Summary of Hong Kong Exchanges and Clearing Limited (HKEX) Conference Call Industry Overview - The conference call focuses on the performance and strategic developments of the Hong Kong Exchanges and Clearing Limited (HKEX) in the financial market, particularly in the context of the cash and derivatives markets, IPO activities, and community investments. Key Financial Performance - In the first half of 2025, HKEX reported a total revenue and other income growth of 33%, reaching HKD 14.1 billion, with a net profit of USD 8.5 billion and earnings per share of USD 6.74, both reflecting a 39% year-on-year increase [3][9][10]. - The board declared an interim dividend of USD 6 per share, a 38% increase from the previous year, representing 90% of the group's profit [3][9]. - Daily average trading volume in the cash market reached USD 240 billion, more than double that of the same period last year [2][3]. IPO and Fundraising Achievements - HKEX became the world's largest IPO market in the first half of 2025, with 44 companies going public and raising over HKD 109 billion, marking the best half-year performance since 2021 [2][6][7]. - Follow-on fundraising totaled over HKD 240 billion, also the highest since 2021 [7]. Market Performance Highlights - The cash market showed strong performance with historical trading volume records; ETP market daily average trading volume increased by 163% [5]. - Derivatives market recorded a daily average trading volume of 1.7 million contracts, an 11% year-on-year increase, with USD/CNY futures seeing a 44% increase in daily average trading volume [2][11]. Strategic Developments - HKEX signed a memorandum of understanding with the Central Clearing Company to support the development of Hong Kong's fintech ecosystem [4]. - Initiatives included launching a technology enterprise channel, approval for Hong Kong as a new ENE storage location, and the initiation of a 30-year swap trading under the Northbound Swap Connect [4]. Community Investment Initiatives - To celebrate its 25th anniversary, HKEX committed to investing at least HKD 25 million in a flagship charity program focused on supporting caregivers in Hong Kong [8]. Future Outlook - Despite potential impacts from macroeconomic and geopolitical factors, HKEX maintains a cautiously optimistic outlook for the coming year, driven by positive prospects for the Chinese economy and advancements in AI and innovation [9]. Southbound Trading Activity - Southbound average daily trading volume reached HKD 111 billion, tripling from the previous year and accounting for nearly 23% of cash market trading volume [10][14]. Derivatives and Commodity Market Performance - The derivatives market saw robust growth, with significant increases in trading volumes, particularly in USD/CNY futures [11]. Digital Asset Ecosystem Development - HKEX is focusing on the development of the digital asset ecosystem, allowing ETFs linked to cryptocurrencies to be listed and exploring the potential use cases for stablecoins [25][26]. Conclusion - HKEX's strategic initiatives and strong financial performance position it well as a leading international financial center, with ongoing efforts to enhance market liquidity and community engagement while navigating the evolving regulatory landscape for digital assets.

Investment Rating - The report maintains a "Strong Buy" investment rating for Hong Kong Exchanges and Clearing Limited (HKEX) with a target price of HKD 515.00, indicating a potential upside of 17% from the current price of HKD 441.2 [2][8]. Core Insights - The report highlights that HKEX achieved record half-year results in H1 2025, with total revenue of HKD 14.1 billion, a year-on-year increase of 33%, and net profit attributable to shareholders of HKD 8.5 billion, up 39% year-on-year [1][5]. - The report emphasizes strong trading activity in both the cash and derivatives markets, contributing to the revenue and profit growth [5][8]. - The report projects continued growth in net profit for HKEX, estimating HKD 16.6 billion, HKD 18.1 billion, and HKD 19.5 billion for the years 2025 to 2027, representing year-on-year growth rates of 27%, 9%, and 7% respectively [8]. Financial Performance Summary - H1 2025 financial highlights include: - Total revenue: HKD 14.1 billion, +33% YoY - Net profit: HKD 8.5 billion, +39% YoY - EBITDA: HKD 10.9 billion, +43% YoY, with an EBITDA margin of 79%, up 6 percentage points YoY [1][5][8]. - Revenue breakdown by business segment for H1 2025: - Cash market: HKD 6.7 billion, +62% YoY - Equity securities and financial derivatives: HKD 3.55 billion, +15% YoY - Other segments also showed positive growth [5][8]. Market Activity - The report notes that the cash market saw record trading volumes, with average daily turnover (ADT) reaching HKD 222.8 billion, a 122% increase YoY [5][6]. - The primary market experienced a strong momentum with 44 new listings in H1 2025, raising HKD 109.4 billion, which is more than eight times the amount raised in H1 2024 [8][34]. Valuation Metrics - The report provides projected financial metrics for HKEX: - Revenue growth forecast for 2025: HKD 27.8 billion, +24% YoY - Projected PE ratio for 2025: 22.23 [7][33]. - The report indicates a strong return on equity (ROE) of 25.1% and a book value per share of HKD 41.0 [2][7].

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [1] Core Views - The company achieved record high semi-annual performance with total revenue and other income reaching HKD 141 billion, a year-on-year increase of 33%, and net profit attributable to shareholders at HKD 85 billion, up 39% year-on-year [7] - The significant growth in performance is attributed to improved investment sentiment supported by mainland policies, leading to increased participation from mainland investors in offshore markets, which boosted trading volumes in the Hong Kong stock market [7] - The report forecasts continued strong growth for the company, with expected shareholder profits of HKD 174.19 billion, HKD 192.62 billion, and HKD 207.88 billion for 2025-2027, corresponding to growth rates of 33%, 11%, and 8% respectively [7] Financial Performance Summary - Total revenue (in million HKD) for 2023A, 2024A, 2025E, 2026E, and 2027E is projected at 20,516, 22,374, 27,785, 30,524, and 32,970 respectively, with year-on-year growth rates of 11.16%, 9.06%, 24.18%, 9.86%, and 8.01% [1] - Net profit attributable to shareholders (in million HKD) for the same years is expected to be 11,862, 13,050, 17,419, 19,262, and 20,788, with growth rates of 17.70%, 10.02%, 33.48%, 10.58%, and 7.92% [1] - The latest diluted EPS is projected to be 9.36, 10.29, 13.74, 15.19, and 16.40 for the years 2023A to 2027E [1] Market Data - The closing price of the stock is HKD 441.20, with a market capitalization of approximately HKD 559.37 billion [5] - The stock has a price-to-earnings (P/E) ratio of 47.16 for 2023, decreasing to 26.91 by 2027 [1][5] - The company has a book value per share of HKD 44.89 and a price-to-book (P/B) ratio of 9.83 [6][5]

Group 1 - The Hong Kong Stock Exchange (HKEX) is actively discussing the shortening of the settlement cycle for the cash market, with plans to support a T+1 settlement cycle by the end of this year [1] - HKEX CEO Charles Li noted the ongoing discussions regarding extending trading hours, referencing Nasdaq's plan to implement a 24-hour trading mechanism five days a week by the second half of 2026 [1] - The company will adopt a cautious and gradual approach, taking into account international experiences while considering local market conditions, with system upgrades and risk management frameworks being prerequisites for this process [1] Group 2 - Since the launch of the "Tech Company" special line, HKEX has received applications for IPOs from 50 companies under Chapter 18A and Chapter 18C listing rules [1]

Investment Rating - The report maintains a "Buy" rating for the company [2][17] Core Views - The company reported strong performance in 1H25, with total revenue reaching HKD 14.08 billion, a year-on-year increase of 33%. Main revenue was HKD 12.95 billion, up 34% year-on-year, and net profit was HKD 8.52 billion, up 39% year-on-year [5][7] - The report highlights that the company achieved record high revenue and net profit for the same period, driven by strong trading volumes and a resurgence in IPO activities, positioning it back at the top of the global IPO rankings [5][7] - The report projects an increase in net profit for 2025-2027, with estimates of HKD 16.93 billion, HKD 17.94 billion, and HKD 18.78 billion respectively, reflecting year-on-year growth rates of 30%, 6%, and 5% [6][7] Financial Data and Earnings Forecast - The company’s revenue is forecasted to grow from HKD 20.52 billion in 2023 to HKD 29.86 billion in 2027, with a compound annual growth rate (CAGR) of approximately 8% [6][8] - The net profit is expected to increase from HKD 11.86 billion in 2023 to HKD 18.78 billion in 2027, with a CAGR of around 9% [6][8] - The report indicates a significant improvement in EBITDA margin, projected to reach 79% in 1H25, up 6 percentage points year-on-year [5][7] Revenue Breakdown - The revenue breakdown for 1H25 shows that trading fees contributed HKD 4.91 billion (38%), settlement and clearing fees contributed HKD 3.16 billion (24%), and investment income contributed HKD 2.88 billion (22%) [7] - The report notes that all business segments, except for market data fees, achieved double-digit year-on-year growth, with trading fees and settlement fees increasing by over 40% [7] Market Performance - The average daily trading (ADT) for cash stocks in 2Q25 was HKD 220.3 billion, a year-on-year increase of 97%, while the average daily volume (ADV) for derivatives decreased [7] - The report emphasizes the strong performance of the IPO market, with 44 new listings in 1H25 raising HKD 109.4 billion, an eightfold increase compared to the same period last year [7]

Group 1 - The CEO of Hong Kong Stock Exchange (HKEX) stated that there is no established position on 24-hour trading and emphasized the need for public consultation while considering the potential risks and pressures associated with such a change [1] - Since the launch of the technology company listing channel in May, HKEX has completed over 50 IPO applications, raising nearly $17 billion, leading the global IPO rankings [1][2] - The CEO mentioned that there are currently 230 companies in the pipeline for IPO applications, indicating that Hong Kong remains the preferred international financing market for mainland enterprises [1] Group 2 - The Chief Operating Officer highlighted that many markets, including the UK and EU, are expected to transition to a "T+1" settlement cycle by the end of 2027, which would result in 88% of global trading adopting this cycle [2] - HKEX plans to consult the market on adjusting the trading unit size by the end of this year, as there are currently up to 40 different trading unit sizes [2] - HKEX reported record high revenue and profit for the first half of 2025, with revenue and other income reaching HK$14.076 billion, a 33% increase year-on-year, and a shareholder profit of HK$8.519 billion, up 39% [2] Group 3 - The average daily trading volume in the cash market, derivatives market, and Stock Connect reached a six-month high, with an average daily trading amount of CNY 240.2 billion, a year-on-year increase of 118% [3] - The Hong Kong IPO market continued its strong growth in 2025, with a total fundraising amount of HK$109.4 billion, a 716% increase year-on-year, and 44 new companies listed during the period [3] - The listing of CATL in May 2025 raised HK$41 billion, marking the largest IPO in Hong Kong since February 2021 and the largest globally in 2023 [3]

[Introduction and Company Information](index=1&type=section&id=Introduction%20and%20Company%20Information) This section provides an overview of the company's regulatory context and key information regarding its board of directors [Regulatory Disclaimer](index=1&type=section&id=Regulatory%20Disclaimer) This document's content is regulated by the Hong Kong Securities and Futures Commission, which is not responsible for its accuracy or completeness, nor does it bear any loss arising from reliance on its content - The Hong Kong SFC regulates this document but is not responsible for its accuracy or completeness, nor does it bear any losses[1](index=1&type=chunk) [Company and Board Information](index=1&type=section&id=Company%20and%20Board%20Information) Hong Kong Exchanges and Clearing Limited (HKEX) published its condensed consolidated financial statements for the six months ended June 30, 2025, with a Board comprising 12 independent non-executive directors and one executive director (Group Chief Executive) - HKEX published its condensed consolidated financial statements for the six months ended June 30, 2025[2](index=2&type=chunk) - The Board of Directors consists of **12 independent non-executive directors** and **one executive director** (Group Chief Executive)[3](index=3&type=chunk) [Condensed Consolidated Income Statement](index=2&type=section&id=Condensed%20Consolidated%20Income%20Statement) This section presents the Group's financial performance, highlighting significant revenue and profit growth, alongside increased operating and tax expenses [Income Statement Summary](index=2&type=section&id=Income%20Statement%20Summary) For the six months ended June 30, 2025, HKEX's revenue and other income significantly increased, with profit for the period substantially rising year-on-year, driven by growth in transaction and trading system usage fees, clearing and settlement fees, and net investment income, while operating expenses and tax expenses (due to minimum top-up tax) also increased - Revenue and other income increased by **32.5%** from HKD **10,621 million** in 2024 to HKD **14,076 million** in 2025[4](index=4&type=chunk) - Profit for the period increased by **38.4%** from HKD **6,186 million** in 2024 to HKD **8,562 million** in 2025[4](index=4&type=chunk) - Taxation increased by **109.1%** from HKD **766 million** in 2024 to HKD **1,602 million** in 2025, primarily due to the Hong Kong minimum top-up tax[4](index=4&type=chunk) Key Financial Data from Condensed Consolidated Income Statement | Metric | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 11,034 | 8,062 | 36.9% | | Net investment income | 2,875 | 2,521 | 14.0% | | Revenue and other income | 14,076 | 10,621 | 32.5% | | Transaction-related expenses | (164) | (166) | -1.2% | | Operating expenses | (2,973) | (2,794) | 6.4% | | EBITDA | 10,939 | 7,661 | 42.8% | | Operating profit | 10,196 | 6,963 | 46.4% | | Profit before tax | 10,164 | 6,952 | 46.2% | | Taxation | (1,602) | (766) | 109.1% | | Profit for the period | 8,562 | 6,186 | 38.4% | | Profit attributable to HKEX shareholders | 8,519 | 6,125 | 39.1% | | Basic earnings per share (HKD) | 6.74 | 4.84 | 39.2% | | Diluted earnings per share (HKD) | 6.72 | 4.83 | 39.1% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section details the Group's total comprehensive income, reflecting strong profit growth and a positive shift in other comprehensive income components [Comprehensive Income Overview](index=3&type=section&id=Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, the Group's total comprehensive income significantly increased, primarily due to a substantial rise in profit for the period and a shift from loss to positive gain in other comprehensive income, notably from currency translation differences of overseas subsidiaries and fair value changes of financial assets measured at fair value - Profit for the period increased by **38.4%** from HKD **6,186 million** in 2024 to HKD **8,562 million** in 2025[5](index=5&type=chunk) - Other comprehensive income shifted from a loss of HKD **7 million** in 2024 to a gain of HKD **483 million** in 2025[5](index=5&type=chunk) - Total comprehensive income increased by **46.4%** from HKD **6,179 million** in 2024 to HKD **9,045 million** in 2025[5](index=5&type=chunk) Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 8,562 | 6,186 | 38.4% | | Other comprehensive income | 483 | (7) | Significant growth | | - Currency translation differences of overseas subsidiaries | 198 | (18) | Significant growth | | - Cash flow hedges (net of tax) | 70 | (3) | Significant growth | | - Financial assets measured at fair value through other comprehensive income: fair value changes (net of tax) | 199 | 14 | 1321.4% | | Total comprehensive income | 9,045 | 6,179 | 46.4% | | Total comprehensive income attributable to HKEX shareholders | 9,000 | 6,119 | 47.1% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section outlines the Group's financial position, showing growth in total assets, liabilities, and equity, reflecting a strengthened financial foundation [Financial Position Overview](index=4&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, the Group's total assets and liabilities both increased, with significant rises in cash and cash equivalents, financial assets measured at amortized cost, and liabilities such as margin deposits from participants, while total equity also grew steadily, reflecting the company's continuously strengthening financial foundation - Total assets increased by **11.3%** from HKD **381,629 million** as of December 31, 2024, to HKD **424,872 million** as of June 30, 2025[6](index=6&type=chunk) - Total liabilities increased by **12.3%** from HKD **327,222 million** as of December 31, 2024, to HKD **367,421 million** as of June 30, 2025[6](index=6&type=chunk) - Total equity increased by **5.6%** from HKD **54,407 million** as of December 31, 2024, to HKD **57,451 million** as of June 30, 2025[6](index=6&type=chunk) Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | 173,897 | 134,365 | 29.4% | | Financial assets measured at fair value through profit or loss | 2,842 | 7,558 | -62.4% | | Financial assets measured at fair value through other comprehensive income | 44,117 | 50,704 | -12.9% | | Financial assets measured at amortized cost | 68,662 | 43,610 | 57.4% | | Derivative financial instruments (assets) | 58,848 | 67,747 | -13.0% | | Accounts receivable, prepayments and deposits | 51,681 | 54,497 | -5.2% | | Goodwill and other intangible assets | 19,939 | 19,605 | 1.7% | | Property, plant and equipment | 1,651 | 1,504 | 9.8% | | Right-of-use assets | 2,529 | 1,174 | 115.4% | | **Total assets** | **424,872** | **381,629** | **11.3%** | | **Liabilities** | | | | | Derivative financial instruments (liabilities) | 58,920 | 67,863 | -13.1% | | Margin deposits from participants, Mainland China securities and clearing margins, and cash collateral | 234,508 | 188,857 | 24.2% | | Accounts payable, accruals and other liabilities | 39,561 | 37,584 | 5.3% | | Current tax liabilities | 2,003 | 1,321 | 51.6% | | Participants' contributions to clearing house funds | 28,631 | 27,124 | 5.6% | | Lease liabilities | 873 | 1,294 | -32.6% | | **Total liabilities** | **367,421** | **327,222** | **12.3%** | | **Equity** | | | | | Equity attributable to HKEX shareholders | 56,910 | 53,852 | 5.7% | | Non-controlling interests | 541 | 555 | -2.6% | | **Total equity** | **57,451** | **54,407** | **5.6%** | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the changes in the Group's equity, detailing the impact of profit, other comprehensive income, and dividend distributions [Equity Changes H1 2025](index=5&type=section&id=Equity%20Changes%20H1%202025) As of June 30, 2025, equity attributable to HKEX shareholders increased from HKD **53,852 million** at the beginning of the year to HKD **56,910 million**, primarily driven by profit for the period and total comprehensive income, despite the distribution of the second interim dividend for 2024 - Equity attributable to HKEX shareholders increased from HKD **53,852 million** as of January 1, 2025, to HKD **56,910 million** as of June 30, 2025[7](index=7&type=chunk) - Profit for the period was HKD **8,519 million**, and other comprehensive income was HKD **481 million**[7](index=7&type=chunk) - A second interim dividend of HKD **6,193 million** for 2024 was distributed[7](index=7&type=chunk) Overview of Equity Changes H1 2025 | Metric | January 1, 2025 (HKD Million) | June 30, 2025 (HKD Million) | Change (HKD Million) | | :--- | :--- | :--- | :--- | | Equity attributable to HKEX shareholders | 53,852 | 56,910 | 3,058 | | Non-controlling interests | 555 | 541 | (14) | | **Total equity** | **54,407** | **57,451** | **3,044** | | **Key changes:** | | | | | Profit for the period | - | 8,519 | 8,519 | | Other comprehensive income | - | 481 | 481 | | Second interim dividend for 2024 | - | (6,193) | (6,193) | | Share-based employee compensation benefits | - | 190 | 190 | [Equity Changes H1 2024](index=6&type=section&id=Equity%20Changes%20H1%202024) As of June 30, 2024, equity attributable to HKEX shareholders increased from HKD **51,344 million** at the beginning of the year to HKD **52,708 million**, primarily due to profit for the period, partially offset by the distributed second interim dividend for 2023 - Equity attributable to HKEX shareholders increased from HKD **51,344 million** as of January 1, 2024, to HKD **52,708 million** as of June 30, 2024[8](index=8&type=chunk) - Profit for the period was HKD **6,125 million**, and other comprehensive income/(loss) was a loss of HKD **6 million**[8](index=8&type=chunk) - A second interim dividend of HKD **4,944 million** for 2023 was distributed[8](index=8&type=chunk) Overview of Equity Changes H1 2024 | Metric | January 1, 2024 (HKD Million) | June 30, 2024 (HKD Million) | Change (HKD Million) | | :--- | :--- | :--- | :--- | | Equity attributable to HKEX shareholders | 51,344 | 52,708 | 1,364 | | Non-controlling interests | 452 | 512 | 60 | | **Total equity** | **51,796** | **53,220** | **1,424** | | **Key changes:** | | | | | Profit for the period | - | 6,125 | 6,125 | | Other comprehensive income/(loss) | - | (6) | (6) | | Second interim dividend for 2023 | - | (4,944) | (4,944) | | Share-based employee compensation benefits | - | 206 | 206 | [Condensed Consolidated Cash Flow Statement](index=7&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) This section presents the Group's cash flow activities, showing significant growth in operating cash flow, a shift to net outflow from investing activities, and increased financing outflows for dividends [Cash Flow Overview](index=7&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the Group's net cash inflow from operating activities significantly increased, net cash outflow from investing activities was primarily impacted by the acquisition of HKEX headquarters property, and net cash outflow from financing activities was mainly for dividend payments, resulting in a notable increase in cash and cash equivalents at period-end - Net cash inflow from operating activities increased by **152.7%** from HKD **5,697 million** in 2024 to HKD **14,399 million** in 2025[9](index=9&type=chunk) - Net cash (outflow)/inflow from investing activities shifted from an inflow of HKD **3,572 million** in 2024 to an outflow of HKD **3,457 million** in 2025, primarily due to the payment of HKD **2,559 million** for the acquisition of HKEX headquarters property[9](index=9&type=chunk) - Net cash outflow from financing activities increased by **25.0%** from HKD **5,141 million** in 2024 to HKD **6,427 million** in 2025, mainly for dividend payments of HKD **6,169 million** to HKEX shareholders[9](index=9&type=chunk) Key Data from Condensed Consolidated Cash Flow Statement | Metric | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities (non-HKFRS measure) | 10,069 | 5,852 | 72.1% | | Net cash inflow from operating activities | 14,399 | 5,697 | 152.7% | | Net cash (outflow)/inflow from investing activities | (3,457) | 3,572 | Significant change | | - Payments for acquisition of HKEX headquarters property | (2,559) | - | N/A | | Net cash outflow from financing activities | (6,427) | (5,141) | 25.0% | | - Dividends paid to HKEX shareholders | (6,169) | (4,923) | 25.3% | | Net increase in cash and cash equivalents | 4,515 | 4,128 | 9.4% | | Cash and cash equivalents at June 30 | 18,470 | 13,334 | 38.5% | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the Group's financial statements, covering accounting policies, segment performance, and specific financial items [Note 1 Basis of Preparation](index=8&type=section&id=Note%201%20Basis%20of%20Preparation) These condensed consolidated financial statements are prepared in accordance with HKAS 34 and should be read in conjunction with the 2024 annual consolidated financial statements, with financial information for the year ended December 31, 2024, derived from the statutory annual consolidated financial statements and an unqualified auditor's report - These financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - Financial information for the year ended December 31, 2024, is derived from the statutory annual consolidated financial statements, and the auditor's report was unqualified[10](index=10&type=chunk) [Note 2 Accounting Policies](index=8&type=section&id=Note%202%20Accounting%20Policies) The accounting policies adopted in these financial statements are consistent with those in the 2024 annual consolidated financial statements; new/amended HKFRS accounting standards (e.g., HKFRS 19, HKFRS 7, and HKFRS 9 amendments) are not expected to have a significant impact on the Group, but the impact of HKFRS 18 adoption, particularly on income statement structure and management performance indicator disclosures, is still being assessed - The accounting policies used in preparing these condensed consolidated financial statements are consistent with those in the 2024 annual consolidated financial statements[11](index=11&type=chunk) - Amendments to HKFRS 19, HKFRS 7, and HKFRS 9, along with annual improvements to HKFRS accounting standards, are not expected to have any significant impact on the Group[12](index=12&type=chunk) - HKFRS 18 will replace HKAS 1, introducing new requirements to enhance comparability and transparency of financial performance, with no impact on profit attributable to Group shareholders, and the Group is still assessing its impact on the income statement structure and disclosure of management performance indicators[13](index=13&type=chunk) [Note 3 Operating Segments](index=10&type=section&id=Note%203%20Operating%20Segments) The Group classifies its business into four operating segments—Cash, Equity Securities and Financial Derivatives, Commodities, and Data and Connectivity—based on internal management reports reviewed by the chief operating decision maker, with EBITDA used to assess segment performance; in H1 2025, all segments achieved revenue growth, with the Cash segment contributing the most to EBITDA - The Group's operating segments include: Cash, Equity Securities and Financial Derivatives, Commodities, and Data and Connectivity[14](index=14&type=chunk)[15](index=15&type=chunk) - The chief operating decision maker assesses the performance of each operating segment based on its EBITDA[16](index=16&type=chunk) H1 2025 Segment Revenue and EBITDA Performance | Segment | Revenue (HKD Million) | Revenue Share (%) | EBITDA (HKD Million) | EBITDA Share (%) | | :--- | :--- | :--- | :--- | :--- | | Cash | 6,502 | 58.9% | 6,063 | 55.4% | | Equity Securities and Financial Derivatives | 2,010 | 18.2% | 2,932 | 26.8% | | Commodities | 1,411 | 12.8% | 797 | 7.3% | | Data and Connectivity | 1,103 | 10.0% | 895 | 8.2% | | Corporate Items | 8 | 0.1% | 252 | 2.3% | | **Group Total** | **11,034** | **100%** | **10,939** | **100%** | H1 2025 Segment Revenue and EBITDA YoY Change | Segment | 2025 Revenue (HKD Million) | 2024 Revenue (HKD Million) | Revenue YoY Change (%) | 2025 EBITDA (HKD Million) | 2024 EBITDA (HKD Million) | EBITDA YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash | 6,502 | 4,005 | 62.3% | 6,063 | 3,505 | 73.0% | | Equity Securities and Financial Derivatives | 2,010 | 1,704 | 18.0% | 2,932 | 2,494 | 17.6% | | Commodities | 1,411 | 1,299 | 8.6% | 797 | 816 | -2.3% | | Data and Connectivity | 1,103 | 1,045 | 5.6% | 895 | 840 | 6.5% | | Corporate Items | 8 | 9 | -11.1% | 252 | 6 | Significant growth | [Note 4 Transaction and Trading System Usage Fees](index=12&type=section&id=Note%204%20Transaction%20and%20Trading%20System%20Usage%20Fees) For the six months ended June 30, 2025, total transaction and trading system usage fees significantly increased, primarily driven by a substantial rise in equity securities transaction fees traded on SEHK and through Stock Connect, with derivative warrants, callable bull/bear contracts, and warrants also showing significant growth - Total transaction and trading system usage fees increased by **49.1%** from HKD **3,290 million** in 2024 to HKD **4,906 million** in 2025[18](index=18&type=chunk) - Transaction fees for equity securities traded on SEHK and through Stock Connect increased by **99.6%** from HKD **1,424 million** in 2024 to HKD **2,842 million** in 2025[18](index=18&type=chunk) Composition of Transaction and Trading System Usage Fees | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Equity securities traded on SEHK and through Stock Connect | 2,842 | 1,424 | 99.6% | | Derivative warrants, callable bull/bear contracts and warrants traded on SEHK | 307 | 187 | 64.2% | | Futures and options contracts traded on SEHK and HKFE | 991 | 954 | 3.9% | | Commodity contracts traded on LME and Qianhai Mercantile Exchange | 766 | 725 | 5.7% | | **Total** | **4,906** | **3,290** | **49.1%** | [Note 5 Net Investment Income](index=12&type=section&id=Note%205%20Net%20Investment%20Income) For the six months ended June 30, 2025, net investment income increased, primarily due to higher total interest income from financial assets measured at amortized cost and financial assets measured at fair value through other comprehensive income, which offset net foreign exchange swap losses - Net investment income increased by **14.0%** from HKD **2,521 million** in 2024 to HKD **2,875 million** in 2025[19](index=19&type=chunk) - Total interest income from financial assets measured at amortized cost was HKD **3,605 million** (2024: HKD **4,800 million**), and total interest income from financial assets measured at fair value through other comprehensive income was HKD **1,125 million** (2024: HKD **613 million**)[19](index=19&type=chunk) - Net foreign exchange swap losses were HKD **89 million** (2024: HKD **81 million**), offset by interest income from higher-yielding deposits[19](index=19&type=chunk) Composition of Net Investment Income | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total interest income from financial assets measured at amortized cost | 3,605 | 4,800 | -24.9% | | Total interest income from financial assets measured at fair value through other comprehensive income | 1,125 | 613 | 83.5% | | Interest returned to participants | (2,121) | (3,015) | -29.7% | | **Net interest income** | **2,609** | **2,398** | **8.8%** | | Net gains/(losses) from financial assets measured at fair value through other comprehensive income | 72 | - | N/A | | Net gains/(losses) from financial assets mandatorily measured at fair value and derivative financial instruments | 122 | 120 | 1.7% | | Other exchange differences | 72 | 3 | 2300.0% | | **Net investment income** | **2,875** | **2,521** | **14.0%** | [Note 6 Transaction Related Expenses](index=13&type=section&id=Note%206%20Transaction%20Related%20Expenses) Transaction-related expenses, including license fees, bank charges, and other costs directly varying with trading and settlement activities, slightly decreased this period - Transaction-related expenses include license fees, bank charges, and other costs directly varying with trading and settlement activities[20](index=20&type=chunk) - For the six months ended June 30, 2025, transaction-related expenses were HKD **164 million**, slightly lower than HKD **166 million** in 2024[4](index=4&type=chunk) [Note 7 Employee Costs and Related Expenses](index=13&type=section&id=Note%207%20Employee%20Costs%20and%20Related%20Expenses) For the six months ended June 30, 2025, employee costs and related expenses slightly increased, primarily driven by growth in salaries and other short-term employee benefits and termination benefits, while share-based employee compensation benefits decreased - Total employee costs and related expenses increased by **0.8%** from HKD **1,937 million** in 2024 to HKD **1,952 million** in 2025[21](index=21&type=chunk) - Salaries and other short-term employee benefits increased from HKD **1,592 million** in 2024 to HKD **1,604 million** in 2025, while share-based employee compensation benefits decreased from HKD **206 million** to HKD **190 million**[21](index=21&type=chunk) Composition of Employee Costs and Related Expenses | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries and other short-term employee benefits | 1,604 | 1,592 | 0.8% | | Share-based employee compensation benefits under HKEX Share Award Scheme | 190 | 206 | -7.8% | | Termination benefits | 32 | 18 | 77.8% | | Retirement benefit expenses | 126 | 121 | 4.1% | | **Total** | **1,952** | **1,937** | **0.8%** | [Note 8 Finance Costs](index=13&type=section&id=Note%208%20Finance%20Costs) For the six months ended June 30, 2025, finance costs decreased, primarily due to a reduction in interest on lease liabilities and negative interest on JPY deposits - Total finance costs decreased by **17.0%** from HKD **59 million** in 2024 to HKD **49 million** in 2025[22](index=22&type=chunk) - Interest on lease liabilities decreased from HKD **28 million** in 2024 to HKD **22 million** in 2025, and negative interest on JPY deposits decreased from HKD **3 million** to HKD **0 million**[22](index=22&type=chunk) Composition of Finance Costs | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest on borrowings | 2 | 2 | 0.0% | | Interest on lease liabilities | 22 | 28 | -21.4% | | Bank facility commitment fees | 25 | 26 | -3.8% | | Negative interest on JPY deposits | - | 3 | -100.0% | | **Total** | **49** | **59** | **-17.0%** | [Note 9 Taxation](index=14&type=section&id=Note%209%20Taxation) For the six months ended June 30, 2025, tax expenses significantly increased, primarily due to the recognition of Hong Kong minimum top-up tax, leading to a substantial rise in Hong Kong profits tax and total current tax; the Group is objecting to additional tax assessment notices regarding offshore profit exemption for Stock Connect transactions - Total tax expenses increased by **109.1%** from HKD **766 million** in 2024 to HKD **1,602 million** in 2025[23](index=23&type=chunk) - Hong Kong minimum top-up tax was HKD **363 million** (2024: zero), as the effective tax rate for Hong Kong entities was below 15%[23](index=23&type=chunk) - The Group is objecting to additional tax assessment notices issued by the Hong Kong Inland Revenue Department regarding offshore profit exemption for Stock Connect transactions[24](index=24&type=chunk) Composition of Tax Expenses | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 1,047 | 611 | 71.4% | | Hong Kong minimum top-up tax | 363 | - | N/A | | Taxation outside Hong Kong | 174 | 179 | -2.8% | | **Total current tax** | **1,584** | **790** | **100.5%** | | Deferred tax | 18 | (24) | Significant change | | **Tax expenses** | **1,602** | **766** | **109.1%** | [Note 10 Earnings Per Share](index=15&type=section&id=Note%2010%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share significantly increased, reflecting strong performance in profit attributable to shareholders - Basic earnings per share increased by **39.2%** from HKD **4.84** in 2024 to HKD **6.74** in 2025[25](index=25&type=chunk) - Diluted earnings per share increased by **39.1%** from HKD **4.83** in 2024 to HKD **6.72** in 2025[26](index=26&type=chunk) Earnings Per Share Data | Metric | As of June 30, 2025 | As of June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to shareholders (HKD Million) | 8,519 | 6,125 | 39.1% | | Weighted average number of shares outstanding less shares held for share award scheme (thousand shares) | 1,263,911 | 1,264,558 | -0.1% | | **Basic earnings per share (HKD)** | **6.74** | **4.84** | **39.2%** | | Weighted average number of shares for diluted earnings per share (thousand shares) | 1,267,621 | 1,267,742 | -0.01% | | **Diluted earnings per share (HKD)** | **6.72** | **4.83** | **39.1%** | [Note 11 Dividends](index=15&type=section&id=Note%2011%20Dividends) As of June 30, 2025, declared interim dividends significantly increased, reflecting the company's enhanced profitability - Interim dividend declared as of June 30 was HKD **6.00** per share (2024: HKD **4.36** per share), totaling HKD **7,607 million** (2024: HKD **5,528 million**), an increase of **37.6%**[27](index=27&type=chunk) Interim Dividend Declaration | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interim dividend declared as of June 30 | 7,607 | 5,528 | 37.6% | | Less: Dividends on shares held for share award scheme as of June 30 | (24) | (15) | 60.0% | | **Total** | **7,583** | **5,513** | **37.6%** | [Note 12 Financial Assets](index=16&type=section&id=Note%2012%20Financial%20Assets) As of June 30, 2025, the Group's total financial assets significantly increased, primarily driven by higher cash and cash equivalents for margins and corporate funds, as well as financial assets measured at amortized cost; financial assets are held for specific purposes, and some cannot be used to fund other Group activities - Total financial assets increased by **14.6%** from HKD **303,984 million** as of December 31, 2024, to HKD **348,366 million** as of June 30, 2025[28](index=28&type=chunk) - Financial assets for margins increased by **31.1%** from HKD **168,455 million** as of December 31, 2024, to HKD **220,792 million** as of June 30, 2025[28](index=28&type=chunk) - Certain cash and cash equivalents (e.g., margins, clearing house funds, A-share cash) are held for specific purposes and cannot be used to fund other Group activities[29](index=29&type=chunk) Composition of Financial Assets | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 173,897 | 134,365 | 29.4% | | Financial assets measured at fair value through profit or loss | 2,842 | 7,558 | -62.4% | | Financial assets measured at fair value through other comprehensive income | 44,117 | 50,704 | -12.9% | | Financial assets measured at amortized cost | 68,662 | 43,610 | 57.4% | | Derivative financial instruments | 58,848 | 67,747 | -13.0% | | **Total** | **348,366** | **303,984** | **14.6%** | [Note 13 Derivative Financial Instruments](index=18&type=section&id=Note%2013%20Derivative%20Financial%20Instruments) As of June 30, 2025, the Group's derivative financial assets and liabilities primarily consisted of base and ferrous metal futures and options contracts cleared by LME Clear, with their fair values decreasing; the Group uses forward foreign exchange contracts and foreign exchange swaps for cash flow hedging and optimizing foreign currency cash flows - Total derivative financial assets decreased by **13.0%** from HKD **67,747 million** as of December 31, 2024, to HKD **58,848 million** as of June 30, 2025[30](index=30&type=chunk) - Total derivative financial liabilities decreased by **13.1%** from HKD **67,863 million** as of December 31, 2024, to HKD **58,920 million** as of June 30, 2025[30](index=30&type=chunk) - The fair value of base and ferrous metal futures and options contracts cleared by LME Clear was HKD **58,781 million** for both assets and liabilities (December 31, 2024: HKD **67,629 million**)[30](index=30&type=chunk) Overview of Derivative Financial Instruments | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | **Derivative Financial Assets** | | | | | Base and ferrous metal futures and options contracts cleared through LME Clear | 58,781 | 67,629 | -13.0% | | Forward foreign exchange contracts | 37 | - | N/A | | Foreign exchange swaps | 30 | 118 | -74.6% | | **Total (Assets)** | **58,848** | **67,747** | **-13.0%** | | **Derivative Financial Liabilities** | | | | | Base and ferrous metal futures and options contracts cleared through LME Clear | 58,781 | 67,629 | -13.0% | | Forward foreign exchange contracts | - | 60 | -100.0% | | Foreign exchange swaps | 139 | 174 | -20.2% | | **Total (Liabilities)** | **58,920** | **67,863** | **-13.1%** | [Note 14 Accounts Receivable, Prepayments and Deposits](index=19&type=section&id=Note%2014%20Accounts%20Receivable%2C%20Prepayments%20and%20Deposits) As of June 30, 2025, total accounts receivable, prepayments, and deposits slightly decreased, primarily due to a reduction in settlement reserve funds and clearing margins held by ChinaClear, though accounts receivable for continuous net settlement and prepayments for the acquisition of HKEX headquarters property increased - Total accounts receivable, prepayments, and deposits decreased by **5.2%** from HKD **54,497 million** as of December 31, 2024, to HKD **51,681 million** as of June 30, 2025[33](index=33&type=chunk) - Settlement reserve funds and clearing margins held by ChinaClear decreased from HKD **19,814 million** as of December 31, 2024, to HKD **13,312 million** as of June 30, 2025[33](index=33&type=chunk) - Prepayments for the acquisition of HKEX headquarters property were HKD **754 million** (December 31, 2024: zero)[33](index=33&type=chunk) Composition of Accounts Receivable, Prepayments and Deposits | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Accounts receivable for continuous net settlement | 33,840 | 31,813 | 6.4% | | Transaction levies, stamp duty and fees receivable | 1,619 | 1,083 | 49.5% | | Settlement reserve funds and clearing margins held by ChinaClear | 13,312 | 19,814 | -32.8% | | Inter-CCP margins held by Shanghai Clearing House | 502 | 828 | -39.4% | | Prepayments for acquisition of HKEX headquarters property | 754 | - | N/A | | Other accounts receivable, prepayments and deposits | 1,061 | 959 | 10.6% | | **Total** | **51,681** | **54,497** | **-5.2%** | [Note 15 Acquisition of HKEX Headquarters Property](index=19&type=section&id=Note%2015%20Acquisition%20of%20HKEX%20Headquarters%20Property) In April 2025, the Group agreed to acquire the HKEX headquarters property for HKD **6.3 billion**, obtaining partial possession and recognizing right-of-use assets and property, plant, and equipment; this transaction resulted in a lease modification and a one-off gain of HKD **76 million** - The Group agreed to acquire the HKEX headquarters property for a total consideration of HKD **6.3 billion**[34](index=34&type=chunk) - As of June 30, 2025, partial possession of the property was obtained, and HKD **1.718 billion** in land lease right-of-use assets, HKD **34 million** in property right-of-use assets, and HKD **53 million** in leasehold improvements (property, plant, and equipment) were recognized[34](index=34&type=chunk) - A one-off gain of HKD **76 million** from lease modification was recognized and included in miscellaneous income[34](index=34&type=chunk) [Note 16 Right-of-Use Assets](index=20&type=section&id=Note%2016%20Right-of-Use%20Assets) As of June 30, 2025, total right-of-use assets significantly increased, primarily due to the recognition of substantial land lease and property right-of-use assets from the acquisition of HKEX headquarters property, partially offset by lease modifications and depreciation - Total right-of-use assets increased by **115.4%** from HKD **1,174 million** as of January 1, 2025, to HKD **2,529 million** as of June 30, 2025[36](index=36&type=chunk) - The acquisition of HKEX headquarters property resulted in an increase of HKD **1,718 million** in land lease right-of-use assets and HKD **34 million** in property right-of-use assets[36](index=36&type=chunk) Changes in Right-of-Use Assets | Category | January 1, 2025 (HKD Million) | Additions (HKD Million) | Lease Modifications (HKD Million) | Depreciation (HKD Million) | June 30, 2025 (HKD Million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Land leases | 15 | 1,718 | - | (1) | 1,732 | | Properties | 1,124 | 34 | (298) | (116) | 765 | | Information technology facilities | 31 | 4 | - | (6) | 29 | | Equipment and motor vehicles | 4 | - | - | (1) | 3 | | **Total** | **1,174** | **1,756** | **(298)** | **(124)** | **2,529** | [Note 17 Margins, Mainland China Securities and Clearing Margins, and Cash Collateral from Participants](index=20&type=section&id=Note%2017%20Margins%2C%20Mainland%20China%20Securities%20and%20Clearing%20Margins%2C%20and%20Cash%20Collateral%20from%20Participants) As of June 30, 2025, total margin deposits, Mainland China securities and clearing margins, and cash collateral from participants significantly increased, primarily driven by substantial growth in margin deposits from Futures Clearing Corporation and SEHK Options Clearing House - Total increased by **24.2%** from HKD **188,857 million** as of December 31, 2024, to HKD **234,508 million** as of June 30, 2025[36](index=36&type=chunk) - Margin deposits from Futures Clearing Corporation clearing participants increased by **70.8%** from HKD **60,030 million** as of December 31, 2024, to HKD **102,513 million** as of June 30, 2025[36](index=36&type=chunk) - Margin deposits from SEHK Options Clearing House clearing participants increased by **93.3%** from HKD **16,906 million** as of December 31, 2024, to HKD **32,684 million** as of June 30, 2025[36](index=36&type=chunk) Composition of Margins and Cash Collateral from Participants | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Margin deposits from Futures Clearing Corporation clearing participants | 102,513 | 60,030 | 70.8% | | Margin deposits, Mainland China securities and clearing margins, and cash collateral from HKSCC clearing participants | 23,498 | 29,679 | -20.9% | | Margin deposits from LME Clear clearing participants | 62,264 | 65,788 | -5.4% | | Margin deposits from OTC Clearing clearing participants | 13,258 | 15,699 | -15.5% | | Inter-CCP margins provided by Shanghai Clearing House to OTC Clearing | 291 | 755 | -61.4% | | Margin deposits from SEHK Options Clearing House clearing participants | 32,684 | 16,906 | 93.3% | | **Total** | **234,508** | **188,857** | **24.2%** | [Note 18 Accounts Payable, Accruals and Other Liabilities](index=21&type=section&id=Note%2018%20Accounts%20Payable%2C%20Accruals%20and%20Other%20Liabilities) The Group's accounts payable, accruals, and other liabilities primarily consist of accounts payable for continuous net settlement, with most due within two days after the trade date - Accounts payable for continuous net settlement accounted for **87%** of total accounts payable, accruals, and other liabilities (December 31, 2024: **90%**)[37](index=37&type=chunk) - Most accounts payable, accruals, and other liabilities are due within three months[37](index=37&type=chunk) [Note 19 Clearing House Funds](index=21&type=section&id=Note%2019%20Clearing%20House%20Funds) As of June 30, 2025, total clearing house funds increased, primarily driven by higher cash contributions from clearing participants, with the OTC Clearing Interest Rate and Foreign Exchange Guarantee Fund showing significant growth - Total clearing house funds increased by **5.8%** from HKD **28,714 million** as of December 31, 2024, to HKD **30,378 million** as of June 30, 2025[38](index=38&type=chunk) - Cash contributions from clearing participants increased from HKD **27,124 million** as of December 31, 2024, to HKD **28,631 million** as of June 30, 2025[38](index=38&type=chunk) - The OTC Clearing Interest Rate and Foreign Exchange Guarantee Fund increased by **39.0%** from HKD **6,056 million** as of December 31, 2024, to HKD **8,413 million** as of June 30, 2025[38](index=38&type=chunk) Composition of Clearing House Funds | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash contributions from clearing participants | 28,631 | 27,124 | 5.6% | | Contributions to OTC Clearing Interest Rate and Foreign Exchange Guarantee Resources | 156 | 156 | 0.0% | | Clearing house fund reserves | 1,591 | 1,434 | 10.9% | | **Total** | **30,378** | **28,714** | **5.8%** | | **Comprising Funds:** | | | | | Futures Clearing Corporation Reserve Fund | 4,541 | 6,074 | -25.3% | | HKSCC Guarantee Fund | 6,399 | 6,382 | 0.3% | | LME Clear Reserve Fund | 8,736 | 8,728 | 0.1% | | OTC Clearing Interest Rate and Foreign Exchange Guarantee Fund | 8,413 | 6,056 | 39.0% | | OTC Clearing Interest Rate and Foreign Exchange Guarantee Resources | 193 | 191 | 1.0% | | SEHK Options Clearing House Reserve Fund | 2,096 | 1,283 | 63.4% | [Note 20 Borrowings](index=22&type=section&id=Note%2020%20Borrowings) As of June 30, 2025, total borrowings decreased, primarily due to dividend payments by OTC Clearing to non-controlling interests, resulting in a corresponding reduction in the put option amount - Total borrowings decreased by **12.6%** from HKD **452 million** as of December 31, 2024, to HKD **395 million** as of June 30, 2025[39](index=39&type=chunk) - OTC Clearing paid dividends of HKD **59 million** to non-controlling interests, resulting in a corresponding reduction in the put option amount[39](index=39&type=chunk) Composition of Borrowings | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Put option granted to non-controlling interests | 395 | 452 | -12.6% | | - Non-current liabilities | 52 | 70 | -25.7% | | - Current liabilities | 343 | 382 | -10.2% | [Note 21 Share Capital and Shares Held for Share Award Scheme](index=22&type=section&id=Note%2021%20Share%20Capital%20and%20Shares%20Held%20for%20Share%20Award%20Scheme) As of June 30, 2025, issued share capital remained stable, while the number of shares held for the share award scheme slightly decreased, reflecting the combined impact of share grants and share purchases - Issued and fully paid ordinary share capital was HKD **31,955 million**, consistent with December 31, 2024[40](index=40&type=chunk) - Shares held for the share award scheme decreased from HKD **1,125 million** as of December 31, 2024, to HKD **1,122 million** as of June 30, 2025[40](index=40&type=chunk) - For the six months ended June 30, 2025, the share award scheme purchased **53,767** HKEX shares from the open market for a total of HKD **19 million**, and granted **63,479** HKEX shares at a total cost of HKD **22 million**[40](index=40&type=chunk) Share Capital and Shares Held for Share Award Scheme | Category | January 1, 2025 (HKD Million) | June 30, 2025 (HKD Million) | Change (HKD Million) | | :--- | :--- | :--- | :--- | | Share capital | 31,955 | 31,955 | 0 | | Shares held for share award scheme | (1,125) | (1,122) | 3 | | **Total** | **30,830** | **30,833** | **3** | [Note 22 Employee Share Arrangements](index=23&type=section&id=Note%2022%20Employee%20Share%20Arrangements) The Group uses a share award scheme as an employee benefit, granting shares to employees; for the six months ended June 30, 2025, over **1.44 million** shares were awarded, with some being re-granted forfeited or unallocated shares - The Group uses a share award scheme as an employee benefit, granting shares to Group employees (including executive directors)[41](index=41&type=chunk) - For the six months ended June 30, 2025, a total of **1,441,003** shares were awarded under the employee share award scheme (March 7, 2025), with an average fair value of HKD **301.44** per share[41](index=41&type=chunk) - Of these, **37,239** shares were re-granted forfeited or unallocated shares, and **74,543** shares were awarded to the HKEX Group Chief Executive[41](index=41&type=chunk)[42](index=42&type=chunk) [Note 23 Set-Aside Reserves](index=23&type=section&id=Note%2023%20Set-Aside%20Reserves) As of June 30, 2025, total set-aside reserves increased, primarily driven by growth in clearing house fund reserves - Total set-aside reserves increased by **10.8%** from HKD **1,451 million** as of December 31, 2024, to HKD **1,608 million** as of June 30, 2025[43](index=43&type=chunk) - Clearing house fund reserves increased from HKD **1,434 million** as of December 31, 2024, to HKD **1,591 million** as of June 30, 2025[43](index=43&type=chunk)[44](index=44&type=chunk) Composition of Set-Aside Reserves | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Clearing house fund reserves | 1,591 | 1,434 | 10.9% | | China statutory reserves | 17 | 17 | 0.0% | | **Total** | **1,608** | **1,451** | **10.8%** | [Note 24 Notes to the Condensed Consolidated Cash Flow Statement](index=24&type=section&id=Note%2024%20Notes%20to%20the%20Condensed%20Consolidated%20Cash%20Flow%20Statement) This note provides a reconciliation of profit before tax to net cash inflow from operating activities and an analysis of changes in financing liabilities; the significant increase in net cash inflow from operating activities reflects the strong cash-generating capability of core businesses - Net cash inflow from operating activities (non-HKFRS measure) increased by **72.1%** from HKD **5,852 million** in 2024 to HKD **10,069 million** in 2025[45](index=45&type=chunk) - The reconciliation of profit before tax to net cash inflow from operating activities shows that the net increase in margin financial assets and liabilities had a significant impact on cash flow[45](index=45&type=chunk) Reconciliation of Net Cash Inflow from Operating Activities | Adjustment Item | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | | :--- | :--- | :--- | | Profit before tax | 10,164 | 6,952 | | Net interest income | (2,609) | (2,398) | | Finance costs | 49 | 59 | | Depreciation and amortisation | 743 | 698 | | Net increase in margin financial assets | (45,517) | (15,877) | | Net increase in margin financial liabilities | 45,651 | 15,882 | | (Increase)/decrease in accounts receivable, prepayments and deposits | (2,542) | 7,898 | | Increase/(decrease) in other liabilities | 1,774 | (2,022) | | **Net cash inflow from operating activities** | **9,135** | **4,990** | | Interest received on short-term debt securities, time deposits and cash and cash equivalents | 3,844 | 4,763 | | Interest paid to participants | (2,121) | (3,015) | | Income tax paid | (753) | (805) | | **Net cash inflow from operating activities (non-HKFRS measure)** | **10,069** | **5,852** | Reconciliation of Financing Liabilities | Category | Borrowings (H1 2025) (HKD Million) | Borrowings (H1 2024) (HKD Million) | Lease Liabilities (H1 2025) (HKD Million) | Lease Liabilities (H1 2024) (HKD Million) | | :--- | :--- | :--- | :--- | :--- | | As of January 1 | 452 | 447 | 1,294 | 1,604 | | Additions to leases | - | - | 24 | 120 | | Lease modifications/revaluations | - | - | (324) | (181) | | Cash flow (payments) | (59) | - | (155) | (158) | | As of June 30 | 395 | 449 | 873 | 1,412 | [Note 25 Capital Expenditure and Commitments](index=25&type=section&id=Note%2025%20Capital%20Expenditure%20and%20Commitments) For the six months ended June 30, 2025, the Group's capital expenditure significantly increased, primarily due to the acquisition of HKEX headquarters property; future capital expenditure commitments also substantially grew, mainly concentrated on headquarters property, property, plant, and equipment, and intangible assets - For the six months ended June 30, 2025, the Group's capital expenditure was HKD **2.657 billion** (2024: HKD **612 million**), with HKD **1.805 billion** used for the acquisition of HKEX headquarters property[47](index=47&type=chunk) - As of June 30, 2025, contracted but unprovided capital expenditure commitments were HKD **4,201 million** (December 31, 2024: HKD **222 million**), primarily including HKD **4,009 million** for the HKEX headquarters property[47](index=47&type=chunk) Capital Expenditure Commitments | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | **Contracted but unprovided:** | | | | | - HKEX headquarters property | 4,009 | - | N/A | | - Other property, plant and equipment | 16 | 26 | -38.5% | | - Intangible assets | 176 | 196 | -10.2% | | **Approved but not contracted:** | | | | | - Property, plant and equipment | 980 | 662 | 48.0% | | - Intangible assets | 651 | 818 | -20.4% | | **Total** | **5,832** | **1,702** | **242.7%** | [Note 26 Contingent Liabilities](index=26&type=section&id=Note%2026%20Contingent%20Liabilities) As of June 30, 2025, the Group has several contingent liabilities, including potential requirements by the SFC to replenish compensation funds, indemnity undertakings to the Collector of Stamp Revenue, and commitments for HKSCC's winding-up liabilities - May be required by the SFC to replenish the Unified Exchange Compensation Fund, involving an amount not exceeding HKD **71 million**[49](index=49&type=chunk) - Undertaking to indemnify the Collector of Stamp Revenue for underpaid stamp duty by participants, with a maximum total liability of HKD **104 million**[49](index=49&type=chunk) - Commitment to bear HKSCC's winding-up liabilities and costs, limited to HKD **50 million**[49](index=49&type=chunk) [Note 27 Significant Related Party Transactions](index=26&type=section&id=Note%2027%20Significant%20Related%20Party%20Transactions) This note discloses key management personnel compensation; for the six months ended June 30, 2025, total key management personnel compensation decreased, primarily due to a reduction in share-based employee compensation benefits - Total key management personnel compensation decreased by **10.1%** from HKD **179 million** in 2024 to HKD **161 million** in 2025[48](index=48&type=chunk) - Share-based employee compensation benefits decreased from HKD **87 million** in 2024 to HKD **55 million** in 2025[48](index=48&type=chunk) Key Management Personnel Compensation | Category | As of June 30, 2025 (HKD Million) | As of June 30, 2024 (HKD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Salaries and other short-term employee benefits | 100 | 87 | 14.9% | | Share-based employee compensation benefits | 55 | 87 | -36.8% | | Retirement benefit expenses | 6 | 5 | 20.0% | | **Total** | **161** | **179** | **-10.1%** | [Note 28 Assets Charged](index=27&type=section&id=Note%2028%20Assets%20Charged) LME Clear receives securities and gold as non-cash collateral from clearing participants and holds securities as collateral for overnight tri-party reverse repurchase agreements; these non-cash collaterals are not recorded in the Group's condensed consolidated statement of financial position, but some have been re-pledged to investment agents, custodians, and banks - The fair value of non-cash collateral received by LME Clear totaled USD **2.702 billion** (HKD **21.211 billion**), used for margins submitted by clearing participants[50](index=50&type=chunk) - LME Clear holds securities as collateral for overnight tri-party reverse repurchase agreements, with a fair value of USD **7.311 billion** (HKD **57.391 billion**)[51](index=51&type=chunk) - These non-cash collaterals are not recorded in the Group's condensed consolidated statement of financial position[52](index=52&type=chunk) [Note 29 Capital Management](index=27&type=section&id=Note%2029%20Capital%20Management) As of June 30, 2025, the Group allocated HKD **4 billion** from shareholders' funds to support the risk management systems of its clearing houses, with HKD **2.16 billion** injected as capital into HKSCC, SEHK Options Clearing House, and Futures Clearing Corporation - The Group allocated HKD **4 billion** (December 31, 2024: HKD **4 billion**) from shareholders' funds to support the risk management systems of its clearing houses[53](index=53&type=chunk) - Of this, HKD **2.16 billion** (December 31, 2024: HKD **2.16 billion**) was injected as capital into HKSCC, SEHK Options Clearing House, and Futures Clearing Corporation[53](index=53&type=chunk) [Note 30 Fair Value of Financial Assets and Liabilities](index=28&type=section&id=Note%2030%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) This note discloses the classification of financial assets and liabilities measured at fair value and details the valuation methods for Level 3 investments (e.g., equity interests in Fusion Bank, Huakong Qingjiao, Guangzhou Futures Exchange); the carrying amounts of short-term financial assets and liabilities approximate their fair values - Financial assets and liabilities are classified by fair value hierarchy levels (Level 1, 2, 3), with Level 1 using quoted prices in active markets, Level 2 using observable market data, and Level 3 using unobservable data[54](index=54&type=chunk)[56](index=56&type=chunk) - The Group holds unlisted equity interests in Fusion Bank Limited, Huakong Qingjiao Information Technology (Beijing) Co., Ltd., and Guangzhou Futures Exchange, which are classified as Level 3 investments[57](index=57&type=chunk)[58](index=58&type=chunk) - The total fair value of Level 3 investments was HKD **334 million** (December 31, 2024: HKD **329 million**), estimated using market approach[58](index=58&type=chunk) Financial Assets and Liabilities Measured at Fair Value | Category | June 30, 2025 (HKD Million) | December 31, 2024 (HKD Million) | | :--- | :--- | :--- | | **Financial Assets** | | | | Financial assets measured at fair value (Total) | 47,359 | 58,262 | | Derivative financial instruments (Total) | 58,848 | 67,747 | | **Total (Assets)** | **106,207** | **126,009** | | **Financial Liabilities** | | | | Derivative financial instruments (Total) | 58,920 | 67,863 | | **Total (Liabilities)** | **58,920** | **67,863** | Fair Value of Financial Assets and Liabilities Not Measured at Fair Value | Category | June 30, 2025 (Carrying Amount) (HKD Million) | June 30, 2025 (Fair Value) (HKD Million) | December 31, 2024 (Carrying Amount) (HKD Million) | December 31, 2024 (Fair Value) (HKD Million) | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Financial assets measured at amortized cost: Debt securities due after one year | 1,411 | 1,459 | 1,439 | 1,443 | | Financial assets measured at amortized cost: Other financial assets due after one year | 78 | 65 | 89 | 67 | | **Liabilities** | | | | | | Borrowings: Put option granted to non-controlling interests | 395 | 402 | 452 | 455 | | Financial guarantee provided to Collector of Stamp Revenue | 20 | 43 | 20 | 35 |

智通财经APP获悉，摩根士丹利发布研报称，截至8月19日，港股年初至今的日均成交额为2,440亿港 元，对比2023及2024年同期分别为1,050亿及1,320亿港元。大摩维持对香港交易所(00388)"增持"评级， 看好盈利持续上行潜力，目标价为500港元。 港交所第二季净利润同比增长41%至44.4亿港元，较大摩 及市场预期分别高出7%及8%，主要受惠于较佳的净投资收入及租约调整收益，核心业务一如预期增长 强劲，第二季日均成交额同比增长95%至2,380亿港元，主要受到南向交易的推动，至7月份日均成交额 更高达2,630亿港元。 该信息由智通财经网提供 ...

摩根士丹利发布研报称，截至8月19日，港股年初至今的日均成交额为2,440亿港元，对比2023及2024年 同期分别为1,050亿及1,320亿港元。大摩维持对香港交易所(00388)"增持"评级，看好盈利持续上行潜 力，目标价为500港元。 港交所第二季净利润同比增长41%至44.4亿港元，较大摩及市场预期分别高出7%及8%，主要受惠于较 佳的净投资收入及租约调整收益，核心业务一如预期增长强劲，第二季日均成交额同比增长95%至 2,380亿港元，主要受到南向交易的推动，至7月份日均成交额更高达2,630亿港元。 ...

Group 1 - Morgan Stanley's shareholding in Hong Kong increased from 6.97% to 7.01% as of August 15 [2] - The average share price during this period was 436.4319 HKD [2]