Hong Kong Exchanges & Clearing Ltd.

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Company Background

Hong Kong Exchanges & Clearing (HKEx) is a global operator of exchanges and clearing houses, one of the world's largest exchange groups by market capitalization. It operates the stock market, futures market and four clearing houses through its subsidiaries in the region. The bourse has been around 6% owned by the Hong Kong government.

The company also has expanded its commodities trading business. In 2012, it acquired the London Metal Exchange, one of the world's leading industrial metals exchanges. The LME business contributes about 20% to HKEx's overall revenue. HKEx seeks to create a commodities trading scheme with mainland China and London, aiming to promote investor convenience in the major metals market and to increase income from trading fees.

Charles Li Xiaojia became CEO of HKEx in 2010. Li is boosting the group's global competitiveness through strengthening partnerships with mainland China markets. HKEx has partnered with the Shanghai Stock Exchange and the Shenzhen Stock Exchange on the China Exchanges Services Co., which is to develop cross-border indexes based on products traded on these markets. It also opened the stock connection with Shanghai in November 2014. HKEx in June 2015 approved a new three-year term for Li, until October 2018.

Business Summary

Hong Kong Exchanges & Clearing Ltd. engages in the operation of stock and futures markets. It operates though the following segments: Cash; Equity and Financial Derivatives; Commodities; Post Trade, Technology, Corporate Items, and Group. The Cash segment covers equity products traded on the Cash Market platforms and Shanghai Stock Exchange. The Equity and Financial Derivatives segment includes derivatives products traded on Hong Kong Futures Exchange Limited and the Stock Exchange, and other related activities. The Commodities segment operates an exchange in the United Kingdom for the trading of base metals futures and options contracts. The Post Trade segment refers to the operations of the five clearing houses. The Technology segment consists of all services in connection with providing users with access to the platform and infrastructure of the group. The Corporate Items segment represents the central income and central costs. The company was founded on July 8, 1999 and is headquartered in Hong Kong.

Financial Highlights

Dec 2021	HKD	USD
Revenue	20,950M	2,695.28M
Gross Profit	18,729M	2,409.54M
Operating income	15,035M	1,934.30M
Income before tax	14,761M	1,899.04M
Net income	12,535M	1,612.66M
EBITDA	16,389M	2,108.49M
Diluted EPS	9.88	1.27
Dividends Per Share	8.87	1.14
Total Assets	399,304M	51,217.11M
Total liabilities	349,394M	44,815.36M
Total equity	49,626M	6,365.32M
Operating cash flow	32,054M	4,123.84M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	12,443M	15,973M	16,311M	18,703M	20,950M
Gross Profit	--	--	14,687M	16,761M	18,729M
Operating income	8,544M	10,911M	11,042M	13,570M	15,035M
Income before tax	8,610M	10,883M	10,919M	13,263M	14,761M
Net income	7,404M	9,312M	9,391M	11,505M	12,535M
EBITDA	9,402M	11,673M	12,287M	14,767M	16,389M
Diluted EPS	6.02	7.48	7.47	9.08	9.88
Dividends Per Share	5.40	6.71	6.71	8.17	8.87
Total Assets	317,604M	255,948M	279,051M	399,106M	399,304M
Total liabilities	280,229M	215,045M	234,550M	349,870M	349,394M
Total equity	37,273M	40,729M	44,173M	48,918M	49,626M
Operating cash flow	16,777M	8,624M	28,493M	61,539M	32,054M

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	1,596.72M	2,038.01M	2,081.75M	2,411.42M	2,695.28M
Gross Profit	--	--	1,874.48M	2,161.03M	2,409.54M
Operating income	1,096.39M	1,392.14M	1,409.28M	1,749.61M	1,934.30M
Income before tax	1,104.86M	1,388.57M	1,393.58M	1,710.03M	1,899.04M
Net income	950.10M	1,188.12M	1,198.56M	1,483.36M	1,612.66M
EBITDA	1,206.49M	1,489.36M	1,568.17M	1,903.94M	2,108.49M
Diluted EPS	0.77	0.95	0.95	1.17	1.27
Dividends Per Share	0.69	0.85	0.85	1.05	1.14
Total Assets	40,628.34M	32,690.83M	35,813.41M	51,471.98M	51,217.11M
Total liabilities	35,847.28M	27,466.52M	30,102.15M	45,122.10M	44,815.36M
Total equity	4,768.01M	5,202.09M	5,669.16M	6,308.86M	6,365.32M
Operating cash flow	2,152.88M	1,100.34M	3,636.53M	7,934.37M	4,123.84M

Valuation Measures

Dec 2021
PER	45.97
ROA	3.13%
ROE	25.44%
Operating margin	71.76%
Profit margin	59.83%

Key executives

Chief Executive Officer & Executive Director: Alejandro Nicolas Aguzin
Co-Chief Operating Officer: Ka Yan Yiu
Co-Chief Operating Officer: John Leo Buckley
Group Chief Financial Officer: Bik Yun Lau
Group Chief Technology Officer: Chung Kwong Leung

Shareholders

Government of Hong Kong Special Administrative Region (5.9%)
E Fund Management Co., Ltd. (2.5%)
The Vanguard Group, Inc. (2.4%)
BlackRock Fund Advisors (1.7%)
Norges Bank Investment Management (1.7%)
JPMorgan Investment Management, Inc. (1.4%)
Capital Research & Management Co. (World Investors) (1.2%)
Baillie Gifford & Co. (1.0%)
State Street Global Advisors Asia Ltd. (0.9%)
UBS Asset Management (Hong Kong) Ltd. (0.9%)

Contact Details

Website:http://www.hkex.com.hk
Address: 8/F, Two Exchange Square, 8 Connaught Place, Hong Kong, Hong Kong
Phone: +852.2522.1122

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Competitors

Nasdaq, Inc.
Public Joint Stock Company Moscow Exchange MICEX-RTS
CME Group Inc. Class A
PT Telkom Indonesia (Persero) Tbk Class B

Last Updated on 23 Sep, 2022