Bullish year for HKEX expected with projected rise in average daily turnover

Analysts project a significant market upturn, driving HKEX’s P/E multiple up by 18% and setting a target price of $490.

The Hong Kong Exchange (HKEX) is set for a bullish year, with average daily turnover (ADT) expected to jump 55% year-on-year in FY25F, according to CGS International.

Analysts project a significant market upturn, driving HKEX’s price-to-earnings (P/E) multiple up by 18% and setting a target price of $490, representing a 36.2% upside from its current trading price of $359.8.

Southbound capital flows are expected to fuel HKEX’s momentum, with net inflows projected to hit $1.200b in 2025F, a 50% increase from last year.

Demand for new economy stocks has surged, with YtD inflows in 2025 already surpassing the total for 2024. Analysts expect southbound ADT to rise by 110% in FY25F, strengthening liquidity and reinforcing HKEX’s position as a dominant trading hub.

HKEX is also on track to reclaim its status as the world’s leading IPO market, with fundraising expected to reach $160b in 2025, an 80% increase from 2024.

The surge is driven by Chinese firms relocating listings from the US to Hong Kong amidst heightened regulatory scrutiny. New policies aimed at attracting mainland firms to list in Hong Kong are expected to further strengthen IPO activity.

Despite a 45% rise in HKEX’s P/E multiple from 2024 to early 2025, the exchange remains undervalued relative to its post-2016 average, indicating further upside potential.

Analysts predict that every 10% increase in ADT could boost HKEX’s net profit by 7%, reinforcing its strong earnings outlook.

Whilst optimism remains high, analysts caution that lower interest rates could impact HKEX’s investment income, whilst geopolitical tensions and changes in China’s A-share IPO policies could affect market sentiment.

However, with surging capital inflows and a revitalised IPO pipeline, HKEX appears well-positioned for a year of accelerated growth.