Analyst stays optimistic on HKEX recovery in H2 22

Speedy listing pace of China ADRs will help in the recovery.

Despite reporting millions of net losses, Hong Kong Exchanges and Clearing Limited (HKEX) may still recover in the second half of the year through performances in China ADRs and Stock Connect schemes. 

UOB Kay Hian said this in its latest report, explaining that China’s ADRs’ speedy listing pace and expanding its Stock Connect will boost the recovery. It also suggested BUY with a target price of HK$435.43.

“Despite the temporary setback in sentiment, we believe that the market will look ahead towards a steep earnings recovery in 2023F and partially price in the potential ADT uplift due to Chinese ADRs’ delisting,” it said.

HKEX’s Stock Connect is the listing’s mainland-HK programme, which recently included exchange-traded funds trading. 

HKEX Chairman Laura Cha had said the IPO pipeline is still strong even as there was a slowdown of IPO activity in the first half of this year.