Goldman Sachs has issued a research report reiterating its 'Buy' rating on Hong Kong Exchanges and Clearing Ltd (HKEX) and maintaining a price target of HK$540.

The stock of HKEX has declined approximately 6% year-to-date, largely mirroring the 5% drop in the Hang Seng Index. This performance reflects investor concerns over near-term profit growth and the quality of companies in the IPO pipeline.

The current share price implies a forward price-to-earnings ratio of 25 times for the 2027 fiscal year, which is below the historical average of 34 times. This valuation is seen as presenting an attractive entry point for investors.

The report highlights that the China Securities Regulatory Commission has reaffirmed its support for launching offshore Chinese government bond futures. Goldman Sachs views this as another crucial step in developing China's interest rate derivatives market and a potential catalyst for increased foreign participation.

For HKEX, the firm believes this initiative could unlock both revenue growth opportunities and diversification benefits.

Based on projections for the 2025 fiscal year, the bank estimates that if foreign participation in this market rises from 2% to 10%, coupled with an increase in derivatives market penetration from 1% to 10%, it could generate approximately HK$3.6 billion in additional revenue for HKEX. This figure represents roughly 12% of the exchange's projected revenue for the 2025 fiscal year.