HKEX (SEHK:388) Margins At 62.5% Reinforce Bullish Profitability Narratives

Hong Kong Exchanges and Clearing (SEHK:388) opened 2026 with Q1 revenue of HK$8.2 billion and basic EPS of HK$4.10, setting a clear marker for how its earnings power is tracking against recent history. The company has seen quarterly revenue move from HK$6.3 billion in Q4 2024 to HK$8.2 billion in Q1 2026, while basic EPS has shifted from HK$2.99 to HK$4.10 over the same stretch, supported by trailing twelve month net income of HK$18.9 billion and a net margin of 62.5% that keeps profitability firmly in focus for investors watching how these results underpin the longer term earnings story.

See our full analysis for Hong Kong Exchanges and Clearing.

With the latest numbers on the table, the next step is to see how this earnings profile lines up with the main Hong Kong Exchanges and Clearing narratives that investors tend to follow and where the figures start to challenge those stories.

See what the community is saying about Hong Kong Exchanges and Clearing

TTM earnings growth runs at 33.3%

• Trailing twelve month net income sits at HK$18.9b, with TTM EPS at HK$14.92 compared with a five year earnings growth rate of 8.1% per year and 33.3% TTM earnings growth.
• Consensus narrative points to Hong Kong Exchanges and Clearing benefiting from Asia's growth and product expansion, and the current 33.3% TTM earnings growth against 8.1% per year over five years gives some support to that view. The more modest 3.3% annual revenue growth in the data shows the recent strength is not only about top line expansion.
  • Record style TTM revenue of HK$30.2b compared with HK$22.3b a year earlier coincides with a net margin of 62.5% versus 59.2% in the prior year, which fits the idea of higher margin activity contributing meaningfully to profit.
  • At the same time, revenue is forecast at roughly 3.3% growth per year and earnings around 4.2% per year, so the recent 33.3% earnings growth is much stronger than what is built into those forward looking assumptions.

Margins stay high at 62.5%

• Net margin on a trailing basis is 62.5%, up from 59.2% a year earlier, supported by HK$18.9b of TTM net income on HK$30.2b of TTM revenue.
• Bulls argue that new data products, Connect programs and derivatives can widen margins over time, and the move from 59.2% to 62.5% net margin alongside quarterly net income rising from HK$3.8b in Q4 2024 to HK$5.2b in Q1 2026 leans in their favour, even though bullish revenue growth assumptions of 12% per year are well above the 3.3% rate in the trailing figures.
  • The bullish view expects earnings to reach HK$19.9b by around 2028 compared with HK$14.2b in the narrative today, while the latest TTM earnings in the dataset are already HK$18.9b, so current profitability is close to those future numbers even before the timeline in that scenario.
  • That same bullish case relies on an eventual 59.4% margin in three years, which is actually lower than the current 62.5%, so the margin trend in the recent data provides a cushion against that assumption rather than needing further margin expansion to get there.

Want to see how supporters of the bullish view connect these earnings and margin figures to their long term story for HKEX 🐂 Hong Kong Exchanges and Clearing Bull Case

P/E premium and DCF gap stand out

• The shares trade at a trailing P/E of 27.6x versus a peer average of 19.1x and a Hong Kong capital markets industry average of 15x, while the current price of HK$412.40 sits above a DCF fair value of HK$296.43 and below an analyst consensus target of HK$517.35.
• Bears highlight that slower forecast revenue growth of about 3.3% per year and earnings growth of roughly 4.2% per year, both below broader market expectations, make the 27.6x P/E and the premium to the HK$296.43 DCF fair value hard to justify, especially with an unstable dividend track record in the data.
  • The need for a 41.2x P/E in 2029 in the consensus narrative to reach the HK$517.35 target price would represent a sizeable step up from the current 27.6x even though growth forecasts are in the mid single digits, which lines up with cautious views around valuation.
  • With the stock already trading above the DCF fair value but below the HK$517.35 target, investors are effectively weighing the 62.5% margin and 33.3% TTM earnings growth against the risk that slower forecast growth and dividend instability do not support such a premium over time.

If you are weighing the cautious arguments about growth and valuation against the premium multiples, it helps to see how skeptics frame the full bear case in one place 🐻 Hong Kong Exchanges and Clearing Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Hong Kong Exchanges and Clearing on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With bulls pointing to strong margins and bears focusing on valuation and growth assumptions, it is worth taking a closer look at the underlying data yourself and deciding how much weight to put on each side of the story. To move quickly from headline numbers to a more rounded picture of risk and reward, start with the 3 key rewards and 1 important warning sign.

See What Else Is Out There

HKEX combines strong margins with a P/E premium over peers, while its forecasts point to mid single digit growth and an unstable dividend track record.

If that mix of slower projected growth and uneven income stream feels uncomfortable, you may want to balance it by checking out 481 dividend fortresses for ideas that may offer a more consistent payout profile.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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