* Q3 net up 33 pct to HK$1.27 bln vs forecast HK$1.25 bln

* Q3 average daily turnover up 5 pct yr/yr, down 6.6 pct q/q

* Analysts express concern on competition from China

* Shares trim loss but still down 0.9 pct (Recasts with analyst comment)

By Donny Kwok

HONG KONG, Nov 11 (Reuters) - Hong Kong Exchanges & Clearing (HKEx) (0388.HK: Quote, Profile, Research) faces increasing competition from China, posing a challenge for the world's second-largest listed exchange operator to keep up the momentum on robust third-quarter profits.

Concerns over the longer term competitiveness of the Hong Kong Stock Exchange have grown, with average daily turnover down 6.6 percent in the third quarter from the second quarter. Turnover, though, was up 5 percent year-on year, as the stock market notched a 14 percent gain for the quarter.

"For the time being, Hong Kong is still a prefered listing venue for many major corporations, but in the longer run, Shanghai may take that place," said William Lo, analyst at Ample Finance Group. "Apart from IPOs, we can't see any very strong growth factors that can boost its revenue."

HKEx shares were down 0.92 percent at HK$140.50 in afternoon trade after the results came out, trailing a 1.08 percent gain in the broader market .HSI.