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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 2019 HKDUSD
Revenue16,311M2,081.75M
Gross Profit14,687M1,874.48M
Operating income11,042M1,409.28M
Income before tax10,919M1,393.58M
Net income9,391M1,198.56M
EBITDA12,287M1,568.17M
Diluted EPS7.470.95
Dividends Per Share6.710.85
Total Assets279,051M35,813.41M
Total liabilities234,550M30,102.15M
Total equity44,173M5,669.16M
Operating cash flow28,493M3,636.53M
Currency in HKDCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 12,873M 11,018M 12,443M 15,973M 16,311M
Gross Profit -- -- -- -- 14,687M
Operating income 8,755M 6,809M 8,544M 10,911M 11,042M
Income before tax 9,287M 6,799M 8,610M 10,883M 10,919M
Net income 7,956M 5,769M 7,404M 9,312M 9,391M
EBITDA 9,439M 7,580M 9,402M 11,673M 12,287M
Diluted EPS 6.67 4.75 6.02 7.48 7.47
Dividends Per Share 5.95 4.25 5.40 6.71 6.71
Total Assets 238,193M 247,318M 317,604M 255,948M 279,051M
Total liabilities 208,231M 214,934M 280,229M 215,045M 234,550M
Total equity 29,816M 32,266M 37,273M 40,729M 44,173M
Operating cash flow 8,267M 4,716M 16,777M 8,624M 28,493M
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 1,660.48M 1,419.39M 1,596.72M 2,038.01M 2,081.75M
Gross Profit -- -- -- -- 1,874.48M
Operating income 1,129.30M 877.17M 1,096.39M 1,392.14M 1,409.28M
Income before tax 1,197.92M 875.88M 1,104.86M 1,388.57M 1,393.58M
Net income 1,026.23M 743.19M 950.10M 1,188.12M 1,198.56M
EBITDA 1,217.53M 976.49M 1,206.49M 1,489.36M 1,568.17M
Diluted EPS 0.86 0.61 0.77 0.95 0.95
Dividends Per Share 0.76 0.54 0.69 0.85 0.85
Total Assets 30,733.98M 31,899.03M 40,628.34M 32,690.83M 35,813.41M
Total liabilities 26,867.99M 27,722.15M 35,847.28M 27,466.52M 30,102.15M
Total equity 3,847.15M 4,161.66M 4,768.01M 5,202.09M 5,669.16M
Operating cash flow 1,066.35M 607.53M 2,152.88M 1,100.34M 3,636.53M

Valuation Measures

Dec 2019
PER33.77
ROA3.51%
ROE22.12%
Operating margin67.69%
Profit margin57.57%

Key executives

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

Shareholders

  • Government of Hong Kong Special Administrative Region (6.1%)
  • CHIU ANDREW /EDVANTAGE/ (5.5%)
  • State Street Global Advisors Asia Ltd. (3.0%)
  • The Vanguard Group, Inc. (2.9%)
  • Baillie Gifford & Co. (1.7%)
  • Invesco Advisers, Inc. (1.6%)
  • BlackRock Fund Advisors (1.6%)
  • JPMorgan Investment Management, Inc. (1.5%)
  • Norges Bank Investment Management (1.4%)
  • Capital Research & Management Co. (Global Investors) (1.2%)

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 Information Services Ltd.
  • Hong Kong Exchanges & Clearing Ltd. (Singapore)
  • 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 6 Apr, 2020

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