Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — H1 2023 Earnings Presentation
24 slides from Hong Kong Exchanges & Clearing's earnings presentation, Aug 16, 2023
Slide 1: 2023 Interim Results Media Briefing
2023 Interim Results Media Briefing Nicolas Aguzin Chief Executive Officer, HKEX Group Vanessa Lau Group Chief Financial Officer, HKEX Group 16 August 2023
Slide 2: Disclaimer
Disclaimer 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 service of any kind. Thi
Slide 3: Agenda
Agenda 01 | 1H 2023 Key Highlights 02 | HKEX Group Financial Review 03 | Business and Strategic Update 04 | Appendix 3
Slide 4: 1H 2023 key highlights
1H 2023 key highlights Financial Performance 1H 2023: HK$10.6b 1H 2023: HK$6.3b (+18%YoY) (+31%YoY) Revenue and other income Profit attributable to shareholders Business and Strategy • Good results: 1H results demonstrated core business resiliency, despite global economic fragility and weak market s
Slide 5: HKEX Group Financial Review
HKEX HKEX Group Group Financial Financial Review Review
Slide 6: 1H 2023: Good results, second best ever half-yearly revenue and other income and profit
1H 2023: Good results, second best ever half-yearly revenue and other income and profit Core business revenue(2) Revenue and other income(3) EBITDA 1H 2023: HK$9.7b (5% YoY) 1H 2023: HK$10.6b (18% YoY) 1H 2023: HK$7.9b (23% YoY) Q2 2023: HK$4.7b (5% YoY) Q2 2023: HK$5.0b (18% YoY) Q2 2023: HK$3
Slide 7: 1H 2023 vs 1H 2022 results
1H 2023 vs 1H 2022 1H 2023: Good results, second best ever half-yearly revenue and profit, driven by record net investment income and derivatives ADV Revenue and Operating Profit attributable to HKEX EBITDA other income(1) expenses(2) shareholders(3) (HK$ m) Total Core business Total Core business T
Slide 8: Q2 2023 vs Q1 2023 results
Q2 2023 vs Q1 2023 Record Q2 revenue; core business net profit down 8% mainly driven by 20% lower Headline ADT 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
Slide 9: 1H 2023 results in line with long-term historical upward trendline
Quarterly performance 1H 2023 results in line with long-term historical upward trendline Quarterly performance Profit attributable to Shareholders (HK$ m) (1) Revenue and Other Income (2) 5,956 Operating Expenses EBITDA 5,558 5,309 5,099 5,309 5,017 5,201 4,953 4,773 4,809 4,732 4,690 4,288 4,290 4,
Slide 10: NII benefited from higher interest rates and External Portfolio gains
Net investment income (NII) – 1H 2023 vs 1H 2022 NII benefited from higher interest rates and External Portfolio gains 1H 2023: HK$2,676m (1H 2022: HK$89m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 305.6 Corporate Funds Corporate Funds Margin Clearing House 34.3 269.2 (Externa
Slide 11: Targeted, prudent investment in talent and operational excellence
Operating expenses and depreciation & amortisation – 1H 2023 vs 1H 2022 Targeted, prudent investment in talent and operational excellence Staff costs and IT & computer HKEX Foundation Other operating Depreciation and Premises expenses Professional fees Total opex(2) related expenses maintenance exp
Slide 12: Business and Strategic Update
Business and Strategic Update
Slide 13: Strong, resilient performance in 1H 2023
Strong, resilient performance in 1H 2023 Global market comparison Strategic diversification helped mitigate lower cash market volumes HSI CSI 300 S&P 500 • Derivatives: record half-yearly ADV at 1.4m contracts (up 5%YoY) Average Daily Turnover Value – Hong Kong (HK$ b) 110 • ETPs: ADT record half-ye
Slide 14: Expansion of Connect programme delivering positive impact
Expansion of Connect programme delivering positive impact Strong ETF momentum in Stock Connect since launch Robust Stock Connect growth, driven by expansion ADT of Northbound ETFs ADT of Northbound Stock Connect (RMB m) (before vs after expansion, RMB b) % to ETF home market ADT 0.2% +27% 117 92 504
Slide 15: Highlights in 1H 2023
Continued half year of strategic progress Connecting China and the World Connecting Capital with Opportunities Connecting Today with Tomorrow - Leverage our China Advantage - Improve our market liquidity and ecosystem – Prepare our organization for the future • Enhance “Connect” programmes • Further
Slide 16: Looking ahead: Key Highlights
Q3 2021ahead Looking Key Highlights Some positive news at macro level, including: expectations that the rising interest rate cycle is nearing conclusion, China/USA communications re-established, anticipated Mainland economic stimulus programmes But, uncertainties persist: inflationary pressures,
Slide 17: Q&A Session
Welcome Welcome Q&A questions Session questions Q&A Session Q&A Session
Slide 18: Appendix
Appendix Appendix
Slide 19: Q2 2023 vs Q2 2022 results
Q2 2023 vs Q2 2022 Record Q2 revenue; core profit up 8% driven by higher net investment income and flat opex growth despite Headline ADT down 21% other Revenue and income Operating expenses EBITDA (1) Profit attributable to HKEX shareholders (2) (3) (HK$ m) Total Core business Total Core business To
Slide 20: NII benefited from higher interest rates and External Portfolio gains
Net investment income (NII) – Q2 2023 vs Q2 2022 NII benefited from higher interest rates and External Portfolio gains Q2 2023: HK$1,141m (Q2 2022: HK$30m) Net investment income by funds Average fund size (HK$ m) (HK$ b) 325.2 Corporate Funds Corporate Funds Margin Clearing House (External Portfolio
Slide 21: Financial highlights – Income Statement
Financial highlights – Income Statement % of Revenue & % of Revenue & (HK$ m, unless stated otherwise) 1H 2023 1H 2022 YoY Change Other Income Other Income Results Revenue and other income 10,575 100% 8,937 100% 18% Less: Transaction-related expenses (94) (1%) (87) (1%) 8% Revenue and other income l
Slide 22: Performance by operating segment
Performance by operating segment Data and Corporate Group Group HK$ m Cash Derivatives Commodities Connectivity Items 1H 2023 1H 2022 Revenue and other income 4,206 3,453 1,039 1,022 855 10,575 8,937 % of Group Total 40% 33% 10% 10% 8% 100% 100% Less: Transaction-related expenses (5) (89) - - - (94)
Slide 23: 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 HK4 Dual Primary Listings1 Market Stock HK IPO HK freely traded shares 2 HKEX trading volume Cap Name Date IPO date 30-Jun-23 1H 2022 1H 2023 (HK$ b) BABA-S
Slide 24: Stock Connect – trading trends
Stock Connect – trading trends Stock Connect generated revenue of HK$1,152m in 1H 2023, 3% lower than HK$1,185m in 1H 2022 Stock Connect average daily turnover in value (HK$ b) Shenzhen Southbound Shenzhen Northbound (1) Total average daily turnover in value (2) NB record of SB record Shanghai South
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