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; 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 2020	HKD	USD
Revenue	19,190M	2,474.21M
Gross Profit	17,248M	2,223.82M
Operating income	13,570M	1,749.61M
Income before tax	13,263M	1,710.03M
Net income	11,505M	1,483.36M
EBITDA	14,767M	1,903.94M
Diluted EPS	9.08	1.17
Dividends Per Share	8.17	1.05
Total Assets	399,106M	51,471.98M
Total liabilities	349,870M	45,122.10M
Total equity	48,918M	6,308.86M
Operating cash flow	61,539M	7,934.37M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020
Revenue	11,018M	12,443M	15,973M	16,311M	19,190M
Gross Profit	--	--	--	14,687M	17,248M
Operating income	6,809M	8,544M	10,911M	11,042M	13,570M
Income before tax	6,799M	8,610M	10,883M	10,919M	13,263M
Net income	5,769M	7,404M	9,312M	9,391M	11,505M
EBITDA	7,580M	9,402M	11,673M	12,287M	14,767M
Diluted EPS	4.75	6.02	7.48	7.47	9.08
Dividends Per Share	4.25	5.40	6.71	6.71	8.17
Total Assets	247,318M	317,604M	255,948M	279,051M	399,106M
Total liabilities	214,934M	280,229M	215,045M	234,550M	349,870M
Total equity	32,266M	37,273M	40,729M	44,173M	48,918M
Operating cash flow	4,716M	16,777M	8,624M	28,493M	61,539M

	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020
Revenue	1,419.39M	1,596.72M	2,038.01M	2,081.75M	2,474.21M
Gross Profit	--	--	--	1,874.48M	2,223.82M
Operating income	877.17M	1,096.39M	1,392.14M	1,409.28M	1,749.61M
Income before tax	875.88M	1,104.86M	1,388.57M	1,393.58M	1,710.03M
Net income	743.19M	950.10M	1,188.12M	1,198.56M	1,483.36M
EBITDA	976.49M	1,206.49M	1,489.36M	1,568.17M	1,903.94M
Diluted EPS	0.61	0.77	0.95	0.95	1.17
Dividends Per Share	0.54	0.69	0.85	0.85	1.05
Total Assets	31,899.03M	40,628.34M	32,690.83M	35,813.41M	51,471.98M
Total liabilities	27,722.15M	35,847.28M	27,466.52M	30,102.15M	45,122.10M
Total equity	4,161.66M	4,768.01M	5,202.09M	5,669.16M	6,308.86M
Operating cash flow	607.53M	2,152.88M	1,100.34M	3,636.53M	7,934.37M

Valuation Measures

Dec 2020
PER	46.64
ROA	3.39%
ROE	24.71%
Operating margin	70.71%
Profit margin	59.95%

Key executives

Chief Executive Officer & Director: Alejandro Nicolas Aguzin
Co-President, COO & Executive Director: Chi Kin Tai
Co-President: Romnesh Lamba
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. (2.8%)
The Vanguard Group, Inc. (2.3%)
BlackRock Fund Advisors (1.7%)
Norges Bank Investment Management (1.6%)
JPMorgan Investment Management, Inc. (1.6%)
Capital Research & Management Co. (World Investors) (1.4%)
Baillie Gifford & Co. (1.0%)
Capital Research & Management Co. (Global Investors) (1.0%)
UBS Asset Management (Hong Kong) Ltd. (0.9%)

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

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

Last Updated on 29 Nov, 2021