2022-04-27 04:00Financial Performance - In Q1 2022, the company's revenue and other income amounted to HKD 4.69 billion, a decrease of 21% compared to Q1 2021's record high of HKD 5.96 billion[6]. - The company reported a net investment loss of HKD 104 million in Q1 2022, compared to a gain of HKD 219 million in Q1 2021, reflecting a significant decline in global stock and fixed income market valuations[7]. - The company’s net profit attributable to shareholders was HKD 2.67 billion, a decrease of 31% compared to HKD 3.84 billion in Q1 2021[7]. - Total revenue and other income for Q1 2022 was HKD 4.69 billion, a decrease of 21% compared to Q1 2021, primarily due to reduced trading and settlement fees[11]. - The stock trading segment reported a revenue decline of 24% and EBITDA decline of 27% compared to Q1 2021[13]. - Revenue decreased by 9% to 978 million compared to Q1 2021, with EBITDA margin down 12% to 79%[18]. - The operating profit for Q1 2022 was HKD 3,119 million, down 30.5% from HKD 4,482 million in Q1 2021[51]. - Basic earnings per share for Q1 2022 were HKD 2.11, compared to HKD 3.03 in Q1 2021, reflecting a decline of 30.4%[51]. - The total comprehensive income for the three months ended March 31, 2022, was HKD 2,617 million, compared to HKD 3,872 million for the same period in 2021, representing a decrease of approximately 32.4%[52]. Trading Activity - The average daily trading amount for equity securities products was HKD 126 billion, down 36% from HKD 198 billion in the same period last year[9]. - The average daily trading value was HKD 146.5 billion, down 35% from Q1 2021 but up 16% from Q4 2021[11]. - The average daily trading amount for the Stock Connect program was RMB 105.9 billion, a decrease of 16% from RMB 126.8 billion in the previous year[9]. - The average daily trading amount in the Hong Kong stock market increased by 16% to HKD 146.5 billion compared to Q4 2021, but decreased by 35% compared to Q1 2021[14]. - The average daily trading volume of derivative contracts in Q1 2022 was 1,339,149 contracts, a 5% decrease year-on-year[19]. - The average daily trading volume of the Hang Seng Tech Index futures reached 52,944 contracts in Q1 2022, over 8 times the figure from Q1 2021[24]. - The average daily trading volume of currency derivatives, specifically USD/CNY futures, increased by 33% to 9,349 contracts in Q1 2022[24]. - The average daily turnover of structured products in Q1 2022 was HKD 20.5 billion, a decrease of 22% compared to Q1 2021, while the number of new listed structured products was 15,573, down 12%[25]. Market Developments - The number of new IPO applications in Hong Kong reached over 150 as of March 31, 2022, including 10 SPAC applications[5]. - The company launched several new products in Q1 2022, including the first metaverse-themed ETF and the first carbon futures ETF[5]. - The total fundraising amount from newly listed companies in Hong Kong in Q1 2022 was HKD 14.9 billion, a decrease of 89% compared to Q1 2021[14]. - The company aims to strengthen Hong Kong's position as an international financial center and enhance market diversity[11]. - The Hong Kong Stock Exchange plans to launch a new investor relations network platform, IR Connect, in Q3 2022 to enhance communication between issuers and global investors[15]. - The Hong Kong Stock Exchange continues to explore opportunities in digital finance and sustainable development, including partnerships in carbon finance and green bond projects[16]. Operating Expenses - Operating expenses increased by 7% year-on-year to HKD 1.18 billion, driven by higher employee and promotional costs[7]. - Operating expenses rose by 7% compared to Q1 2021, attributed to increased employee costs and cash incentives for new product promotions[11]. - Operating expenses increased by 6% due to cash incentives related to new products[18]. - The group's operating expenses for Q1 2022 totaled HKD 1,178 million, an increase from HKD 1,102 million in Q1 2021[51]. Investment and Assets - The investment in collective investment plans as of March 31, 2022, was 86 billion, a decrease of 2% from December 31, 2021[43]. - The group's capital expenditure for Q1 2022 was HKD 190 million, down from HKD 331 million in Q1 2021, primarily related to the development and enhancement of various trading and settlement systems[48]. - The group's total assets pledged as non-cash collateral amounted to USD 3.499 billion (HKD 274.02 billion) as of March 31, 2022, significantly up from USD 971 million (HKD 75.70 billion) on December 31, 2021[49]. - Cash and cash equivalents increased to HKD 264,525 million as of March 31, 2022, up from HKD 181,361 million as of December 31, 2021, reflecting a growth of approximately 46%[53]. - Total assets reached HKD 622,723 million as of March 31, 2022, compared to HKD 399,304 million as of December 31, 2021, indicating an increase of approximately 56%[53]. - Total liabilities amounted to HKD 575,416 million as of March 31, 2022, up from HKD 349,394 million as of December 31, 2021, which is an increase of approximately 64.7%[53]. Regulatory and Strategic Initiatives - The group has committed to promoting sustainable and green finance through the STAGE platform, enhancing communication with stakeholders[46]. - The group continues to monitor global geopolitical risks and their potential impacts on business continuity and regulatory assessments[46]. - The company adopted new/revised HKFRSs in 2022, which did not have any financial impact on the group[54]. - The estimated useful life of certain computer hardware and software was changed from three years to three to five years, resulting in a reduction of depreciation expense by HKD 8 million for the first quarter of 2022[54].