- 1H21 revenue in line but earnings beat our estimate by 12% on lower operating expenses.
- FICC and DCI grew 17% and 35% YoY, led by newly-acquired businesses, BidFX and Scientific Beta, respectively.
- Average fee per contract for equity derivatives fell from S$1.34 to S$1.27 due to fee holiday during transition from expiring MSCI products to FTSE replacements.
- Laid out pipeline for growth, which includes expanding suite of products with FTSE Russell and developing indices under Scientific Beta to capture new investment trends.
- Maintain ACCUMULATE with higher TP of S$11.01, from S$9.45. FY21e earnings raised by 8% to incorporate full-year expense guidance of S$535-545mn. Now peg our TP at 5-year historical average of 22.3x P/E vs. -1SD previously in view of its stronger growth prospects.