HKEX maintains strong margins amidst China market uncertainty: analyst

HKEX is forecast to deliver a 69.4% operating margin and a 75.1% adjusted EBITDA margin in 2025.

Hong Kong Exchanges and Clearing Ltd (HKEX) is trading 27% above its fair value, according to Morningstar analysts, who maintain a $325 per share valuation against the stock’s current price of $413.80.

Morningstar’s July 7 equity note affirmed HKEX’s “wide moat” due to its unique role as a capital gateway between China and global markets. However, the firm sees high uncertainty around future growth, particularly as escalating China–US trade tensions and newly imposed tariffs from April 2025 begin to weigh on sentiment.

The exchange reported a 30% YoY revenue increase in Q1 2025, with trading volumes up 60% and clearing up 56%. Despite this surge, Morningstar has not revised its full-year forecast, holding to a 12% revenue growth estimate, citing expectations that activity will moderate in the second half.

Financially, HKEX remains strong. It’s forecast to deliver a 69.4% operating margin and a 75.1% adjusted EBITDA margin in 2025, with earnings per share projected at $11.90. Dividend payouts remain high, with a nearly 90% payout ratio and a forecast dividend of $10.65 per share.