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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; 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 HKDUSD
Revenue20,950M2,695.28M
Gross Profit18,729M2,409.54M
Operating income15,035M1,934.30M
Income before tax14,761M1,899.04M
Net income12,535M1,612.66M
EBITDA16,389M2,108.49M
Diluted EPS9.881.27
Dividends Per Share8.871.14
Total Assets399,304M51,217.11M
Total liabilities349,394M44,815.36M
Total equity49,626M6,365.32M
Operating cash flow32,054M4,123.84M
Currency in HKDCurrency in USD

Historical Data

 Dec 2017Dec 2018Dec 2019Dec 2020Dec 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 2017Dec 2018Dec 2019Dec 2020Dec 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
PER45.97
ROA3.13%
ROE25.44%
Operating margin71.76%
Profit margin59.83%

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

Related Companies

  • Qianhai Mercantile Exchange Co. ,Ltd
  • 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 23 Sep, 2022

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