Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — FY2023 Earnings Presentation
27 slides from Hong Kong Exchanges & Clearing's earnings presentation, Feb 29, 2024
Slide 1: 2023 Full Year Results Media Briefing
Draft v23 2023 Full Year Results Media Briefing Nicolas Aguzin Chief Executive Officer, HKEX Group Vanessa Lau Group Chief Financial Officer, HKEX Group 29 February 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 | 2023 Key Highlights 02 | HKEX Group Financial Review 03 | Business and Strategic Update 04 | Appendix 3
Slide 4: 2023 key highlights
2023 key highlights Financial Performance FY2023: HK$20.5b (+11% YoY) FY2023: HK$11.9b (+18% YoY) Q4 2023: HK$4.9b (-7% YoY) Q4 2023: HK$2.6b (-13% YoY) Revenue and other income Profit attributable to shareholders Business and Strategy • Strong results: Despite a challenging macroeconomic and fragil
Slide 5: HKEX Group Financial Review
HKEX HKEX Group Group Financial Financial Review Review
Slide 6: FY2023: Second best-ever annual revenue and other income and profit
FY2023: Second best-ever annual revenue and other income and profit, demonstrating business resiliency Core business revenue(2) Revenue and other income(3) EBITDA FY2023 : HK$18.9b (3% YoY) FY2023 : HK$20.5b (11% YoY) FY2023 : HK$14.8b (12% YoY) Q4 2023: HK$4.5b (5% YoY) Q4 2023: HK$4.9b (7% Yo
Slide 7: Strong revenue and profit, driven by record net investment income and higher LME volumes
FY2023 vs FY2022 Strong revenue and profit, driven by record net investment income and higher LME volumes Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ m) Total Core business Total Core business Total Core business Total Core business + 11%
Slide 8: Q4 net profit down 12% mainly due to lower Headline ADT and net investment income
Q4 2023 vs Q3 2023 Q4 net profit down 12% mainly due to lower Headline ADT and net investment income 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% - 4%
Slide 9: FY2023 results in line with long-term historical upward trendline
Quarterly performance FY2023 results in line with long-term historical upward trendline Quarterly performance (HK$ m) Profit attributable to Shareholders (1) Revenue and Other Income (2) 5,956 Operating Expenses EBITDA 5,558 5,309 5,309 5,099 5,201 5,017 5,084 4,953 4,773 4,809 4,857 4,732 4,690 4,2
Slide 10: NII benefited from higher interest rates and External Portfolio gains
Net investment income (NII) – FY2023 vs FY2022 NII benefited from higher interest rates and External Portfolio gains FY2023: HK$4,959m (FY2022: HK$1,356m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 287.3 Corporate Funds Corporate Funds Margin Clearing House (External Portfolio)
Slide 11: Prudent investment in talent, infrastructure and operational excellence
Operating expenses and depreciation & amortisation – FY2023 vs FY2022 Prudent investment in talent, infrastructure and operational excellence Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Total opex(2) related expenses maintenance
Slide 12: Business and Strategic Update
Business and Strategic Update
Slide 13: Strong, resilient performance in FY2023
Strong, resilient performance in FY2023 Global market comparison Strategic diversification helped mitigate lower cash market HSI CSI 300 S&P 500 volumes 110 • Derivatives: record high ADV at 1.4m contracts (up 4% YoY) 100 -1% 90 • ETPs: record high ADT at HK$14.0b (up 17% YoY) 80 -27% • OTC Clear: C
Slide 14: FY2023 saw record high ADV in derivatives and strong recovery in LME
FY2023 saw record high ADV in derivatives and strong recovery in LME Record number of derivatives contracts traded Strong recovery in LME volumes ADV (in ‘000) Chargeable ADV (in ‘000) CAGR +7% 1,303 1,354 1,175 +11% YoY 562 547 506 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 HSI and HSCEI products pr
Slide 15: Expansion of Connect programmes delivering positive impact
Expansion of Connect programmes delivering positive impact Strong ETF momentum in Stock Connect since launch Robust Stock Connect growth, driven by expansion ADT of Southbound ETFs ADT of Northbound Stock Connect (HK$ m) (before vs after expansion, RMB b) % to ETF home market ADT 4.6% 11.4% +22% 112
Slide 16: Strong strategic progress in 2023
Strong strategic progress in 2023 Connecting China and the World Connecting Capital with Opportunities Connecting Today with Tomorrow - Leverage our China Advantage – Enhancing market liquidity and ecosystem – Prepare our organisation for the future • Enhance “Connect” programmes • Further build att
Slide 17: Looking ahead
Q3 2021ahead Looking Key Highlights ➢ Market sentiment will continue to be impacted by macroeconomic and geopolitical factors, including China-US relations, interest rate movement and pace of Mainland economic recovery ➢ Strong start for the Derivatives Market in 2024, with the overall derivatives v
Slide 18: Q&A Session
Welcome Welcome Q&A questions Session questions Q&A Session Q&A Session
Slide 19: Appendix
Appendix Appendix
Slide 20: Q4 core business profit down 12% due to lower volumes from Cash and Derivatives
Q4 2023 vs Q4 2022 Q4 core business profit down 12% due to lower volumes from Cash and Derivatives Markets, partly offset by higher LME ADV 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 21: NII benefited from higher interest rates and higher external portfolio returns
Net investment income (NII) – Q4 2023 vs Q4 2022 NII benefited from higher interest rates and higher external portfolio returns Q4 2023: HK$1,072m (Q4 2022: HK$933m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 274.1 Corporate Funds Corporate Funds Margin Clearing House (External
Slide 22: Prudent investment in talent, infrastructure and operational excellence
Operating expenses and depreciation & amortisation – Q4 2023 vs Q4 2022 Prudent investment in talent, infrastructure and operational excellence Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Total opex(2) related expenses maintenanc
Slide 23: Financial highlights – Income Statement
Financial highlights – Income Statement % of Revenue & % of Revenue & (HK$ m, unless stated otherwise) FY2023 FY2022 YoY Change Other Income Other Income Results Revenue and other income 20,516 100% 18,456 100% 11% Less: Transaction-related expenses (247) (1%) (176) (1%) 40% Revenue and other income
Slide 24: Performance by operating segment
Performance by operating segment Data and Corporate Group Group HK$ m Cash Derivatives Commodities Connectivity Items FY2023 FY2022 Revenue and other income 8,164 6,502 2,188 2,073 1,589 20,516 18,456 % of Group Total 40% 32% 11% 10% 8% 100% 100% Less: Transaction-related expenses (10) (237) - - - (
Slide 25: Continuous ADR conversion and trading migration from China concept homecoming
Continuous ADR conversion and trading migration from China concept homecoming Top 10 Secondary and ADR conversion to HK CCASS Trading shares in HK(4) Dual Primary Listings(1) Market Stock HK IPO HK freely traded shares (2) HKEX trading volume Cap Name Date FY 2022 FY 2023 (HK$ b) IPO date 31-Dec-23
Slide 26: Stock Connect – trading trends
Stock Connect – trading trends Stock Connect generated revenue of HK$2,207m in FY2023 (down 3%YoY) Stock Connect average daily turnover in value (HK$ b) Shenzhen Southbound Shenzhen Northbound (1) Total average daily turnover in value (2) NB record of SB record Shanghai Southbound Shanghai Northboun
Slide 27: Thank you.
Thank you. For further information on HKEX, please go to hkexgroup.com and hkexnews.hk
Hong Kong Exchanges and Clearing — FY2023 Earnings Presentation on 6ix