证券研究报告·公司点评报告·其他金融(HS) 香港交易所（00388.HK） 2023 年年报点评：业绩韧性持续彰显，内外 2024年 02月 29 日 环境同现升势 证券分析师 胡翔 买入（维持） 执业证书：S0600516110001 021-60199793 盈[T 利ab 预le_ 测EP 与S 估] 值 2022A 2023A 2024E 2025E 2026E hux@dwzq.com.cn 证券分析师 葛玉翔 营业总收入（百万港元） 18,456 20,516 21,691 23,250 24,646 执业证书：S0600522040002 同比 -11.90% 11.16% 5.73% 7.18% 6.00% 021-60199761 归母净利润（百万港元） 10,078 11,862 12,124 13,163 14,133 geyx@dwzq.com.cn 同比 -19.60% 17.70% 2.21% 8.57% 7.37% 研究助理 罗宇康 EPS-最新摊薄（港元/股） 7.95 9.36 9.56 10.38 11.15 执业证书：S0600123090002 P/E（现价&最新摊薄 ...

Investment Rating - The report maintains a "Buy" recommendation for Hong Kong Exchanges and Clearing Limited (0388.HK) [2][7] Core Views - The company's annual performance demonstrates resilience, with total revenue of HKD 20.516 billion, a year-on-year increase of 11.16%, and a net profit attributable to shareholders of HKD 11.862 billion, up 17.70% year-on-year [4][5] - Despite a challenging trading environment, high interest rates have boosted investment income, leading to a significant increase in net investment income by 266% year-on-year to HKD 49.6 billion [7] - The report highlights ongoing reforms and innovations within the company, which are expected to enhance its long-term growth potential [7] Summary by Sections Financial Performance - Total revenue for the year reached HKD 20.516 billion, with a year-on-year growth of 11.16% - Net profit attributable to shareholders was HKD 11.862 billion, reflecting a year-on-year increase of 17.70% - The return on equity (ROE) for the year was 23.5%, an increase of 3.2 percentage points year-on-year [4][6] Revenue Breakdown - Revenue from trading fees decreased by 11%, while investment income surged by 266%, indicating a shift in revenue structure towards stronger investment performance [5][7] - The average daily trading volume for the year was HKD 1,050 billion, down 16% year-on-year, with a notable decline in IPO activities [5][7] Future Outlook - The report anticipates that if the Federal Reserve enters a rate-cutting cycle, it could alleviate liquidity pressures in the Hong Kong market, potentially improving trading volumes and related revenues [7] - The company is expected to continue benefiting from its role as a key financial infrastructure connecting domestic and global markets, with ongoing reforms aimed at attracting more listings and investments [7]

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited is "Buy" (maintained) [3][9]. Core Views - The company's performance in 2023 was supported by investment activities, with derivatives, ETPs, and the LME market showing resilience. The total revenue and net profit for 2023 were HKD 20.52 billion and HKD 11.86 billion, respectively, representing year-on-year increases of 11% and 18% [4][5]. - The report anticipates a continued positive growth trajectory for the company, driven by strategic initiatives and market conditions, despite adjusting profit forecasts for 2024-2025 due to market uncertainties [4][5]. Financial Summary - Revenue and net profit for 2023 were HKD 20.52 billion and HKD 11.86 billion, respectively, with EBITDA margin at 73% and ROE at 23.5% [4]. - The company’s investment income surged by 266% year-on-year to HKD 4.96 billion, benefiting from the Federal Reserve's interest rate hikes [4]. - The forecast for net profit in 2024 and 2025 is adjusted to HKD 12.61 billion and HKD 13.56 billion, respectively, with corresponding EPS of HKD 9.9 and HKD 10.7 [4][5]. Market Performance - The current stock price is HKD 242.80, with a market capitalization of HKD 307.83 billion. The stock has seen a trading range of HKD 354.40 to HKD 219.40 over the past year [3]. - The trading volume over the last three months has a turnover rate of 23.17% [3]. Strategic Outlook - The report highlights the positive impact of liquidity policies and the expected recovery in Hong Kong stock profitability, alongside the anticipated opportunities from the Federal Reserve's interest rate cycle [4]. - The company is focusing on three strategic areas to optimize its business structure and enhance growth in technology-related services [4].

Financial Performance - Total revenue for the year ended December 31, 2023, was HKD 20,516 million, an increase from HKD 18,000 million in 2022[2] - Net profit for the year was HKD 11,981 million, up from HKD 10,095 million in the previous year, representing a growth of approximately 18.7%[4] - Basic earnings per share for 2023 was HKD 9.37, compared to HKD 8.00 in 2022, reflecting a year-on-year increase of 17.1%[2] - EBITDA for the year was HKD 14,828 million, indicating strong operational performance[2] - The company reported a total comprehensive income of HKD 12,087 million for 2023, compared to HKD 9,768 million in 2022, marking a significant increase[4] - Operating profit for the year was HKD 13,385 million, demonstrating robust profitability[2] - The company reported a net profit of HKD 10,078 million for the year, compared to HKD 18,173 million in the previous year, indicating a decrease of 44.5%[7] - The company’s total revenue for the year was HKD 49,626 million, down from HKD 49,910 million, a decline of 0.6%[7] - The company’s retained earnings increased to HKD 19,723 million from HKD 18,547 million, showing a growth of 6.3%[7] - The company reported a profit of HKD 11,862 million for the year, contributing significantly to retained earnings which totaled HKD 19,723 million by year-end[8] - The total comprehensive income for the year was HKD 12,087 million, compared to HKD 11,981 million in the previous year, reflecting an increase of 9.2%[8] Investment and Assets - Investment income for the year was HKD 10,972 million, with net investment income amounting to HKD 4,959 million after deducting interest returned to participants[2] - Total assets as of December 31, 2023, amounted to HKD 341,179 million, a decrease of 15.9% from HKD 406,051 million in 2022[5] - The company’s equity attributable to shareholders increased to HKD 51,344 million, up from HKD 49,728 million, reflecting a growth of 3.3%[5] - The company’s financial assets measured at fair value through profit or loss increased to HKD 6,961 million from HKD 6,964 million, a slight decrease of 0.04%[5] - The company’s total equity increased to HKD 51,796 million from HKD 50,099 million, reflecting a growth of 3.4%[5] - The company’s borrowings decreased to HKD 447 million from HKD 491 million, a reduction of 8.9%[5] - The group reported financial assets classified as non-HKFRS 13 Level 1 investments amounting to HKD 8.045 billion as of December 31, 2023, down from HKD 9.219 billion in 2022[21] - Investments under the investment fund category totaled HKD 5.698 billion as of December 31, 2023, compared to HKD 5.648 billion in the previous year[21] Cash Flow and Liquidity - Cash and cash equivalents decreased to HKD 125,107 million from HKD 184,965 million, representing a decline of 32.3%[5] - The net cash inflow from main business activities was HKD 11,294 million, a decrease of 13.5% from HKD 13,062 million in 2022[9] - Cash and cash equivalents decreased by HKD 6,040 million, ending the year at HKD 9,212 million compared to HKD 15,258 million at the beginning of the year[9] - The company paid dividends totaling HKD 10,316 million, which included an interim dividend of HKD 4.50 per share[9] - The cash outflow from investment activities was HKD 6,290 million, significantly higher than HKD 1,700 million in the previous year[9] - The company’s cash flow from operating activities was impacted by a decrease in cash inflow from other business activities, which totaled HKD 11,500 million compared to HKD 14,956 million in the previous year[9] Governance and Management - The company’s board consists of 12 independent non-executive directors, ensuring strong governance and oversight[1] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[1] Taxation and Compliance - The group has recognized a potential tax liability of HKD 21 million related to additional tax assessments, which may affect future financial results[22] - The group has received a tax assessment notice from the Hong Kong tax authority amounting to HKD 16 million regarding offshore profits exemption[22] - The total tax expense for 2023 decreased to 1,351 million HKD from 1,564 million HKD in 2022, reflecting a reduction of 13.6%[58] - The total tax provision for overseas tax increased to 163 million HKD in 2023 from 117 million HKD in 2022, reflecting a growth of 39.4%[58] Employee Compensation and Benefits - Employee compensation and related expenses totaled HKD 3,564 million in 2023, an increase from HKD 3,324 million in 2022, which is a rise of 7%[42] - Total remuneration for executive directors in 2023 amounted to HKD 89,295,000, an increase of 3.0% from HKD 86,561,000 in 2022[50] - Performance cash bonuses for executive directors rose to HKD 14,040,000 in 2023, up 13.5% from HKD 12,375,000 in 2022[50] - The total remuneration for non-executive directors was HKD 24,294,000 in 2023, compared to HKD 23,643,000 in 2022, reflecting a 2.8% increase[51] - The total employee share-based compensation expense recognized for the year was HKD 399 million, up from HKD 380 million in 2022, representing a growth of 5%[146] Strategic Initiatives - The group restructured its operational segments in 2023, creating a new "Data and Connectivity" segment, which now includes revenue from market data sales and related services[24] - The restructuring aimed to better align with market operations and enhance strategic decision-making capabilities[24] - The group’s strategic investments in joint ventures are expected to enhance Hong Kong's competitiveness and support the development of mainland China's capital markets[99][100] Risk Management - The group’s risk management strategy focuses on minimizing potential adverse impacts from market risks, including foreign exchange, price, and interest rate risks[178] - The group’s investment policy aims to achieve optimal returns while ensuring liquidity and managing risks associated with financial assets[180] - The group’s financial risk management includes monitoring market risks and implementing investment restrictions to control exposure[180] Contingent Liabilities and Legal Matters - The group has a contingent liability of up to HKD 71 million related to potential compensation claims from the Securities and Futures Commission as of December 31, 2023[166] - The maximum contingent liability for compensation to participants for underpaid stamp duty is estimated at HKD 115 million, assuming all 574 participants are in default[166] - The group has not recognized any provisions in the financial statements related to the judicial review due to the favorable court ruling[168] Future Outlook - The company plans to continue evaluating the useful lives and residual values of fixed assets at each reporting period[113] - The company aims to enhance employee retention and motivation through its share reward program, which is a key component of its compensation strategy[147]

Financial Performance - In 2023, the company's revenue and other income reached HKD 20.516 billion, an increase of 11% compared to 2022[4] - The company's net profit attributable to shareholders rose by 18% to HKD 11.862 billion in 2023[4] - EBITDA for 2023 was HKD 14.828 billion, up 12% from 2022, with an EBITDA margin of 73%, an increase of 1 percentage point[4] - Total revenue and other income for 2023 reached HKD 20.516 billion, an increase of 11% compared to HKD 18.456 billion in 2022[5] - Shareholder profit attributable to the company was HKD 11.862 billion, up 18% from HKD 10.078 billion in 2022[5] - Basic earnings per share increased to HKD 9.37, representing an 18% rise from HKD 7.96 in 2022[5] - The company reported a net investment income of HKD 1.487 billion, a turnaround from a loss of HKD 480 million in 2022[4] - The net investment income reached a historical high of HKD 5 billion in 2023, surpassing the previous record set in 2019[33] - The company reported a total revenue of HKD 20,516 million for the year ended December 31, 2023, an increase from HKD 15,445 million in the previous year[140] - Net profit for the year was HKD 11,981 million, representing a 18.66% increase compared to HKD 10,095 million in 2022[141] Market Activity - The average daily trading volume decreased, impacting trading and settlement fees, despite increases in LME trading and settlement fees[4] - Average daily trading value of equity securities on the exchange was HKD 93.2 billion, while the average daily trading value of derivatives was HKD 11.8 billion[6] - The average daily trading value for the Stock Connect was HKD 108.3 billion, indicating a robust trading environment[6] - The average daily trading amount in the cash market was HKD 105 billion, a 16% decrease compared to 2022[33] - The average daily trading volume for northbound and southbound transactions under the Stock Connect reached RMB 108.3 billion and HKD 31.1 billion, generating HKD 2.2 billion in revenue and other income[18] - The average daily trading volume of fee-paying metal contracts on LME increased by 11% and open interest rose by 25% compared to 2022[27] - The average daily trading volume of the spot market was HKD 105 billion, a decrease of 16% compared to 2022[49] - The average daily trading volume of ETPs reached a record high of HKD 14 billion in 2023, up from HKD 12 billion in 2022[55] Strategic Developments - The company launched new initiatives including "Swap Connect" and "HKEX Synapse" to enhance market connectivity and operational efficiency[2] - The introduction of the new listing rules under Chapter 18C and the expansion of the Stock Connect program were significant strategic developments[3] - The company opened new offices in New York and London to better support clients across different time zones[2] - HKEX plans to implement GEM listing reforms in January 2024 to support small and medium-sized enterprises while maintaining high investor protection levels[13] - The Stock Connect program expanded to include over 1,000 additional eligible stocks, enhancing cross-border investment opportunities[23] - The company is enhancing its technology infrastructure to support new product launches and market expansion[184] - The company is focused on expanding its product offerings in the derivatives market, including stock options and commodity-related businesses[182] Operating Expenses - Operating expenses increased by 7% in 2023, driven by higher employee and IT costs[4] - Operating expenses increased by 10% in 2023, primarily due to rising costs allocated to the listing segment[48] - The operating expenses increased by 115 million (11%), leading to a decline in EBITDA margin from 47% to 45%[97] - Employee costs increased by HKD 240 million (7%) due to strategic hiring and salary adjustments, reflecting the company's commitment to talent development[117] Sustainability and ESG Initiatives - HKEX aims to achieve carbon neutrality by 2024 and net-zero emissions by 2040, ten years ahead of the original target, reflecting its commitment to sustainable development[14] - The Hong Kong Stock Exchange (HKEX) launched a consultation document in April 2023 to optimize its ESG framework for issuer disclosure, aiming to align with the International Sustainability Standards Board (ISSB) standards[12] - The company continues to support responsible supply chains in the metals industry through donations to partners addressing child labor issues in African mining[14] - The LMEpassport platform showcased sustainability certifications for over 200 registered brands, enhancing data comparability in ESG aspects[29] - The company emphasizes its commitment to ESG (Environmental, Social, and Governance) principles in its operations[183] Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code during 2023, except for the rotation of directors[179] - The company’s audit committee, along with external auditors, reviewed the consolidated financial statements for the year ended December 31, 2023, confirming compliance with applicable accounting standards[171] - The group has adopted several new HKFRSs effective from January 1, 2023, impacting accounting policies but not resulting in any financial impact[144] Future Outlook - The company remains cautiously optimistic about future prospects despite a complex macroeconomic and geopolitical environment[2] - The new CEO, appointed to take office on March 1, 2024, has extensive capital market experience and is expected to lead HKEX's future development effectively[16] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[140] - The company is actively exploring opportunities for mergers and acquisitions to enhance market presence[182]

Financial Performance - Revenue for Q3 2023 was HKD 5.084 billion, an 18% increase compared to Q3 2022[4] - Net profit attributable to shareholders increased by 30% to HKD 2.953 billion in Q3 2023[4] - EBITDA margin improved to 74%, up 4 percentage points from Q3 2022[4] - The company reported a 31% increase in net profit for the first three quarters of 2023, totaling HKD 9.265 billion[8] - Total revenue and other income for the first three quarters of 2023 was HKD 15.659 billion, an 18% increase from the same period in 2022[8] - In Q3 2023, revenue and other income increased by 1% compared to Q2 2023, while profit rose by 2%, reflecting a slight increase in net investment income[10] - For the nine months ended September 30, 2023, total revenue was $11,695 million, a decrease of 8.1% from $12,726 million for the same period in 2022[49] - Net investment income for the nine months ended September 30, 2023, was $3,887 million, significantly up from $423 million in the same period of 2022[49] - Operating profit for the nine months ended September 30, 2023, increased to $10,484 million, compared to $8,306 million for the same period in 2022, reflecting a growth of 26.4%[49] - The basic earnings per share for the nine months ended September 30, 2023, was HKD 7.32, up from HKD 5.61 in the same period of 2022, representing a growth of 30.3%[49] Trading Activity - Average daily trading value of equity securities products reached HKD 87.0 billion, up from HKD 84.0 billion in Q3 2022[6] - The average daily trading value of the Stock Connect (Northbound) was RMB 106.1 billion, compared to RMB 96.7 billion in Q3 2022[6] - In the first three quarters of 2023, the average daily trading amount of the Hong Kong Stock Exchange's equity securities products was HKD 97.5 billion, a decrease of 9% compared to HKD 107.4 billion in the same period of 2022[9] - The average daily trading amount of the Hong Kong Stock Exchange's derivatives, including warrants and callable bull/bear contracts, was HKD 12.2 billion, down 27% from HKD 16.7 billion in the first three quarters of 2022[9] - The average daily trading amount for the stock market in the first three quarters of 2023 was HKD 109.7 billion, a decline of 12% from HKD 124.1 billion in the first three quarters of 2022[10] - The average daily trading amount of the Stock Connect (Shanghai and Shenzhen) was RMB 108.2 billion, an increase from RMB 101.3 billion in the first three quarters of 2022[9] - The average daily transaction amount for the Stock Connect's Southbound trading was HKD 57.5 billion, compared to HKD 54.8 billion in the previous year[19] - The average daily trading volume of derivative contracts reached a record high, with an increase of 9% compared to the first three quarters of 2022[10] - The average daily trading volume of derivative products reached a record high of 1,357,361 contracts, reflecting a 10% increase compared to the first three quarters of 2022[25] Capital Expenditure and Investment Income - Capital expenditure for Q3 2023 was HKD 329 million, a 12% increase from Q3 2022[5] - Capital expenditures for the first three quarters of 2023 amounted to HKD 830 million, up from HKD 773 million in the same period of 2022, mainly for the development and enhancement of trading and clearing systems[45] - The total investment income net amount for margin and clearing fund increased by HKD 18.63 billion in the first three quarters of 2023, reflecting higher deposit interest rates[42] - The investment income net amount allocated to the spot segment was HKD 172 million, a significant increase of 406% compared to HKD 34 million in the same period of 2022[44] - The investment income net amount from equity securities and financial derivatives reached HKD 2.393 billion, a 261% increase from HKD 662 million in the previous year[44] - The total investment income net amount for the margin and clearing fund was HKD 2.710 billion in the first three quarters of 2023, compared to HKD 847 million in the same period of 2022, marking a 220% increase[44] Legal and Compliance Matters - The company is currently involved in legal proceedings with claims totaling approximately $600 million related to the suspension of nickel contracts in March 2022[46] - The company has not made any provisions in its financial statements regarding the potential financial impact of ongoing legal claims due to insufficient information[47] - The company is actively defending against claims it believes are legally unfounded, with the first hearing held from June 20 to 22, 2023, regarding the legality of its decision-making process[46] - The Hong Kong Stock Exchange's compliance assessment and on-site inspection plan for 2023 was successfully implemented, completing all on-site inspections of selected participants[20] Market Developments and Initiatives - The company launched the new HKEX Synapse platform on October 9, 2023, enhancing the settlement process for Stock Connect[3] - The Hong Kong Stock Exchange launched the FINI platform for IPO settlement, set to officially start on November 22, 2023, aimed at modernizing and digitizing the IPO settlement process[17] - The company is actively collaborating with a dedicated task force established by the Hong Kong government to enhance market liquidity and competitiveness[11] - The company continues to focus on sustainable development and corporate social responsibility, including initiatives in market development and employee wellness[41] Financial Position - Cash and cash equivalents decreased to 138,911 million HKD as of September 30, 2023, from 184,965 million HKD as of December 31, 2022, indicating a decline of 25%[51] - Total assets amounted to 342,482 million HKD as of September 30, 2023, down from 406,051 million HKD as of December 31, 2022, a decrease of 16%[51] - Total liabilities decreased to 293,144 million HKD as of September 30, 2023, compared to 355,952 million HKD as of December 31, 2022, reflecting a reduction of 18%[51] - The company’s equity attributable to shareholders was 48,884 million HKD as of September 30, 2023, down from 49,728 million HKD as of December 31, 2022, a decrease of 2%[51] - The company’s financial assets measured at fair value through profit or loss increased to 7,195 million HKD as of September 30, 2023, from 6,964 million HKD as of December 31, 2022, a rise of 3%[51] - The company’s total liabilities included 54,307 million HKD in derivative financial instruments as of September 30, 2023, down from 80,705 million HKD as of December 31, 2022, a decrease of 33%[51]

Financial Performance - The group's revenue and other income for the first half of 2023 reached HKD 10.575 billion, an increase of 18% compared to the same period in 2022[12]. - Shareholders' profit attributable increased by 31% to HKD 6.312 billion for the first half of 2023[12]. - Revenue and other income reached 5.017 billion HKD in Q2 2023, an 18% increase compared to Q2 2022[16]. - Net profit attributable to shareholders was 2.904 billion HKD, up 34% from 2.168 billion HKD in Q2 2022[18]. - Total revenue for the six months ended June 30, 2023, was HKD 10,575 million, an increase of 18.3% compared to HKD 8,937 million for the same period in 2022[117]. - Investment income for the same period was HKD 5,774 million, significantly up from HKD 299 million in the previous year[117]. - Net profit for the six months ended June 30, 2023, was HKD 6,368 million, representing a 32% increase from HKD 4,829 million in the prior year[118]. - Basic earnings per share for the period was HKD 4.99, compared to HKD 3.82 for the same period last year, reflecting a 30.7% increase[117]. - EBITDA for the six months ended June 30, 2023, was HKD 7,859 million, up from HKD 6,394 million, marking a 22.9% increase[117]. Trading Activities - The average daily trading amount of the stock exchange's equity securities products was HKD 102.9 billion, a decrease of 14% year-on-year[15]. - The average daily trading amount of the Stock Connect (Shanghai and Shenzhen) was RMB 109.3 billion, an increase of 5% compared to the previous year[15]. - The average daily trading volume of derivative contracts reached a new high of 735,000 contracts in the first half of 2023, representing a 4% increase year-on-year[15]. - The average daily trading value for the ETF market increased by 21% to 11.7 billion HKD[23]. - The average daily trading value of derivatives, including warrants and CBBCs, decreased by 36% compared to the first half of 2022[47]. - The average daily trading volume of Hang Seng Tech Index futures and options reached 106,062 contracts, a 62% increase compared to the first half of 2022[52]. - The average daily trading value for Southbound trading under the Stock Connect was HKD 16.9 billion, consistent with HKD 17.0 billion in the same period last year[40]. Product Development and Innovation - The company launched the "Swap Connect" and a new HKD-CNY dual counter model, enhancing its product offerings[8]. - New product offerings included a Bitcoin futures ETF and two ESG ETFs, expanding the product portfolio[24]. - The company plans to launch FINI (Fast Interface for New Issuance) in October 2023 to digitize and modernize the IPO settlement process in Hong Kong[25]. - The company plans to increase trading days for Stock Connect by approximately 10 days annually, enhancing trading opportunities[24]. - The company continues to promote sustainable finance products through its STAGE platform and is committed to achieving net-zero emissions[67]. Operating Expenses and Financial Management - Operating expenses rose by 7% in the first half of 2023, mainly due to increased employee costs and professional fees related to LME[32]. - The company’s operating expenses increased to HKD 2,622 million from HKD 2,456 million, reflecting a rise of 6.8%[117]. - The total employee costs for the first half of 2023 were HKD 1,711 million, compared to HKD 1,667 million in the same period of 2022, reflecting an increase of 2.6%[130]. - Professional fees surged by 78% to HKD 137 million, up from HKD 77 million, largely due to legal and consulting costs related to the LME nickel market suspension[69]. Charity and Community Engagement - The company recorded a significant increase in donations from the charity fund, rising 243% to 24 million HKD[18]. - The company donated a total of HKD 77 million through its charity fund in the first half of 2023, focusing on financial education, inclusivity, poverty alleviation, and environmental sustainability[26]. - The group’s charity fund contributions amounted to HKD 29 million for the first half of 2023, consistent with the previous year[126]. Governance and Compliance - The Hong Kong Stock Exchange (HKEX) has complied with all provisions of the Corporate Governance Code during the six months ended June 30, 2023, except for the rotation of directors as per B.2.2[95]. - The company has adopted the Standard Code as its code of conduct for directors in securities trading, with all directors confirming compliance during the applicable period[96]. - The company has maintained transparency in its governance practices, ensuring compliance with relevant regulations and guidelines[96]. Market Outlook and Strategic Initiatives - The company plans to continue diversifying its market and product offerings to capture emerging opportunities despite macroeconomic uncertainties[5]. - Future outlook indicates a positive growth trajectory, driven by increased trading activities and strategic initiatives in the financial markets[176]. - The ongoing development of new products and technologies is a strategic focus for HKEX to enhance market efficiency and attract more investors[174].

Financial Performance - For the six months ended June 30, 2023, total revenue was HKD 10,575 million, an increase from HKD 8,937 million for the same period in 2022, representing a growth of 18.3%[2] - Net investment income for the period was HKD 2,676 million, significantly up from HKD 89 million in the previous year, indicating a substantial increase of 2,895.5%[2] - The operating profit for the six months ended June 30, 2023, was HKD 7,140 million, compared to HKD 5,677 million in the same period of 2022, reflecting an increase of 25.8%[2] - The profit attributable to shareholders for the period was HKD 6,312 million, up from HKD 4,836 million in the previous year, marking a growth of 30.5%[2] - Basic earnings per share for the period were HKD 4.99, compared to HKD 3.82 for the same period in 2022, representing an increase of 30.7%[2] - Total comprehensive income for the period was HKD 6,467 million, compared to HKD 4,631 million in the previous year, indicating a growth of 39.7%[3] - The EBITDA for the group was HKD 7,859 million for the first half of 2023, up from HKD 6,394 million in the same period of 2022, reflecting a growth of 22.9%[14] - The group’s pre-tax profit for the first half of 2023 was HKD 7,109 million, compared to HKD 5,646 million in the same period of 2022, representing a growth of 25.5%[14] Revenue Segmentation - The "Cash" segment generated revenue of HKD 4,100 million, while the "Equity Securities and Financial Derivatives" segment contributed HKD 1,788 million, and the "Commodity" segment brought in HKD 944 million for the six months ended June 30, 2023[13] - The "Data and Connectivity" segment reported revenue of HKD 1,018 million, showing a significant increase from HKD 980 million in the same period last year[14] - Trading fees from equity securities transactions amounted to HKD 1,525 million, a decrease from HKD 1,791 million in the previous year, indicating a shift in trading activity[75] Expenses and Liabilities - Operating expenses increased to HKD 2,622 million from HKD 2,456 million, reflecting a rise of 6.8%[2] - The company reported a decrease in trading fees and trading system usage fees to HKD 3,182 million from HKD 3,553 million, a decline of 10.5%[2] - Total liabilities stood at HKD 305.42 billion, down 14.0% from HKD 355.95 billion at the end of 2022[4] - The company’s borrowings slightly increased to HKD 495 million from HKD 491 million, reflecting a marginal rise of 0.8%[4] Cash Flow and Investments - The net cash inflow from operating activities for the six months ended June 30, 2023, was HKD 5,395 million, down from HKD 6,778 million in the same period of 2022, representing a decrease of approximately 20.4%[7] - The net cash outflow from investing activities for the six months ended June 30, 2023, was HKD 3,206 million, compared to HKD 2,141 million in the prior year, indicating an increase of approximately 49.7%[7] - The company paid dividends of HKD 4,649 million during the financial period, a decrease from HKD 5,313 million in the previous year, reflecting a reduction of approximately 12.5%[7] Assets and Equity - Total assets as of June 30, 2023, amounted to HKD 357.49 billion, a decrease of 6.1% from HKD 406.05 billion as of December 31, 2022[4] - Cash and cash equivalents decreased to HKD 148.58 billion from HKD 184.97 billion, representing a decline of 19.6%[4] - The company’s equity attributable to shareholders rose to HKD 51.65 billion, up from HKD 49.73 billion, indicating an increase of 3.9%[5] - The company’s retained earnings increased to HKD 20.06 billion as of June 30, 2023, compared to HKD 18.55 billion at the end of 2022, reflecting a growth of 8.1%[5] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service offerings[1] - The company plans to enhance its data business as a key strategic development area, reflecting a shift in focus towards data services and connectivity[12] - The company continues to focus on developing products related to green development, as evidenced by the launch of industrial silicon and lithium carbonate futures and options[57] Regulatory and Compliance - The company adopted new HKFRS standards in 2023, which had no financial impact on the group during the reporting period[9] - The group is involved in significant litigation with claims totaling approximately 600 million USD as of June 30, 2023, related to decisions made in March 2022 regarding nickel contracts[46] Management and Personnel - Total remuneration for key management personnel for the six months ended June 30, 2023, was 143 million, down from 170 million in the same period of 2022, a decrease of 15.9%[48]

Financial Performance - The group's revenue and other income for the first half of 2023 reached HKD 10.575 billion, an increase of 18% compared to the same period in 2022[7]. - Shareholder profit attributable to the company was HKD 6.312 billion, reflecting a 31% increase from HKD 4.836 billion in the first half of 2022[7]. - The EBITDA margin improved to 75%, up 3 percentage points from the same period last year[7]. - The company reported a net investment income of HKD 817 million for the first half of 2023, a significant recovery from a loss of HKD 378 million in the same period last year[8]. - Investment income netted HKD 2.7 billion in the first half of 2023, reflecting a strong performance due to rising interest rates and robust external portfolio performance[15]. - In Q2 2023, total revenue and other income amounted to HKD 5 billion, the highest for a second quarter, driven by strong investment income[16]. - The EBITDA for the first half of 2023 was HKD 7.9 billion, down 13% compared to the same period in 2022, primarily due to reduced trading and settlement volumes[19]. - The company reported a significant increase in net investment income, with a net amount of HKD 2,676 million compared to HKD 89 million in the previous year[81]. - The company’s operating profit for the period was HKD 7,140 million, up from HKD 5,677 million in the same period last year, showcasing operational efficiency[81]. Trading Volume and Market Activity - The average daily trading volume of equity securities on the exchange decreased by 14% to HKD 102.9 billion compared to the first half of 2022[8]. - The average daily trading volume of derivatives contracts increased by 4% to 7,354 contracts in the first half of 2023[8]. - Average daily trading volume in the Hong Kong securities market was HKD 115.5 billion, a decrease of 16% year-on-year[11]. - The average daily trading volume for ETFs increased by 21% year-on-year, reaching HKD 11.7 billion[11]. - The average daily trading volume of Bond Connect northbound reached RMB 38.94 billion, a 25% increase year-on-year[8]. - The average daily trading amount for the Stock Connect's southbound trading was HKD 58.6 billion, an increase from HKD 55.4 billion in the same period last year[25]. - The average daily trading volume of the Stock Connect program increased for both southbound and northbound trading compared to the same period in 2022[12]. - The average daily trading volume of the USD/CNY (HK) futures contracts totaled 1,586,469 contracts in the first half of 2023[36]. - The average daily trading volume of three specific products (Hang Seng Index futures options, Hang Seng China Enterprises Index futures options, and Hang Seng Tech Index futures options) reached 39,947 contracts, an increase of over 170% compared to the first half of 2022[34]. Product Development and Innovations - The company launched the "Swap Connect" mechanism and the new HKD-CNY dual counter model in May and June 2023, respectively[3]. - The company launched a new Bitcoin futures ETF and two ESG ETFs in the first half of 2023, expanding its product offerings[12]. - The company plans to introduce FINI (Fast Interface for New Issuance) in October 2023 to modernize the IPO settlement process[13]. - The company is exploring potential acquisitions to enhance its service offerings and expand its customer base in the Asia-Pacific region[112]. - New product initiatives include the launch of a sustainable and green trading platform, aimed at attracting environmentally conscious investors[113]. Operating Expenses and Financial Position - Operating expenses increased by 7% in the first half of 2023 compared to the same period in 2022, mainly due to higher employee costs and professional fees related to LME[15]. - Operating expenses increased by 7% to HKD 2,622 million compared to HKD 2,456 million in the same period of 2022[53]. - Employee-related expenses rose by 3% to HKD 1,711 million, primarily due to strategic hiring and salary adjustments[53]. - The company's total capital debt ratio remained stable at 1% as of June 30, 2023, consistent with December 31, 2022[67]. - As of June 30, 2023, total financial assets amounted to HKD 313,610 million, down from HKD 358,103 million at the end of 2022[58]. - The group's cash and cash equivalents decreased to HKD 148,578 million from HKD 184,965 million[59]. - The company reported a total equity of 52,073 million as of June 30, 2023, an increase of 3.9% from 50,099 million at the end of 2022[83]. Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code, except for the rotation of directors as per provision B.2.2[78]. - The audit committee, along with external auditors, has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, confirming compliance with applicable accounting standards[77]. - The management emphasized a commitment to maintaining high standards of corporate governance and transparency in all operations[113]. Future Outlook and Strategic Plans - The company anticipates a revenue growth of 8% for the upcoming fiscal year, driven by increased market activity and new product offerings[113]. - The company plans to continue diversifying its market offerings and product portfolio to provide broader opportunities for clients globally[2]. - The company has set a target to increase its market share by 5% over the next two years through innovative trading solutions[112]. - The ongoing development of new technologies is aimed at improving trading efficiency and user experience, with a focus on digital transformation[113].

Financial Performance - The group's revenue and other income for Q1 2023 reached HKD 5.558 billion, a 19% increase compared to HKD 4.690 billion in Q1 2022[4] - The net profit attributable to shareholders was HKD 3.408 billion, reflecting a 28% increase from HKD 2.668 billion in the same quarter last year[4] - Total revenue and other income for Q1 2023 reached HKD 5.6 billion, a 19% increase from Q1 2022, marking the second-highest quarterly revenue ever[6] - Investment income for Q1 2023 hit a record high of HKD 1.5 billion, contributing significantly to the revenue increase[6] - Operating profit for the three months ended March 31, 2023, was HKD 3,844 million, up 23.2% from HKD 3,119 million in the previous year[47] - Basic earnings per share increased to HKD 2.69 from HKD 2.11, representing a growth of 27.6%[47] - Total comprehensive income for the three months ended March 31, 2023, was HKD 3,623 million, compared to HKD 2,617 million in the same period of 2022, reflecting a year-over-year increase of 38.4%[48] Trading Activity - The average daily turnover of equity securities products was HKD 114.7 billion, down 9% from HKD 126.0 billion in Q1 2022[5] - The average daily turnover of derivatives, including warrants and CBBCs, decreased by 36% to HKD 13.1 billion from HKD 20.5 billion in the previous year[5] - In Q1 2023, the average daily trading amount was HKD 127.8 billion, down 13% compared to Q1 2022, but similar to Q4 2022[6] - The average daily trading amount for the Stock Connect was RMB 53.1 billion, a decrease of 6.9% from RMB 57.1 billion in Q1 2022[14] - The average daily trading amount for the Exchange-Traded Products (ETP) market reached HKD 14.5 billion in Q1 2023, representing a 31% increase compared to the same period last year[15] - The average daily trading volume of derivative contracts was 1,418,695, an increase of 6% compared to the same period last year[21] - The average daily trading volume of Hang Seng Tech Index futures in Q1 2023 was 99,649 contracts, up 88% year-on-year[21] New Listings and Market Activity - There are over 90 new listing applications currently being processed as of March 31, 2023, indicating strong momentum in new listings[3] - In Q1 2023, 18 new companies were listed on the exchange, raising a total of HKD 6.7 billion, a 55% decrease from Q1 2022[13] - The total fundraising amount from new listings in Q1 2023 was RMB 33.7 billion, significantly down from RMB 78 billion in Q1 2022[14] - The number of newly listed companies on the Main Board in Q1 2023 was 18, compared to 17 in the same period last year[14] Investment Income - The company reported a significant recovery in investment income, with net investment income of HKD 549 million compared to a loss of HKD 104 million in Q1 2022[4] - Total net investment income for Q1 2023 was HKD 986 million, significantly up from HKD 163 million in Q1 2022, representing a year-over-year increase of 504%[42] - The annualized net investment return for Q1 2023 was 6.31%, compared to a negative return of 1.21% in Q1 2022[36] - The net investment income from margin and clearing funds increased by HKD 823 million compared to Q1 2022, reflecting higher interest rates on HKD and USD deposits[40] Operating Expenses - Operating expenses rose by 11% year-on-year, primarily due to increased employee costs and professional fees related to market events[6] - The company reported a significant increase in employee-related expenses to HKD 870 million from HKD 803 million year-over-year[47] - Operating expenses increased by 10% in Q1 2023 due to salary adjustments and hiring for strategic plans[39] Product Offerings - The company launched two ESG ETFs and one Bitcoin futures ETF in Q1 2023, indicating a focus on new product offerings[3] - The company launched 6 new ETPs in Q1 2023, including a Bitcoin futures ETF and two ESG ETFs, enhancing its product offerings[15] Market Developments - The Northbound and Southbound trading under the Stock Connect program will see an increase of approximately ten trading days annually due to the optimized trading calendar[3] - The Stock Connect expansion on March 13, 2023, included 1,034 additional stocks, enhancing market connectivity[13] - The introduction of the investor identification system on March 20, 2023, is expected to enhance market surveillance and investor confidence[13] Financial Position - Total assets as of March 31, 2023, amounted to HKD 379,496 million, a decrease from HKD 406,051 million as of December 31, 2022[49] - Total liabilities decreased to HKD 330,366 million from HKD 355,952 million, indicating a reduction of 7.2%[49] - Cash and cash equivalents as of March 31, 2023, were HKD 173,681 million, down from HKD 184,965 million at the end of 2022[49] Legal and Compliance - The company is actively defending against legal claims related to the suspension of nickel contracts, with no significant changes in contingent liabilities reported as of March 31, 2023[44] - The adoption of new/revised HKFRSs effective from January 1, 2023, was noted, impacting the financial reporting standards[50] - The company's auditor submitted a report on the consolidated financial statements with no reservations or emphasis of matter[51]