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Finance

Hong Kong Exchanges & Clearing Ltd.

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; Clearing; and Platform and Infrastructure. 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 Clearing segment provides clearing, settlement, depository, and custody and nominee services. The Platform and Infrastructure segment refers to services in connection with providing users with access to the platform and infrastructure. The company was founded on July 8, 1999 and is headquartered in Hong Kong.

Financial Highlights

Dec 2018 HKDUSD
Revenue15,973M2,038.01M
Gross Profit----
Operating income10,911M1,392.14M
Income before tax10,883M1,388.57M
Net income9,312M1,188.12M
EBITDA11,673M1,489.36M
Diluted EPS7.480.95
Dividends Per Share6.710.85
Total Assets255,948M32,690.83M
Total liabilities215,045M27,466.52M
Total equity40,729M5,202.09M
Operating cash flow8,624M1,100.34M
Currency in HKDCurrency in USD

Historical Data

 Dec 2014Dec 2015Dec 2016Dec 2017Dec 2018
Revenue 9,740M 12,873M 11,018M 12,443M 15,973M
Gross Profit -- -- -- -- --
Operating income 5,972M 8,755M 6,809M 8,544M 10,911M
Income before tax 6,048M 9,287M 6,799M 8,610M 10,883M
Net income 5,165M 7,956M 5,769M 7,404M 9,312M
EBITDA 6,619M 9,439M 7,580M 9,402M 11,673M
Diluted EPS 4.43 6.67 4.75 6.02 7.48
Dividends Per Share 3.98 5.95 4.25 5.40 6.71
Total Assets 251,860M 238,193M 247,318M 317,604M 255,948M
Total liabilities 230,910M 208,231M 214,934M 280,229M 215,045M
Total equity 20,864M 29,816M 32,266M 37,273M 40,729M
Operating cash flow 4,614M 8,267M 4,716M 16,777M 8,624M
 Dec 2014Dec 2015Dec 2016Dec 2017Dec 2018
Revenue 1,256.01M 1,660.48M 1,419.39M 1,596.72M 2,038.01M
Gross Profit -- -- -- -- --
Operating income 770.11M 1,129.30M 877.17M 1,096.39M 1,392.14M
Income before tax 779.91M 1,197.92M 875.88M 1,104.86M 1,388.57M
Net income 666.04M 1,026.23M 743.19M 950.10M 1,188.12M
EBITDA 853.54M 1,217.53M 976.49M 1,206.49M 1,489.36M
Diluted EPS 0.57 0.86 0.61 0.77 0.95
Dividends Per Share 0.51 0.76 0.54 0.69 0.85
Total Assets 32,477.74M 30,733.98M 31,899.03M 40,628.34M 32,690.83M
Total liabilities 29,776.20M 26,867.99M 27,722.15M 35,847.28M 27,466.52M
Total equity 2,690.44M 3,847.15M 4,161.66M 4,768.01M 5,202.09M
Operating cash flow 594.99M 1,066.35M 607.53M 2,152.88M 1,100.34M

Valuation Measures

Dec 2018
PER30.21
ROA3.24%
ROE23.87%
Operating margin68.30%
Profit margin58.29%

Key executives

  • CEO & Executive Director: Xiaojia Li
  • Co-President & Chief Operating Officer: Chi Kin Tai
  • Co-President: Romnesh Lamba
  • Chief Financial Officer: John F. Killian
  • Group Chief Technology Officer: Chung Kwong Leung

Shareholders

  • Government of Hong Kong Special Administrative Region (6.1%)
  • State Street Global Advisors Asia Ltd. (3.0%)
  • The Vanguard Group, Inc. (2.8%)
  • Baillie Gifford & Co. (1.7%)
  • Invesco Advisers, Inc. (1.6%)
  • BlackRock Fund Advisors (1.6%)
  • Norges Bank Investment Management (1.4%)
  • Capital Research & Management Co. (World Investors) (1.2%)
  • JPMorgan Investment Management, Inc. (1.2%)
  • Capital Research & Management Co. (Global Investors) (1.1%)

Contact Details

  • Website:http://www.hkex.com.hk
  • Address: 12th Floor, One International Finance Centre, Hong Kong, Hong Kong
  • Phone: +852.2522.1122

Related Companies

  • HKEX Investment (China) Ltd.
  • HKEX International Ltd.
  • HKEX (China) Ltd.
  • HKEX Property Ltd.
  • HKEX Hosting Services Ltd.
  • Ganghui Financial Information Services (Shanghai) Ltd.
  • OTC Clearing Hong Kong Ltd.
  • SEHK Options Clearing House Ltd.
  • HKFE Clearing Corp. Ltd.
  • Hong Kong Futures Exchange Ltd.
  • Stock Exchange of Hong Kong Ltd.
  • Hong Kong Securities Clearing Co. Ltd.
  • Many Profit Ltd.
  • HKSCC Nominees Ltd.

Competitors

  • Nasdaq, Inc.
  • Moscow Exchange MICEX-RTS PJSC
  • CME Group Inc. Class A
Last Updated on 20 Nov, 2019

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