Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — Hong Kong Exch & Clearing — Q1 2022 Earnings Presentation
25 slides from Hong Kong Exchanges & Clearing's earnings presentation, Apr 27, 2022
Slide 1: 2022 Q1 Results Analyst Presentation
2022 Q1 Results Analyst Presentation Nicolas Aguzin Chief Executive Officer, HKEX Group Vanessa Lau Group Chief Financial Officer, HKEX Group 27 April 2022
Slide 2: Disclaimer
Disclaimer Q3 2021 Key Highlights The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or s
Slide 3: Agenda
Agenda 01 | Q1 2022 Key Highlights 02 | HKEX Group Financial Review 03 | Business and Strategic Update 04 | Appendix 3
Slide 4: Q1 2022 key highlights
Q1 2022 key highlights Financial Performance HK$4.7bn HK$0.6bn HK$2.7bn (-21%YoY) (-13%YoY) (-31%YoY) Revenue and other income, Stock Connect revenue Profit attributable to -1%QoQ and other income shareholders, broadly flat QoQ Business and Strategy Demonstrated robustness and resiliency despite o
Slide 5: HKEX Group Financial Review
HKEX Group Financial Revie vo
Slide 6: Q1 2022: Core business revenue higher than Q4 2021, but net profit impacted by investment loss
Q1 2022: Core business revenue higher than Q4 2021, but net profit impacted by investment loss Versus the record Q1 2021, core business revenue was 16% lower, and net profit was impacted by investment loss Core business revenue(2) $4.8bn Revenue and other income(3) $4.7bn 16% vs Q1 2021 21% vs Q1
Slide 7: Core business net profit was 23% lower, driven by 35% lower Headline ADT
Q1 2022 vs Q1 2021 Core business net profit was 23% lower, driven by 35% lower Headline ADT Revenue and Operating Profit attributable to HKEX EBITDA Basic earnings per share other income(1) expenses(2) shareholders(3) (HK$ mn) (HK$) Total Core business Total Core business Total Core business Total C
Slide 8: Net profit broadly flat as higher trading volumes were offset by lower net investment income
Q1 2022 vs Q4 2021 Net profit broadly flat as higher trading volumes were offset by lower net investment income Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ mn) Total Core business Total Core business Total Core business Total Core busines
Slide 9: Q1 2022 performance in line with long term trend
Quarterly performance Q1 2022 performance in line with long term trend Quarterly performance (HK$ mn) Profit attributable to shareholders Revenue and Other Income (1) Operating Expenses (2) 5,956 EBITDA 5,309 5,309 4,953 5,099 4,773 4,809 4,732 4,690 4,288 4,290 4,150 4,044 4,177 4,164 4,102 3,987 4
Slide 10: Net investment income impacted by market valuation
Net investment income – Q1 2022 vs Q1 2021 Net investment income impacted by market valuation Q1 2022: $59mn (Q1 2021: $418mn) Net investment income by funds Average fund size (HK$ mn) (HK$ bn) 286.0 Corporate Funds Corporate Funds Margin Clearing House 243.3 34.2 (External Portfolio) (Internal) Fun
Slide 11: Investments in talent, infrastructure and strategic initiatives
Operating expenses – Q1 2022 vs Q1 2021 Investments in talent, infrastructure and strategic initiatives Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Total opex(2) related expenses maintenance exp charitable donations expenses(1) a
Slide 12: Business and Strategic Update
Business and Strategic Update
Slide 13: Resilient Q1 performance
Resilient Q3 2021Q1 performance Key Highlightsin 2022 Core businesses remained at robust levels Global market comparison 140 HSI CSI 300 S&P 500 Cash Market ADT at HK$146.5bn (-35%YoY, or Average Daily Trading Volume – Hong Kong (HKD bn) +16%QoQ); resurgence of Covid-19 in HK and 130 geopolitical
Slide 14: Selected strategic highlights in Q1 2022
Q1 Q3 2022 2021selected strategic highlights Key Highlights Enhancing our listing framework Modernising our operations and infrastructure Special Purpose Acquisition Company (SPAC) Initiated an end-to-end review of the operating listing went live, and the first SPAC listed in Mar 2022 model of o
Slide 15: Three key strategic imperatives support our vision
Three key strategic imperatives support our vision… Build on our China Strength To connect, promote and progress our Build markets and the the Marketplace communities they of the Future Position Enhance support for the for the Market prosperity of all Future Vibrancy 15
Slide 16: With clear execution pillars and our values
…with clear execution pillars and our values Place our clients at the centre of Client Centricity everything we do Attract, develop, and engage the best talent; Integrity build a winning culture Talent and Excellence Operational Culture Collaboration Excellence Engagement Modernise our operations, s
Slide 17: Looking ahead
Looking Q3 2021ahead Key Highlights Cash Market trading volumes will continue to be affected by macro and geopolitical factors after an exceptionally buoyant Q1 2021 Macro-driven weak market sentiment continued to impact the IPO market, but the IPO pipeline remains strong, supported by Chinese c
Slide 18: Q1 2022 financial performance
Q1 2022 financial performance Core business revenue Revenue and other income 16%YoY 21%YoY ７%QoQ 1%QoQ to HK$4.8bn to HK$4.7bn EBITDA PAT EPS 28%YoY 31%YoY 30%YoY 1%QoQ 0%QoQ 0%QoQ to HK$3.5bn to HK$2.7bn to HK$2.11 Welcome questions Q&A Session begins now
Slide 19: Appendix
) Appendix -
Slide 20: Financial highlights – Income Statement
Financial highlights – Income Statement % of Revenue & % of Revenue & (HK$ mn, unless stated otherwise) Q1 2022 Q1 2021 YoY Change Other Income Other Income Results Revenue and other income 4,690 100% 5,956 100% (21%) Less: Transaction-related expenses (39) (1%) (45) (1%) (13%) Revenue and other inc
Slide 21: Performance by operating segment
Performance by operating segment Corporate Group Group HK$ mn Cash Derivatives Commodities Post Trade Technology Items Q1 2022 Q1 2021 Revenue and other income 1,379 926 376 1,804 276 (71) 4,690 5,956 % of Group Total 29% 20% 8% 38% 6% (1%) 100% 100% Less: Transaction-related expenses - (36) - (3) -
Slide 22: Top IPOs contributing to increased trading activity
Top 10 IPOs contributing to increased trading activity Top 10 IPOs since Jan 2018 Rising contribution to volumes from Top 10 IPOs Cash Market ADT (HK$ bn) contributed IPO size by Top 10 IPOs and related Structured Products ADT Rank Stock Name IPO date (HK$bn) % of respective ADT % of single stock op
Slide 23: Continuous ADR conversion and trading migration from China concept homecomings
Continuous ADR conversion and trading migration from China concept homecomings Top 10 Secondary and ADR conversion to HK CCASS Trading shares among HK and US Exchanges Dual Primary Listings1 Market Stock HK IPO HK freely traded shares 2 Trading volume breakdown (YTD 2022 March) Cap Name Date HKEX NA
Slide 24: Stock Connect – trading trends
Stock Connect – trading trends Stock Connect generated revenue of $641mn in Q1 2022 Stock Connect Average Daily Trading Volume (HKD bn) Shenzhen Southbound Shenzhen Northbound (1) Total average daily turnover NB record of SB record Shanghai Southbound Shanghai Northbound (1) Percentage of Southbound
Slide 25: Thank you.
Thank you. For further information on HKEX, please go to hkexgroup.com and hkexnews.hk
Hong Kong Exch & Clearing — Q1 2022 Earnings Presentation on 6ix