Hong Kong Exchanges and Clearing Earnings: A Very Strong End to the Year

We raise our fair value estimate for wide-moat Hong Kong Exchanges and Clearing by 8% to HKD 325 per share with full-year results. The exchange saw significant acceleration in the fourth quarter, surpassing our expectations for material improvement on the third quarter. Over the trailing 12 months, the Hang Seng Index delivered double the performance of the S&P 500 or Nasdaq 100. This suggests to us that Hong Kong’s financial markets, which are highly leveraged to China’s economy, have awoken from their slump since early 2021.