Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — H1 2024 Earnings Presentation
26 slides from Hong Kong Exchanges & Clearing's earnings presentation, Aug 21, 2024
Slide 1: 2024 Interim Results Media Briefing
2024 Interim Results Media Briefing Bonnie Y Chan Chief Executive Officer, HKEX Group Vanessa Lau Co-Chief Operating Officer and Group Chief Financial Officer, HKEX Group 21 August 2024
Slide 2: Disclaimer
Disclaimer The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, inducement, invitation or recommendation to subscribe for, buy or sell any securities or other products or to provide any investment advice or service of a
Slide 3: Agenda
Agenda 01 | 1H 2024 Key Highlights 02 | HKEX Group Financial Review 03 | Business and Strategic Update 04 | Appendix 3
Slide 4: 1H 2024 Key Highlights
1H 2024 Key Highlights Resilient financial performance Revenue and other income Profit attributable to shareholders Q2 2024: HK$5.4b (+8% YoY, +4% QoQ) Q2 2024: HK$3.2b (+9% YoY, +6% QoQ) 1H 2024: HK$10.6b comparable to 1H 2023 1H 2024: HK$6.1b (-3% YoY) Continuing strategic progress Diversification
Slide 5: HKEX Group Financial Review
HKEX Group Financial Review
Slide 6: Record second quarter highs in revenue and profit
Record second quarter highs in revenue and profit, 1H 2024 revenue comparable to prior year period Core business revenue(2) Revenue and other income(3) EBITDA Q2 2024: HK$5.0b (7% YoY) Q2 2024: HK$5.4b (8% YoY) Q2 2024: HK$4.0b (8% YoY) 1H 2024: HK$9.7b (0% YoY) 1H 2024: HK$10.6b (0% YoY) 1H 2024
Slide 7: Profit up 6% mainly driven by higher Headline ADT and lower opex
Q2 2024 vs Q1 2024 Profit up 6% mainly driven by higher Headline ADT and lower opex Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ m) Total Core business Total Core business Total Core business Total Core business + 4% + 8% - 2% - 6% + 7% +
Slide 8: Profit down 3% mainly due to lower Headline ADT
1H 2024 vs 1H 2023 Profit down 3% mainly due to lower Headline ADT, partly offset by strong performance at LME and record Derivatives volume Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ m) Total Core business Total Core business Total Core
Slide 9: 1H 2024 results in line with long-term historical upward trendline
Quarterly performance 1H 2024 results in line with long-term historical upward trendline Quarterly performance (HK$ m) Profit attributable to Shareholders Revenue and Other Income(1) 5,956 Operating Expenses (2) EBITDA 5,558 5,420 5,309 5,309 5,201 5,201 5,099 5,017 5,084 4,953 4,857 4,773 4,809 4,7
Slide 10: NII impacted mainly by lower Margin Fund size
Net investment income (NII) – 1H 2024 vs 1H 2023 NII impacted mainly by lower Margin Fund size 1H 2024: HK$2,521m (1H 2023: HK$2,676m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 269.2 Corporate Funds Corporate Funds Margin Clearing House (External Portfolio) (Internal) Funds Fu
Slide 11: Opex up 7% reflecting prudent control
Operating expenses and depreciation & amortisation – 1H 2024 vs 1H 2023 Opex up 7% reflecting prudent control, also helped by partial recovery of legal fees from LME Nickel incident Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Tot
Slide 12: Business and Strategic Update
Business and Strategic Update
Slide 13: Strong, resilient performance in 1H 2024
Strong, resilient performance in 1H 2024 : record half-yearly high in 1H 2024 Cash Market demonstrated resiliency Strategic diversification helps mitigate cash market volatility Derivatives FX Average Daily Turnover Value (HK$ b) Record high ADV 1.5m Contracts USD/CNH Futures ADV 79,173 Contracts (u
Slide 14: Strong momentum in derivatives and LME ADV sustained in 1H 2024
Strong momentum in derivatives and LME ADV sustained in 1H 2024 Record number of derivatives contracts traded Strong recovery in LME volumes ADV (in ‘000) ADV (in ‘000) FY21-23 CAGR +7% 1,533 694 1,303 1,354 1,175 +11% YoY 547 562 506 FY2021 FY2022 FY2023 1H 2024 FY2021 FY2022 FY2023 1H 2024 HSI and
Slide 15: Strong strategic progress in 1H 2024
Strong strategic progress in 1H 2024 Build on our China strength Enhance market vibrancy • Connect programmes enhancement and expansion • Provide a liquid and vibrant marketplace • Integrating China strategy across all divisions • Grow product, client and issuer ecosystems • Connect China and rest o
Slide 16: Looking ahead
Q3 2021ahead Looking Key Highlights ➢ Macro-environment uncertainties persist, with factors including China-US relations, the upcoming US presidential election, interest rate movements and the pace of Mainland economic recovery continuously impacting global markets. We remain cautiously optimistic a
Slide 17: Thank you - Q&A Session
Welcome Welcome Thank questions questions you Q&A Session Q&A Session
Slide 18: Appendix
Appendix
Slide 19: Profit up 9% mainly driven by higher volumes across markets
Q2 2024 vs Q2 2023 Profit up 9% mainly driven by higher volumes across the Cash, Derivatives and Commodities markets Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ m) Total Core business Total Core business Total Core business Total Core bus
Slide 20: NII mainly driven by income from Corporate Funds
Net investment income (NII) – Q2 2024 vs Q2 2023 NII mainly driven by income from Corporate Funds Q2 2024: HK$1,179m (Q2 2023: HK$1,141m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 255.9 243.9 Corporate Funds Corporate Funds Margin Clearing House (External Portfolio) (Internal)
Slide 21: Opex up 5% reflecting prudent control
Operating expenses and depreciation & amortisation – Q2 2024 vs Q2 2023 Opex up 5% reflecting prudent control, also helped by partial recovery of legal fees from LME Nickel incident Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Tot
Slide 22: Financial highlights – Income Statement
Financial highlights – Income Statement (HK$ m, unless stated otherwise) 1H 2024 1H 2023 YoY Change Results Revenue and other income 10,621 10,575 0% Less: Transaction-related expenses (166) (94) 77% Revenue and other income less transaction-related expenses 10,455 10,481 0% Operating expenses (2,79
Slide 23: Performance by operating segment
Performance by operating segment Data and Corporate Group Group HK$ m Cash Derivatives Commodities Connectivity Items 1H 2024 1H 2023 Revenue and other income 4,129 3,099 1,405 1,048 940 10,621 10,575 % of Group Total 39% 29% 13% 10% 9% 100% 100% Less: Transaction-related expenses (4) (162) - - - (1
Slide 24: Global indices and key market data performance
Global indices and key market data performance Global market comparison Key market indicators (Q1 2022 – Q2 2024) HSI CSI 300 S&P 500 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 120 +15% Derivative ADV 1,342 1,274 1,115 1,483 1,418 1,316 1,336 1,343 1,500 1,565 110 ('000 contracts) 1
Slide 25: Continuous ADR conversion while trading migration moderated
Continuous ADR conversion while trading migration moderated from China concept homecoming Top 10 Secondary and ADR conversion to HK CCASS Trading shares in HK(3) Dual Primary Listings(1) Market Stock HK IPO HK freely traded shares (2) HKEX trading volume Cap Name Date IPO date 30-Jun-2024 1H 2023 1H
Slide 26: Stock Connect – trading trends
Stock Connect – trading trends Stock Connect generated revenue of HK$1,199m in 1H 2024 (up 4% YoY) Stock Connect average daily turnover in value (HK$ b) Shenzhen Southbound Shenzhen Northbound (1) Total average daily turnover in value (2) NB record of SB record Shanghai Southbound Shanghai Northboun
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