2Q12's HK$50.2bn. Derivative volumes also increased by 14% compared to 2012.

Valuation and Price Target

Price Target: The updated price target for HKEx is HK$141.80, a decrease from the previous target of HK$166.70.
Valuation Metrics: The report includes various valuation ratios such as P/E, P/Book Value, and EV/EBITDA, which have been declining over time, indicating potential undervaluation.
Dividend Yield: The net dividend yield is expected to rise from 2.5% in 2012A to 4.0% in 2015F, reflecting an increase in dividend payouts and a stable payout ratio of 90%.

Key Financial Metrics

Revenue and Profit

Revenue: Expected to grow from HK$6,432m in 2012A to HK$8,472m in 2013F, and further to HK$9,448m in 2014F.
EBITDA: Projected to increase from HK$4,475m in 2012A to HK$5,868m in 2013F, and to HK$6,715m in 2014F.
Net Profit: Expected to rise from HK$4,084m in 2012A to HK$4,834m in 2013F, and to HK$5,803m in 2014F.

Operating Metrics

Cost-Income Ratio: Increased to 35.6% in 2013F, compared to 32% in 2012A, due to higher operating costs from LME.
ROAE: Deteriorated to 30.3% in 2013F, but is expected to improve to 31.0% in 2014F and 32.6% in 2015F.
EPS Growth: Expected to grow from HK$3.75 in 2012A to HK$5.03 in 2013F, and to HK$5.58 in 2015F.

Key Assumptions and Catalysts

Assumptions: The report assumes a recovery in ADT, driven by improved macroeconomic conditions in China and a narrowing valuation gap with developed markets.
Catalysts: The anticipated recovery in ADT is seen as a key positive catalyst for HKEX's share price in the second half of 2013.
Risks: One risk mentioned is the potential legal liability from a US lawsuit against LME, which HKEX has not provided for.

Peer Comparison

SGX: Holds a rating of 'Hold' with a target price of HK$7.15.
Bursa M’sia: Has a 'Buy' rating with a target price of HK$10.12.
HKEx: Maintains a 'Buy' rating with a target price of HK$141.80, which is 12.1% above the closing price of HK$126.50 as of 16 August 2013.

Summary of Key Financials

Metric	2012A	2013F	2014F	2015F
Turnover (HK$ m)	6,432	8,472	9,448	10,267
EBITDA (HK$ m)	4,475	5,868	6,715	7,375
Pre-tax Profit (HK$ m)	4,845	5,769	6,946	7,711
Net Profit (HK$ m)	4,084	4,834	5,803	6,443
EPS (HK$)	3.75	4.20	5.03	5.58
Diluted EPS (HK$)	3.66	4.10	4.91	5.45
DPS (HK$)	3.19	3.77	4.52	5.02
BV Per Share (HK$)	15.45	15.81	16.68	17.52
PE (X)	33.7	30.1	25.2	22.7
P/Book Value (X)	8.2	8.0	7.6	7.2
Net Div Yield (%)	2.5	3.0	3.6	4.0
Net Debt/Equity (X)	0.1	0.1	0.0	CASH
ROAE (%)	30.3	26.9	31.0	32.6
EPS CAGR (12-14%)	11.8	19.8	11.0

Conclusion

The report concludes that despite the challenges faced in 1H13, HKEx is positioned for a recovery in trading volumes and earnings in 2H13 and 2014. The firm maintains a 'Buy' rating with a revised target price of HK$141.80, acknowledging the lower growth projections due to the changed market conditions and the impact of the June sell-off. The recovery in ADT is expected to drive share price performance, and the firm remains optimistic about the long-term prospects of HKEx.

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