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    388   HK0388045442

HONG KONG EXCHANGES AND CLEARING LIMITED

(388)
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Delayed Hong Kong Stock Exchange  -  04:08 2022-06-24 am EDT
374.20 HKD   +4.12%
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Hong Kong Exchanges and Clearing : HKEX 2022 First Quarter Resultspdf

04/27/2022 | 12:15am EDT

Pursuant to Chapter 38 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission regulates Hong Kong Exchanges and Clearing Limited in relation to the listing of its shares on The Stock Exchange of Hong Kong Limited. The Securities and Futures Commission takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 388)

(Financial figures in this announcement are expressed in Hong Kong dollar (HKD) unless otherwise stated)

QUARTERLY RESULTS

FOR THE THREE MONTHS ENDED 31 MARCH 2022

HIGHLIGHTS

Nicolas Aguzin, Chief Executive Officer said:

"Throughout Q1 2022, HKEX demonstrated its robustness and resiliency despite ongoing market volatility and geopolitical fragility. Cash Market trading volumes remained at long-term normalised levels, our IPO pipeline was incredibly strong, we welcomed a range of new products such as our first SPAC listing and a number of new thematic ETFs, and we announced some important market-enhancing initiatives such as Derivatives Holiday Trading and IR Connect. However, we were not immune to global market sentiment which resulted in some softness in the IPO market, reduced valuations in our investment portfolio and pricing volatility in our commodities market. Looking forward, I am confident that we remain extremely well-placed, with a range of significant opportunities ahead. We have a strong team, a clear strategy and we are fully focused on delivering our vision to build the Marketplace of the Future."

Strategic Highlights

  • HKEX Corporate Day on 29 March outlined HKEX's vision and strategy, setting out a roadmap to build the Marketplace of the Future

  • Bond Connect Northbound ADT reached a record quarterly high of RMB33.9 billion

  • Special Purpose Acquisition Company (SPAC) listing route went live, and the first SPAC listed on 18 March 2022

  • IPO pipeline remains strong with over 150 active applications, including 10 SPAC applications, as at 31 March 2022

  • Derivatives Holiday Trading was announced in January and will commence on 9 May 2022

  • Q1 product launches included the first metaverse-themed ETF, first carbon futures ETF, and first Hong Kong equity ESG ETF

  • HKEX Foundation committed a further $10 million donation in support of Hong Kong Covid-19 pandemic relief programmes, and invited applications for its 2022 Impact Funding Scheme

Financial Highlights

  • Q1 2022 revenue and other income of $4,690 million was 21 per cent lower than record Q1 2021 (1 per cent lower than Q4 2021)

    • - Core business revenue was down 16 per cent against Q1 2021, reflecting lower trading and clearing fees driven by lower Headline ADT, and lower depository fees due to lower e-IPO service fees

    • - Net investment loss of Corporate Funds was $104 million (Q1 2021: income of $219 million), due to net fair value losses on collective investment schemes of $189 million (Q1 2021: gains of $159 million), reflecting lower global valuations in equity and fixed income markets

  • Operating expenses were 7 per cent higher than Q1 2021 (2 per cent lower than Q4 2021), attributable to higher staff costs and marketing expenses

  • EBITDA margin1 was 75 per cent, 6 per cent lower than record Q1 2021 (1 per cent higher than Q4 2021)

  • Profit attributable to shareholders was $2,668 million, 31 per cent lower than Q1 2021 (broadly flat against Q4 2021)

1

For the purposes of this announcement, EBITDA is defined as earnings before interest expenses and other finance costs, taxation, depreciation and amortisation. It excludes the Group's share of results of the joint ventures. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.

Key Financials

Q1 2022

Q1 2021

$m

$m

Change

Revenue and other income

Core business revenue

4,764

5,691

(16%)

HKEX Foundation donation income

30

46

(35%)

Net investment (loss)/income of Corporate Funds

(104)

219

N/A

4,690

5,956

(21%)

Operating expenses

1,178

1,102

7%

EBITDA

3,473

4,809

(28%)

Profit attributable to shareholders

2,668

3,840

(31%)

Capital expenditure

190

331

(43%)

Basic earnings per share

$2.11

$3.03

(30%)

Key Market Statistics

Q1 2022

Q1 2021

Change

ADT of equity products traded on the Stock Exchange 2 ($bn)

126.0

198.0

(36%)

ADT of DWs, CBBCs and warrants traded on the Stock Exchange ($bn)

20.5

26.4

(22%)

ADT traded on the Stock Exchange 2,3 (Headline ADT) ($bn)

146.5

224.4

(35%)

ADT of Northbound Trading of Stock Connect 2 (RMBbn)

105.9

126.8

(16%)

ADT of Southbound Trading of Stock Connect 2 ($bn)

35.5

60.8

(42%)

ADV of derivatives contracts traded on the Futures Exchange ('000 contracts)

705

584

21%

ADV of stock options contracts traded on the Stock Exchange ('000 contracts)

637

827

(23%)

Chargeable ADV of metals contracts traded on the LME 4 ('000 lots)

588

536

10%

ADT of Northbound Bond Connect (RMBbn)

33.9*

25.3

34%

* New record quarterly high in Q1 2022

  • 2 Includes buy and sell trades under Stock Connect

  • 3 ADT of Southbound Trading is included within Headline ADT.

  • 4 Chargeable ADV excludes administrative trades (Admin Trades) and other non-chargeable trades.

BUSINESS REVIEW

Overview

Fig. 1 - Market activity and Group's5 revenue and other income/(loss)

HKEX's Cash, Derivatives and Commodities businesses demonstrated their robustness and resiliency in Q1 2022, despite the resurgence of Covid-19 in Hong Kong and global geopolitical fragility. Headline ADT was $146.5 billion in Q1 2022, 35 per cent lower than the record Q1 2021, but 16 per cent higher than Q4 2021. Increased volatility and increased popularity of newly launched derivatives products resulted in solid growth in the number of derivatives contracts traded on HKFE in Q1 2022, with ADV 21 per cent higher than Q1 2021 and 39 per cent higher than Q4 2021. Commodities volume also registered moderate growth against Q1 2021 and Q4 2021, driven by the increase in volatility and commodity prices.

Revenue and other income for Q1 2022 was $4,690 million, 21 per cent lower than Q1 2021, due to lower trading and clearing fees from lower Headline ADT, and also net fair value losses on collective investment schemes of $189 million (Q1 2021: gains of $159 million), reflecting the broader performance of the global equity and fixed income markets. Compared with Q4 2021, revenue and other income in Q1 2022 was down marginally by 1 per cent, as the increase in trading and clearing fees from higher trading volumes was more than offset by the net fair value losses on collective investment schemes in Q1 2022.

Operating expenses increased by 7 per cent against Q1 2021, but were 2 per cent lower than Q4 2021. Compared with Q1 2021, the increase was mainly due to higher staff costs and higher marketing cash incentives for new products.

Looking forward, HKEX is fully focused on delivering its vision to build the Marketplace of the Future, by strengthening Hong Kong as an international financial centre, facilitating the vital two-way capital flows between East and West, delivering vibrant, diversified markets, supporting the creation of great companies and putting our clients first.

5

HKEX and its subsidiaries, which include The Stock Exchange of Hong Kong Limited (SEHK or the Stock Exchange), Hong Kong Futures Exchange Limited (HKFE or the Futures Exchange), Hong Kong Securities Clearing Company Limited (HKSCC), HKFE Clearing Corporation Limited (HKCC), The SEHK Options Clearing House Limited (SEOCH), OTC Clearing Hong Kong Limited (OTC Clear), The London Metal Exchange (LME), LME Clear Limited (LME Clear), Qianhai Mercantile Exchange Co., Ltd. (QME), BayConnect Technology Company Limited (BayConnect) and other subsidiaries

Analysis of Results and Business Update by Operating Segment

Revenue Transaction-Q1 2022

and other income $m

Revenue and other income lessrelated expenses $m

Results by segment:

Cash

Equity and Financial

Derivatives Commodities Post Trade Technology Corporate Items

1,379

transaction-related expenses EBITDA

$m

-

926

Q1 2021

Revenue and other income less

Revenue Transaction- transaction-

$m

and other income $mrelated related expenses expenses $m $mEBITDA $m

1,379

(36)

1,804

1,215

1,820

  • - 1,820 1,673

    890

    376

    702

    1,011

  • (33) 978 801

    - (3)

    4,690

    276

    376

    1,801

    - - (39)

    (71)

    276

    (71)

    4,651

    214

    361

  • - 361 197

    1,580

    2,248

  • (12) 2,236 2,009

    205

    248

    - - (45)

  • 248 180

    (443)

    268

  • 268 (51)

3,473

5,956

5,911

4,809

Cash Segment

Analysis of Results

Revenue was down 24 per cent and EBITDA was down 27 per cent compared with Q1 2021.

Trading fees decreased by $428 million, or 33 per cent compared with Q1 2021. This was attributable to the 36 per cent decrease in ADT of equity products traded on the Stock Exchange and the 16 per cent decrease in ADT of Northbound Trading of Stock Connect. Trading tariffs dropped by 21 per cent, driven by the decrease in equity products traded.

Stock Exchange listing fees increased by $22 million, mainly due to an increase in forfeitures.

Operating expenses increased by 12 per cent due to higher allocated costs of the Listing Division, reflecting the higher listing fees from forfeitures of initial public offerings (IPOs) and lower listing fees from derivative warrants (DWs) and callable bull/bear contracts (CBBCs).

Q1 2022 vs Q1 2021 ($m)

Q1 2022

Q1 2022

Q1 2021

Q1 2021

Q1 2022

Q1 2021

Trading feesMarket data fees

Trading tariffsOther revenueStock Exchange listing fees

1 Excludes DWs, CBBCs and warrants (which are included under the Equity and Financial Derivatives segment)

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

HKEx - Hong Kong Exchanges and Clearing Ltd. published this content on 27 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2022 04:14:03 UTC.


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Financials
Sales 2022 20 834 M 2 654 M 2 654 M
Net income 2022 12 390 M 1 579 M 1 579 M
Net cash 2022 50 183 M 6 393 M 6 393 M
P/E ratio 2022 38,3x
Yield 2022 2,29%
Capitalization 474 B 60 329 M 60 329 M
EV / Sales 2022 20,3x
EV / Sales 2023 15,6x
Nbr of Employees 2 146
Free-Float 94,1%
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Technical analysis trends HONG KONG EXCHANGES AND CLEARING LIMITED
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 30
Last Close Price 374,20 HKD
Average target price 424,06 HKD
Spread / Average Target 13,3%
EPS Revisions
Managers and Directors
Alejandro Nicolas Aguzin Chief Executive Officer & Executive Director
Bik Yun Lau Group Chief Financial Officer
May Lung Cha Non-Executive Chairman
Chung Kwong Leung Group Chief Technology Officer
Trevor William Spanner Group Chief Information Officer
Sector and Competitors