Financial Data and Key Metrics Changes - In Q1 2022, revenues were HKD 4.7 billion, down 1% from Q4 2021 and 21% lower year-on-year [6][12] - Profit remained broadly flat at HKD 2.7 billion compared to Q4 2021 but was down 31% year-on-year [6][12] - Core business revenue, excluding net investment income, was HKD 4.8 billion, up 7% against Q4 but down 16% versus the record Q1 last year [11][12] - EBITDA was HKD 3.5 billion, down 28% year-on-year [14] Business Line Data and Key Metrics Changes - Cash and derivatives business showed resilience despite weak market sentiment, with stock Connect ADT rising 27% from the previous quarter [6][7] - Bond Connect ADT reached a record quarterly high [7] - Trading volumes on the Hong Kong Futures Exchange and the LME saw solid growth, particularly in newer products like Hang Seng TECH Index Futures [13] Market Data and Key Metrics Changes - Hong Kong's IPO market was impacted by the macro environment, but the pipeline remained strong with over 150 active applications, including 10 SPAC applications [8][25] - Average daily trading (ADT) in cash markets rose 16% from the preceding quarter [23] Company Strategy and Development Direction - The company aims to build the marketplace of the future, focusing on three strategic imperatives: connecting China and the world, connecting capital with opportunities, and connecting today with tomorrow [29][30][32] - New initiatives include launching thematic ETFs and modernizing operations and infrastructure [26][28] - The company is committed to sustainability, with an increase in green and ESG-related bond listings [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing market volatility and geopolitical fragility but expressed confidence in the company's strong fundamentals and clear strategy [22][35] - The gradual relaxation of pandemic-related restrictions globally is seen as a cautious optimism for future performance [35] Other Important Information - The company is focused on enhancing its product ecosystem and exploring new opportunities in collaboration with Mainland partners [41][75] - The company plans to continue investing in technology, talent, and risk management to support its strategic initiatives [20][36] Q&A Session Summary Question: Insights from the trip to Mainland China and product ecosystem priorities - Management emphasized the importance of Hong Kong as a connector to global markets and discussed ongoing initiatives like ETF Connect [42][43] Question: Sustainability of margin funds AUM increase - Management indicated that the increase in margin funds AUM is linked to trading volumes and volatility, with rising interest rates expected to benefit investment income [40][46] Question: Economics behind SPAC listings - Management explained that SPACs provide an alternative market access method, with listing fees and trading activity expected to increase post-de-SPAC transaction [52][55] Question: IPO pipeline outlook - Management noted the IPO pipeline has grown to around 180 applications, with varying timelines for companies to access the market [60][62] Question: Earnings volatility reduction plans - Management acknowledged the need for stability in revenue streams and highlighted the success of new derivative products in generating activity [80]

Financial Performance - In Q1 2022, the company's revenue and other income amounted to HKD 4.69 billion, a decrease of 21% compared to Q1 2021's record high of HKD 5.96 billion[6]. - The company reported a net investment loss of HKD 104 million in Q1 2022, compared to a gain of HKD 219 million in Q1 2021, reflecting a significant decline in global stock and fixed income market valuations[7]. - The company’s net profit attributable to shareholders was HKD 2.67 billion, a decrease of 31% compared to HKD 3.84 billion in Q1 2021[7]. - Total revenue and other income for Q1 2022 was HKD 4.69 billion, a decrease of 21% compared to Q1 2021, primarily due to reduced trading and settlement fees[11]. - The stock trading segment reported a revenue decline of 24% and EBITDA decline of 27% compared to Q1 2021[13]. - Revenue decreased by 9% to 978 million compared to Q1 2021, with EBITDA margin down 12% to 79%[18]. - The operating profit for Q1 2022 was HKD 3,119 million, down 30.5% from HKD 4,482 million in Q1 2021[51]. - Basic earnings per share for Q1 2022 were HKD 2.11, compared to HKD 3.03 in Q1 2021, reflecting a decline of 30.4%[51]. - The total comprehensive income for the three months ended March 31, 2022, was HKD 2,617 million, compared to HKD 3,872 million for the same period in 2021, representing a decrease of approximately 32.4%[52]. Trading Activity - The average daily trading amount for equity securities products was HKD 126 billion, down 36% from HKD 198 billion in the same period last year[9]. - The average daily trading value was HKD 146.5 billion, down 35% from Q1 2021 but up 16% from Q4 2021[11]. - The average daily trading amount for the Stock Connect program was RMB 105.9 billion, a decrease of 16% from RMB 126.8 billion in the previous year[9]. - The average daily trading amount in the Hong Kong stock market increased by 16% to HKD 146.5 billion compared to Q4 2021, but decreased by 35% compared to Q1 2021[14]. - The average daily trading volume of derivative contracts in Q1 2022 was 1,339,149 contracts, a 5% decrease year-on-year[19]. - The average daily trading volume of the Hang Seng Tech Index futures reached 52,944 contracts in Q1 2022, over 8 times the figure from Q1 2021[24]. - The average daily trading volume of currency derivatives, specifically USD/CNY futures, increased by 33% to 9,349 contracts in Q1 2022[24]. - The average daily turnover of structured products in Q1 2022 was HKD 20.5 billion, a decrease of 22% compared to Q1 2021, while the number of new listed structured products was 15,573, down 12%[25]. Market Developments - The number of new IPO applications in Hong Kong reached over 150 as of March 31, 2022, including 10 SPAC applications[5]. - The company launched several new products in Q1 2022, including the first metaverse-themed ETF and the first carbon futures ETF[5]. - The total fundraising amount from newly listed companies in Hong Kong in Q1 2022 was HKD 14.9 billion, a decrease of 89% compared to Q1 2021[14]. - The company aims to strengthen Hong Kong's position as an international financial center and enhance market diversity[11]. - The Hong Kong Stock Exchange plans to launch a new investor relations network platform, IR Connect, in Q3 2022 to enhance communication between issuers and global investors[15]. - The Hong Kong Stock Exchange continues to explore opportunities in digital finance and sustainable development, including partnerships in carbon finance and green bond projects[16]. Operating Expenses - Operating expenses increased by 7% year-on-year to HKD 1.18 billion, driven by higher employee and promotional costs[7]. - Operating expenses rose by 7% compared to Q1 2021, attributed to increased employee costs and cash incentives for new product promotions[11]. - Operating expenses increased by 6% due to cash incentives related to new products[18]. - The group's operating expenses for Q1 2022 totaled HKD 1,178 million, an increase from HKD 1,102 million in Q1 2021[51]. Investment and Assets - The investment in collective investment plans as of March 31, 2022, was 86 billion, a decrease of 2% from December 31, 2021[43]. - The group's capital expenditure for Q1 2022 was HKD 190 million, down from HKD 331 million in Q1 2021, primarily related to the development and enhancement of various trading and settlement systems[48]. - The group's total assets pledged as non-cash collateral amounted to USD 3.499 billion (HKD 274.02 billion) as of March 31, 2022, significantly up from USD 971 million (HKD 75.70 billion) on December 31, 2021[49]. - Cash and cash equivalents increased to HKD 264,525 million as of March 31, 2022, up from HKD 181,361 million as of December 31, 2021, reflecting a growth of approximately 46%[53]. - Total assets reached HKD 622,723 million as of March 31, 2022, compared to HKD 399,304 million as of December 31, 2021, indicating an increase of approximately 56%[53]. - Total liabilities amounted to HKD 575,416 million as of March 31, 2022, up from HKD 349,394 million as of December 31, 2021, which is an increase of approximately 64.7%[53]. Regulatory and Strategic Initiatives - The group has committed to promoting sustainable and green finance through the STAGE platform, enhancing communication with stakeholders[46]. - The group continues to monitor global geopolitical risks and their potential impacts on business continuity and regulatory assessments[46]. - The company adopted new/revised HKFRSs in 2022, which did not have any financial impact on the group[54]. - The estimated useful life of certain computer hardware and software was changed from three years to three to five years, resulting in a reduction of depreciation expense by HKD 8 million for the first quarter of 2022[54].

Financial Performance - In 2021, Hong Kong Exchanges and Clearing Limited (HKEX) achieved record high revenue and profit despite challenging macroeconomic conditions and ongoing pandemic impacts [4]. - Revenue and other income for 2021 reached HKD 20,950 million, an increase of 9% compared to 2020 [10]. - Main business revenue rose by 10% to HKD 20,103 million, driven by record average daily trading volumes [10]. - EBITDA for 2021 was HKD 16,269 million, reflecting an 11% increase from 2020, with an EBITDA margin of 78% [10]. - Shareholders' profit attributable increased by 9% to HKD 12,535 million, marking a new high [10]. - The total revenue and other income for the group reached HKD 21 billion in 2021, an increase of 9% compared to 2020, leading to a record profit attributable to shareholders of HKD 12.5 billion, also up by 9% [19]. - The company reported a significant increase in revenue, achieving a total of $1.5 billion, representing a 20% year-over-year growth [46]. - The company reported a significant increase in revenue, achieving a total of $1.2 billion, representing a 15% year-over-year growth [51]. - Total revenue and other income amounted to HKD 3,436 million in 2021, reflecting a 6% increase from HKD 3,241 million in 2020 [96]. - Total revenue for 2021 reached 20,950 million, an increase of 9.2% from 19,190 million in 2020 [185]. Trading Volume and Market Activity - The trading volume for the cash market, Stock Connect, and Bond Connect reached new highs, offsetting the impact of low interest rates on investment income [4]. - The average daily trading volume in the cash market increased significantly, contributing to overall revenue growth [4]. - Average daily turnover of equity securities on the exchange reached HKD 146.6 billion, a 32% increase from 2020 [11]. - The average daily turnover of the Stock Connect program reached HKD 120.1 billion, up 32% year-on-year [11]. - In 2021, the average daily trading volume reached HKD 166.7 billion, a 29% increase from 2020, setting a new record [28]. - The average daily trading volume for bond connect Northbound reached RMB 26.6 billion, a 34% increase from 2020 [28]. - The average daily trading volume of Hong Kong stock ETFs nearly doubled from HKD 2.8 billion in 2020 to HKD 5.4 billion in 2021 [37]. - The average daily trading volume of ETPs (including ETFs and leveraged and inverse products) increased by 20% to HKD 7.7 billion in 2021, compared to HKD 6.4 billion in 2020 [37]. - The average daily trading volume of derivatives contracts increased by 26% in 2021 compared to 2020 [68]. - The average daily trading amount for stock products reached 166.7 billion HKD in 2021, a 29% increase compared to 2020 [77]. Product Development and Innovation - HKEX received numerous listing applications and launched new listing regimes for Special Purpose Acquisition Companies (SPACs) and overseas issuers, enhancing its product offerings [4]. - HKEX introduced various new products, including Hang Seng Tech Index options and new cash-settled futures contracts on LME, to diversify its offerings [6]. - The company launched the first A-share derivative product, the MSCI China A50 Connect Index Futures, enhancing product offerings in the market [18]. - The company plans to introduce non-HKD denominated futures and options trading and settlement services during public holidays in 2022 [22]. - The launch of the MSCI China A50 Connect Index Futures in October 2021 expanded the Chinese A-share ecosystem in Hong Kong, with significant market response on its first trading day [32]. - The company continues to focus on market connectivity and product innovation to maintain its competitive position in the global capital markets [18]. - The Hong Kong Stock Exchange has expanded its product ecosystem, including the introduction of new MSCI China A50 index futures and small USD/CNY futures contracts [33]. - The launch of the new FINI platform in Q4 2022 is expected to simplify and digitize the IPO settlement process, improving the situation of large amounts of pre-paid funds being frozen during subscription periods [38]. Sustainability and Corporate Social Responsibility - The company is committed to achieving net-zero emissions by 2050 and has joined the Glasgow Financial Alliance for Net Zero [8]. - HKEX launched the ESG Academy and various community projects to enhance its corporate social responsibility initiatives [8]. - The company joined the Glasgow Financial Alliance for Net Zero and the Net Zero Financial Service Providers Alliance, committing to sustainable development goals [21]. - The Hong Kong Stock Exchange Charity Fund raised HKD 139 million in 2021 to support various community projects and charities [23]. - The company published the "Net Zero Emissions Guide" to assist issuers and other businesses in their journey towards net-zero emissions [38]. - The company is committed to expanding its sustainable finance ecosystem, with continuous growth in the number of GSS bonds listed [38]. - The total issuance of green/ESG-related bonds reached HKD 282.6 billion in 2021, compared to HKD 66.7 billion in 2020 [81]. - The Sustainable and Green Exchange (STAGE) had 87 products focused on sustainability by December 31, 2021, reflecting strong market support since its establishment [82]. Governance and Management - The board consists of 13 directors, with 12 being independent directors and 4 being female, aiming for gender equality [188]. - The board and committees held a total of 48 meetings in 2021, demonstrating active governance practices [188]. - The company adhered to all provisions of the Corporate Governance Code effective during 2021, with specific exceptions noted [189]. - The board's composition includes a diverse range of skills and experiences, enhancing its effectiveness and efficiency [195]. - The company emphasizes the importance of good governance and effective board performance for overall corporate health [198]. - The establishment of the International Advisory Committee and the China Business Advisory Committee aims to enhance the board's insights on global and Chinese financial markets [199]. - An internal review of the board's performance was conducted in 2021, with results indicating effective operation and good governance across various committees [200]. Future Outlook and Strategic Initiatives - The company is focused on expanding its role as a "super connector" in the rapidly evolving global capital markets [4]. - The company plans to leverage its position as a "super connector" to participate in technology and industry development opportunities in the future [66]. - The company is expanding its market presence in Asia, targeting a 30% increase in market share by the end of the year [46]. - The company is exploring potential acquisitions to enhance its product offerings, with a budget of $500 million allocated for this purpose [48]. - A new strategic partnership has been established, expected to generate $200 million in additional revenue streams [49]. - The company has set a future outlook with a revenue guidance of $6 billion for the upcoming fiscal year, indicating a growth of 20% [55]. - The company plans to increase its workforce by 10% to support growth initiatives and new projects [55]. - The management team emphasized the importance of risk management, with a focus on mitigating potential market volatility impacts [61].

2020 Annual Results Analyst Presentation Calvin Tai Interim Chief Executive, HKEX Group Romnesh Lamba Co-President, HKEX Group Vanessa Lau Group Chief Financial Officer, HKEX Group 24 February 2021 Disclaimer The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or service of any kind. This document is ...

Financial Performance - The company reported total revenue and other income of $19.19 billion, an increase of 18% year-on-year, with core business revenue up by 24% driven by trading and clearing fees in the cash market [6][13] - Profit attributable to shareholders reached a record high of $11.5 billion, up 23% year-on-year, with earnings per share (EPS) and dividend per share also at record levels, both up 22% from 2019 [7][13] - Net investment income decreased by 18% to $2.2 billion compared to $2.7 billion in 2019, reflecting a challenging investment backdrop [7][21] Business Segment Performance - The IPO market remained strong, with the company ranking second globally, raising HKD 400 billion (approximately $50 billion), the highest in the last decade [8][34] - Stock Connect revenue reached a new record high of $1.9 billion, contributing to 10% of the total revenue, with both Northbound and Southbound average daily turnover (ADT) more than doubling compared to 2019 [19][20] - Listing fees increased by 16% with 154 new company listings in 2020, while corporate items were down due to lower net investment income [20] Market Data - The company experienced record average daily turnover (ADT) of $129.5 billion, reflecting strong market activity [13] - The Southbound Stock Connect has shown significant growth, contributing to liquidity in the market [66][71] Company Strategy and Industry Competition - The company aims to leverage the emerging new economy sector, focusing on tech and biotech stocks, which have become increasingly significant in the market [27][30] - The company is expanding its Stock Connect program and enhancing its product ecosystem, including the introduction of MSCI contracts to establish itself as a risk management center for the region [40][41] - The company is also focusing on sustainable finance, having launched the first multi-asset sustainable investment product platform in Asia [45][46] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the strong IPO pipeline and anticipated a busy year ahead, despite potential challenges from the low interest rate environment [48][50] - The management acknowledged the impact of the recent stamp duty increase but emphasized the overall robustness of the market and the need for a comprehensive approach to maintain competitiveness [56][60] Other Important Information - The company has made significant investments in talent and technology to support growth and operational resilience, with operating expenses up 8% excluding charitable donations [23][94] - The company is working on initiatives such as ETF Connect and Asia Index Futures to enhance its offerings and meet market demand [88] Q&A Session Summary Question: Insights on the recent stamp duty tax hike - Management was not consulted regarding the stamp duty change and expressed disappointment, noting that the market's robustness is driven by various factors beyond costs [56][58] Question: Potential for further stamp duty changes - Management could not speculate on whether the stamp duty change would be one-off or if further hikes might occur, emphasizing the need to focus on current market conditions [63][65] Question: Breakdown of strong trading volumes - Management indicated that approximately 25% of the strong trading volumes are driven by new economy stocks, with overall positive market sentiment contributing to the increase [66][67] Question: Plans to mitigate the impact of increased costs - Management highlighted that while transaction costs are significant, improvements in market efficiency and execution certainty have been made, which may help cushion the impact [76][78] Question: Impact of stamp duty on investor behavior - Management believes that the recent changes will not significantly alter investor behavior, as many investors prefer trading in Hong Kong for time zone advantages [80][82] Question: Update on Southbound Stock Connect and related initiatives - Management confirmed ongoing work on initiatives like ETF Connect and Asia Index Futures, with no specific timetable yet available [88][89]