00388 Overview

Market Performance: The HSI fell by 2.1% to close at 26,059, with significant declines in the HSCEI and HSTECH, while total market turnover reached $357.679 billion.

Oil and Gold Stocks Rise: Oil prices increased, boosting stocks like PETROCHINA and CNOOC by over 4%, while gold prices also rose, positively impacting companies such as SD GOLD and ZHAOJIN MINING.

Airlines and Financials Decline: Airlines faced losses due to disruptions in Middle East routes, with CHINA SOUTH AIR and CHINA EAST AIR dropping over 8%, while major financial institutions like HSBC and BOC HONG KONG also saw declines.

Chinese Developers and Insurers Struggle: Chinese developers like SUNAC and CHINA VANKE experienced significant drops, while insurers and brokers also faced losses, reflecting broader market concerns.

Morgan Stanley's Market Strategy: The report highlights new additions to the focus list for Hong Kong and Chinese markets, including GIGADEVICE and SINOPEC CORP, while removing SUNNY OPTICAL and ESPRESSIF.

Stock Performance: Notable stock movements include SINOPEC CORP and CHALCO showing gains, while GIGADEVICE and SUNNY OPTICAL experienced declines, with significant short selling activity reported across various stocks.

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.

Market Performance: The Hang Seng Index (HSI) rose by 249 points (0.9%) to close at 26,630, with a total market turnover of $288.42 billion.

Active Heavyweights: Notable stock movements included TENCENT (+1.2%), MEITUAN (+0.9%), and HKEX (+0.9%), while XIAOMI (-0.8%) and BABA (-0.1%) saw declines.

Top Gainers: SHK PPT surged by 7.1% to a new high, followed by WUXI BIO (+5.1%) and CHINA SHENHUA (+4.0%), indicating strong performance among HSI and HSCEI constituents.

Significant Movements: Johnson Electric experienced a remarkable increase of 17.4%, while HAO TIAN INTL fell by 10.9%, highlighting volatility in smaller stocks.

Earnings Performance: HKEX reported 4Q25 EPS of $3.43, exceeding expectations, with total revenue up 14.6% YoY and operating expenses only increasing by 0.8%.

Forecast Adjustments: HSBC Global Research raised its earnings forecasts for HKEX for 2026 and 2027 by 3% and 1.8%, respectively, while lowering average daily turnover projections for Hong Kong equities.

Dividend Increase: HKEX's net profit for 2025 rose 36% YoY to $17.75 billion, leading to a raised second interim dividend per share to $6.52.

Target Price Update: HSBC increased its target price for HKEX from $510 to $520, maintaining a "Buy" rating on the stock.

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.