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 2018	HKD	USD
Revenue	15,973M	2,038.01M
Gross Profit	--	--
Operating income	10,911M	1,392.14M
Income before tax	10,883M	1,388.57M
Net income	9,312M	1,188.12M
EBITDA	11,673M	1,489.36M
Diluted EPS	7.48	0.95
Dividends Per Share	6.71	0.85
Total Assets	255,948M	32,690.83M
Total liabilities	215,045M	27,466.52M
Total equity	40,729M	5,202.09M
Operating cash flow	8,624M	1,100.34M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 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 2014	Dec 2015	Dec 2016	Dec 2017	Dec 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
PER	30.21
ROA	3.24%
ROE	23.87%
Operating margin	68.30%
Profit margin	58.29%

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

State Street Global Advisors Asia Ltd. (9.1%)
Government of Hong Kong Special Administrative Region (5.9%)
The Vanguard Group, Inc. (2.7%)
Invesco Advisers, Inc. (1.8%)
Baillie Gifford & Co. (1.7%)
BlackRock Fund Advisors (1.6%)
Norges Bank Investment Management (1.4%)
JPMorgan Investment Management, Inc. (1.3%)
Capital Research & Management Co. (Global Investors) (1.0%)
Capital Research & Management Co. (World Investors) (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

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 19 Sep, 2019