Bank of America Merrill Lynch lowered the target price of the Hong Kong Stock Exchange to 302 yuan
Bank of America Merrill Lynch said that the bank has always judged the participation of investors in Hong Kong stocks by annualized daily turnover and market size. The average transaction circulation rate in the past eight years is about 75%, and a standard deviation is about 18 percentage points. It is generally stable, so the bank believes that relevant indicators can be used to judge short-term market trends. Bank of America Merrill Lynch pointed out that the current trading circulation rate is 58%. Although it has not yet reached the bottom, the bank believes that it will be close to the bottom. If the average daily turnover of Hong Kong stocks continues to be below 70 billion yuan in the next 5-7 days, the market size Generally maintained, it is estimated that the market will bottom out at the end of July and the market will rebound.
The bank pointed out that the second quarter revenue of the HKEx (388) was disappointing, mainly because the Hong Kong stocks traded quieter than expected in the second quarter of this year, down 8% quarter-to-quarter, while the average daily turnover fell from 910 billion yuan in the first quarter to 950. In addition, the Hong Kong Stock Exchange has a strong investment income in the first quarter. It is expected that the relevant income will decrease rapidly. The profit of the 2019-2021 will be lowered by 5% to 9%, and the target price will drop by 2% from 307 yuan to 302 yuan. Reiterating the “Buy" rating, it is still optimistic about the medium-term growth of the HKEx and the role played by the development of the capital market in the Mainland.