HKEX Investor Presentation
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HKEX Investor Presentation Investor Relations Aug, 2021
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. This document is solely intended for distribution to and use by professional investors. This document is not directed at, and is not intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Hong Kong Exchanges and Clearing Limited (“HKEX”) to any registration requirement within such jurisdiction or country. This document contains forward-looking statements which are based on the current expectations, estimates, projections, beliefs and assumptions of HKEX about the businesses and the markets in which it and its subsidiaries operate. These forward-looking statements are not guarantees of future performance and are subject to market risk, uncertainties and factors beyond the control of HKEX. Therefore, actual outcomes and returns may differ materially from the assumptions made and the statements contained in this document. Where this document refers to Shanghai-Hong Kong Stock Connect and/or Shenzhen-Hong Kong Stock Connect (together, the “Stock Connect” programs), please note that currently, access to northbound trading is only available to intermediaries licensed or regulated in Hong Kong; southbound trading is only available to intermediaries licensed or regulated in Mainland China. Direct access to the Stock Connect is not available outside Hong Kong and Mainland China. Where this document refers to Bond Connect, please note that currently, access to northbound trading is only available to foreign investors that are able to trade onshore bonds on the China Foreign Exchange Trade System & National Interbank Funding Centre. Although the information contained in this document is obtained or compiled from sources believed to be reliable, HKEX does not guarantee the accuracy, validity, timeliness or completeness of the information or data for any particular purpose, and shall not accept any responsibility for, or be liable for, errors, omissions or other inaccuracies in the information or for the consequences thereof. The information set out in this document is provided on an “as is” and “as available” basis and may be amended or changed. It is not a substitute for professional advice which takes account of your specific circumstances and nothing in this document constitutes legal advice. HKEX shall not be responsible or liable for any loss or damage, directly or indirectly, arising from the use of or reliance upon any information provided in this document.
Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
HKEX – leading vertically integrated exchange group
HKEX GROUP
Financials
FY2020 1H2021
Leading diversified exchange group in the Asian Time Zone REVENUE: REVENUE:
HK$19.2bn HK$10.9bn
HK’s only exchange group EBITDA: EBITDA:
HK$14.6bn HK$8.6bn
World’s leading IPO venue – ranked #1 in 7 of the past 12 years1 PAT: PAT:
HK$11.5bn HK$6.6bn
Pioneer in Mainland capital markets connectivity EPS: EPS:
HK$9.11 HK$5.22
London Metal Exchange – globally leading base metals exchange DPS: DPS:
HK$8.17 HK$4.69
(90% payout) (90% payout)
Primary & Secondary Markets Post Trade Market Access
Equity & Financial
Cash Equities Commodities
Derivatives Post Trade Technology
Market Data
16% 6% 5%
29% 39%
1H 2021
Revenue
Share2
Note: Figures for 1H 2021 (unless otherwise stated)
1. From 2009 to 2020
2. Corporate items accounted for 5% of total revenue in 1H 2021 and are not shown in above pie charts.
41H 2021 key highlights
1| Financial Performance
• Record half-yearly revenue and other income of HK$10.9bn (+24% YoY) with core
business revenue up by 27% YoY, driven by record headline ADT
• Record half-yearly Stock Connect revenue and other income of HK$1.3bn (+78% YoY)
• Net investment income of HK$0.8bn (1H 2020: HK$0.8bn)
• Profit attributable to shareholders at record half-yearly high of HK$6.6bn (+26% YoY)
2| Business and Strategy
• Strong IPO market – #3 globally by IPO funds raised (HK$212bn, more than double
that of 1H 2020)
• Strong Connect scheme performance – record high ADT across all platforms
• Organisational changes announced, aligning ourselves better with the need and
success of our customers
• Ongoing market microstructure, technology enhancements and product launches
• LME announced the outcomes of its Discussion Paper on market structure, enhancing
the LME’s electronic offering and providing greater transparency
• Confirmed on 6 July, launch of FINI to drive post trade efficiency with T+2 IPO
settlement cycle, following overwhelming market support
5Core business well-positioned for organic and structural growth
A Broad Product Ecosystem Attracting Diverse Mainland and International Investor Base
Securities ADT Derivatives ADV
Futures Options
(HK$ billion) CAGR (’000 contracts)
CAGR
+10.8% Southbound Connect +11.4% Risk Management
188 1,219
1,204
1,133
1,069
129 Jumbo IPOs Algo / Quant Investors
870
106 107 769 762
88 87
69 67 Global Investors 533 577 After-hours Trading
63
2013
2014
2015
2016
2017
2018
2019
2020
2021
2013
2014
2015
2016
2017
2018
2019
2020
2021
3 3
B IPOs Driving ADT Growth C Transformational Growth from China’s Opening1
# of IPOs
Total IPO funds raised (US$ billion) Northbound ADT2 Southbound ADT2
Global fundraising rank New Economy Listing (RMB billion) (HK$ billion) Continuing Portfolio
Reforms Diversification
#3 #2 #1 #1 #3 #1 #1 #2 #3 CAGR CAGR
• Biotech 118
174 183
91 +51.6% A-share Inclusion in
138
218 154 • WVR +72.3% 48
122 126 Global Benchmarks
110 • Secondary Listings
66
42 24
Strong Pipeline of SB Connect Limited by
Mainland and 20 10 13 11 Investor Eligibility Cap
6 5 10 3 4
22 30 34 25 37 40 52 32 International Listings
16
2015
2016
2017
2018
2019
2020
2021
3
2015
2016
2017
2018
2019
2020
2021
3
3
2013 2014 2015 2016 2017 2018 2019 2020 2021
D Focus on Revenue Growth and Cost Discipline
Source: HKEX, Dealogic.
1. Shanghai-HK and Shenzhen-HK Stock Connect was launched in Nov 2014 and Dec 2016 respectively.
2. Buy + Sell ADT.
3. 2021 YTD as of Jul 2021.
6A Diverse international investor base attracted to broad product ecosystem
Algo / Quant Participation in Cash Market
Stock Due to…
Options Stock
Short Futures Relatively low • Presence of stamp duty
Selling (circa. 10-20% of ADT) • Minimal high frequency trading
• Single market structure
Stock
CBBCs Connect
Algo / Quant Participation in Derivatives Market
A-share
DWs Derivatives1 Driven by…
Stocks • No stamp duty
Relatively high
(circa. 40-60% of ADV) • Market maker participation
• Capital efficiency
OTC Bond
Connect
Recent initiatives and future focus
Index Asia & EM Market microstructure enhancements: leading to better price
Futures Index Futures2 discovery and trade efficiency
ETPs Currency
Futures Targeted marketing and client support: onboarding 10+ clients
each year
Incentives: driving increased volumes
Product cross-selling: creating arbitrage opportunities
1. HKEX signed a licence agreement with MSCI to introduce futures contracts on the MSCI China A Index, subject to regulatory approval and market conditions.
2. See next pages for details
7A New MSCI Suite – growing product ecosystem to connect global trades
HKEX MSCI Product Suite1 Key Dynamics
NTR
Single country Regional
MSCI Australia MSCI Singapore MSCI AC Asia ex Japan2 Expanding our product UNDERLYING
MSCI China Free MSCI Singapore Free MSCI EM Asia
Licenced a suite of MSCI indexes in Asia and Emerging
MSCI Hong Kong MSCI Taiwan MSCI EM Asia ex China
MSCI EM Asia ex Korea
Markets to introduce 40+ futures and options contracts
MSCI India MSCI Taiwan 25/50
MSCI Indonesia MSCI Thailand MSCI EM EMEA
MSCI Japan MSCI Vietnam MSCI EM ex China
MSCI Japan (JPY) MSCI EM ex Korea
MSCI Malaysia MSCI EM LatAm
MSCI New Zealand MSCI Emerging Markets
MSCI Philippines MSCI Pacific Broadening and deepening LIQUIDITY
MSCI Pacific ex Japan Allow investors to Trade Asia, in Asia
Price Return Complement existing HSI and HSCEI index futures
Single country Regional
MSCI China Free MSCI Taiwan 25/50 MSCI Emerging Markets
MSCI India MSCI Thailand
MSCI Indonesia MSCI Singapore Free
MSCI Japan (JPY) (SGD)
Enhancing our COMPETITIVENESS
MSCI Malaysia MSCI Taiwan
MSCI Philippines MSCI Vietnam Better capital efficiency
Creating a competitive one-stop shop for China and Asian
Options exposures
MSCI Taiwan
MSCI China Free
Reinforces Hong Kong’s role as the leading global market in the Asian Time Zone, with the broadest suite of MSCI
derivatives products
1. All contracts denominated in USD unless otherwise specified
2. Started trading in HKEX since 2018
8A New MSCI Suite – steady trading volume against keen competition
ADV (No. of Contracts)
10,000 9,450 9,648 9,554
9,356 Others1 Intense competition from
8,810 8,834
MSCI Indonesia NTR
8,000
8,016 7,924 SGX (FTSE Taiwan Capped
7,339 MSCI China Free NTR
6,771
MSCI TN NTR products) while still recording
6,000 MSCI JP NTR
5,072 meaningful ADV since
MSCI TW
4,000 launch
Expect to see gradual
2,000
250 478 migration with upcoming rolls
0
Jul-20 Aug- Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May- Jun-21 Jul-21 Continue to work on further
20 21
microstructure
OI (No. of Contracts) enhancements to meet
Others1 investor needs, such as
100,000 94,847
MSCI Indonesia NTR holiday trading
77,660
80,000 MSCI China Free NTR
62,975 63,579 66,329
59,806 61,940 MSCI TN NTR
60,000
MSCI JP NTR
44,066 43,386 45,006 44,682
40,000 MSCI TW
20,000
3,967
330
0
Jul-20 Aug- Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May- Jun-21 Jul-21
20 21
1. Mainly from MSCI TW NTR, India NTR and Malaysia NTR.
9B Strongly Performing IPO Market boosted by New Economy Issuers and
Secondary Listings
2021 Jan – July Fundraising Summary
…raising
HK$253.2bn
IPO Funds Raised
35 New Economy
(#3 globally)
& Biotech Companies Listed… HK$228.1bn
+85% YoY +134% YoY
IPO Funds Raised by Segments
No. of IPO
– Total 174 218 183 154 66
– New Economy1 World’s second-largest fund raising hub for biotech
– Biotech2 14 27 38 36 27 companies
0 5 9 14 8 Joined 12 IPO promotional events in June 2021, including
IPO Funds Raised China Listed Company Forum 2021, 21 Jingji HK
(HK$ bn) Biotech Outlook and Sequoia Portfolio Company IPO
400.2 Workshop which gathered top investors, entrepreneurs,
400
and industry professionals to continue the effort in
314.2
promoting HK new economy and biotech listings
288.0
300 217.0 253.2 Ongoing listing reforms
138.5
124.0
200 FINI - Shortening of IPO settlement cycle
128.5
18.5 16.1 40.4 207.1
Enhancing listing regime for overseas issuers
100 44.4
159.6
145.5 142.7 Enhancing the bookbuilding and price discovery aspects
84.1 21.0
25.1 of IPOs (cornerstone investors, pricing flexibility,
0
2017 2018 2019 2020 2021 clawback mechanism)
Others Biotech New Economy
Source: HKEX, as of July 2021.
1. Include Non-18A Biotech companies
2. Only include Chapter 18A Biotech companies
10B Top 10 IPOs contributing to increased trading activity
Top 10 IPOs since Jan 2018 Rising contribution to volumes from Top 10 IPOs
Rank Stock Name IPO date IPO size (HK$bn)
Cash Market ADT (HK$ bn) contributed
by Top 10 IPOs and related Structured Products ADT
1 BABA - SW 26/11/2019 101.20 % of respective ADT
% of single stock option ADV
2 CHINA TOWER - H 08/08/2018 58.80
19.6%
3 KUAISHOU - W 05/02/2021 48.30 15.5%
7.3%
4 BUD APAC 30/09/2019 45.08
19.7% 17.1%
1.3%
5 XIAOMI - W 09/07/2018 42.61 9.8%
32.1
6 JD - SW 18/06/2020 34.56 2.8%
25.5
7 MEITUAN - W 20/09/2018 33.14
8 JD HEALTH 08/12/2020 31.00
9 JD LOGISTICS 28/05/2021 28.27 3.0% 8.5
3.0
10 NTES - S 11/06/2020 24.26
2018 2019 2020 2021 YTD
In 2021 1H, 18% of cash ADT and 20% of single stock option ADV were contributed by the top 10 IPOs since 2018
Source: HKEX, as of Jul 2021. S – Secondary listings; W – Weighted Voting Rights; H – H shares
11B Continuous ADR conversion and trading migration from secondary listings
Trading shares among HK and US
Top 10 Secondary Listings1 ADR conversion to HK CCASS
Exchanges
Secondary Market Cap HK IPO HK freely traded shares 2 Trading volume breakdown (2021)
Listings (HK$ bn) Date IPO date 30-Jun-21 HKEX NASDAQ FINRA ADF 4 NYSE Arca NYSE Others (US)
2.7%
BABA - SW 4,771.6 26/11/2019 17% 11% 31% 8% 16% 17%
30.0%
5.1%
JD - SW 952.2 18/06/2020 19% 26% 26% 9% 2% 18%
15.0%
4.5% 1%
NTES - S 590.1 11/06/2020 25% 31% 22% 14%
8.0% 7%
3.3% 1%
BIDU - SW 564.1 23/03/2021 6% 30% 36% 20%
6.0% 7%
7.5% 1%
BILIBILI - SW 367.5 29/03/2021 13% 33% 27% 19%
10.0% 7%
9.8%
YUM CHINA - S 213.0 10/09/2020 8% 13% 31% 6% 27% 15%
3.0%
5.2%
ZTO EXPRESS - SW 193.5 29/09/2020 5% 14% 28% 7% 27% 19%
4.0%
4.7% 2%
TRIP.COM - S 175.9 19/04/2021 9% 37% 25% 19%
3.0% 8%
7.0% 2%
HUAZHU - S3 136.1 22/09/2020 5% 32% 36% 19%
5.1% 7%
5.8%
NEW ORIENTAL - S 129.5 09/11/2020 6% 13% 35% 6% 20% 20%
9.0%
Source: HKEX, FactSet, as of 30 Jun 2021
1. Ranked by market cap (Total: 14 as of 30 Jun 2021)
2. Based on total CCASS balance deducting the balance of main custodian bank as reference
3. Huazhu’s latest ADR conversion to HK shares is dated as of 15 Jul 2021 since a share split of ordinary shares (1 sub-divided into 10) has been effective since 29 Jun 2021 which affects the disclosure
from CCASS
4. FINRA ADF is an equity trading facility created by a self-regulatory organization FINRA. The ADF provides members with a facility for the display of quotations, the reporting of trades, and the
comparison of trades such as dark pool trading.
12C Transformational growth from China’s opening
Stock Connect1 Bond Connect
Northbound Southbound Total Foreign Participation in CIBM 2
(RMB billion) (HK$ billion) (RMB billion) Investors
Foreign Holdings in Chinese Bonds Foreign Onboarded
Portfolio Value Portfolio Value Ownership (%)
(US$ bn)
3.5%
2,673
CAGR Bond Connect
CAGR launch US$576bn
2,459 4.0%
2,340 600
2,375 3.5%
+78.7% 2,097 500
+79.7% 3.0%
400 2.5%
1,429 YTD ADT Jul
300 2.0%
1,138
927 1.5% RMB26.6bn
668 789 200
531 1.0%
364 100
125 186 115 0.5%
3 3 0 0.0%
2015
2016
2017
2018
2019
2020
2021
2015
2016
2017
2018
2019
2020
2021
3
Continuing portfolio diversification by Mainland and Inclusion of Mainland bonds into global fixed income
international investors indices
Inclusion of A shares into major global benchmarks Easier access to the Mainland bond market via more
trading platforms
Increasing selection of new economy companies in
Southbound Stock Connect Increasing use of RMB globally and need to reinvest
into RMB assets
Benefiting from the increased capital flow into and out of Mainland China,
in particular inbound flows driven by international index inclusions
Source: HKEX, Bond Connect, ChinaBond, SCH;
1. Shanghai-HK and Shenzhen-HK Stock Connect was launched in Nov 2014 and Dec 2016 respectively.
2. Foreign participation in CIBM was first allowed in 2010 when the PBOC rolled out a Pilot Scheme to allow foreign financial institutions to invest in CIBM.
3. Data as of Jul 30th, 2021.
13D Focus on revenue growth and cost discipline
2013-2016 2016-2020
ADT re-rating
Stock Connect – Shanghai
Stock Connect – Shanghai + Shenzhen
After-hours trading
Continuing growth in derivatives
LME fee commercialisation
Listing reforms and new economy issuers
Launch of LME Clear
Revamped investment income approach
Revenue (HK$ million) EBITDA (HK$ million)
EBITDA
68% 70% 75% 69% 73% 74% 75% 77%
Margin
CAGR
+14.6%
+8.4% 19,190 CAGR
+17.6%
15,867 16,311
13,375 +8.8%
13,180 14,641
11,116 11,757 12,263
8,723 9,849 10,085 9,614
6,891 7,661
5,946
2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
Reaping rewards from the structural growth initiatives that have already been implemented
14D Focus on revenue growth and cost discipline
2013-2016 2016-2020
Reaping rewards of past investments and
Investment in growth initiatives to capture benefiting from operating leverage
China opportunities
Increased cost discipline
Upgrading core infrastructure to strengthen
technological foundation Investment in automation and operational
efficiency
Operating Expenses (HK$ million) Profit Attributable to Shareholders (HK$ million)
Net Profit
52% 52% 59% 52% 56% 59% 58% 60%
Margin
CAGR
+7.1%
+7.6% CAGR
4,549 +18.8%
4,110 4,048
3,455 3,566 +8.2%
3,290 11,505
2,777 2,958
9,312 9,391
7,956 7,404
5,165 5,769
4,552
1
2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
Increased operating leverage from revenue growth, delivered by structural drivers combined with opex discipline
1. If the impact of HKFRS 16 were excluded, 2019 Operating Expense would be HK$4,362 million and the 2016-2019 CAGR would be 8.1%.
15Sustainability is at our core, and is business critical
Progressing our financial markets and communities for the benefit of all
TALENT RISK ENGAGEMENT REPUTATION CULTURE
OUR MARKETS OUR PEOPLE OUR OPERATIONS
Enhancing Corporate Governance best practices Giving back to our communities with HKEX Upholding high standard of corporate governance
among listed companies in Hong Kong covering Foundation’s Charity Partnership Programme, and board process within the organisation
board diversity, director independence, ESG via HKEX University Scholarship, as well as other
revision of Corporate Governance Code ongoing donations and volunteering activities for Ongoing promotion of employees’ awareness of
the community our legal and compliance obligations with
Ongoing promotion of ESG standards with the continuous training and internal communications
updated ESG Guide, new ESG Academy webinar Promoting talent learning and development with AI-
series, e-Learning series and updated ESG empowered platform and supporting employee Implementation of HKEX Future Workplace and
guidance letter and active involvement in global wellbeing across the Group, especially during digitalisation of internal workflows to improve
ESG standardisation engagement COVID-19 efficiency and reduce paper consumption
Promoting sustainable and green finance via Championing workplace diversity (gender and
publication of insights and research papers different abilities) through internal training,
through STAGE and the LME’s sustainability plan; advocacy and partnership with professional
senior executives leading the sustainable finance groups, universities and NGOs
dialogues in local and global forums e.g. CNBC
Global ESG Council
Recognised as a sustainability leader with the constituent status in various sustainability indexes,
e.g., Dow Jones Sustainability Indexes, FTSE4Good, Hang Seng Corporate Sustainability Index series
16Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
1H 2021: Record financial results
Revenue up 24%, profit up 26% year-on-year
(HK$)
Total revenue & other income(2) Core business revenue(3) Net investment income
+24% +27% -8%
$8.8bn $10.9bn $7.9bn $10.1bn $0.8bn $0.8bn
1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021
EBITDA PAT Basic earnings per share
+26%
+28% +26%
$4.15 $5.22
$6.7bn $8.6bn 1H 2020 1H 2021
1H 2020 1H 2021
$5.2bn $6.6bn Dividend per share
1H 2020 1H 2021
Margin(4) +26%
77% 79% $3.71 $4.69
1H 2020 1H 2021
1. All percentage changes are computed based on amounts reported in financial statements
2. Represents gross revenue and other income before deducting transaction-related expenses (1H 2020: HK$31mn; 1H 2021: HK$81mn)
3. Core business revenue represents total revenue and other income, excluding net investment income and HKEX Foundation donation income (1H 2020: Nil; 1H 2021: HK$74mn)
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses
181H 2021 vs 1H 2020: Record half-yearly revenue and profit driven by
record headline ADT and Stock Connect volumes
Revenue and Operating Profit attributable to HKEX
EBITDA Basic earnings per share
other income(1) expenses(2) shareholders(3)
(HK$ mn) (HK$)
Total Total Total Total Total
+ 24% + 9% + 28% + 26% + 26%
Core business Core business Core business Core business Core business
+ 27% + 7% + 33% + 32% + 31%
ADT
77% Margin(4) 79%
HK$117.5bn +60% HK$188.2bn
10,909
HKEXFN NII 774
8,782 74 8,607
NII 838 6,706 HKEXFN NII 774 6,610
5
NII 838 5,233 HKEXFN NII 774 5.22
Core business
NII 838 5 4.15 HKEXFN NII 0.61
Core business 10,061 Core business
NII 0.66 0.00
7,944 2,221
HKEXFN 2,045
Core business 7,828 Core business
HKEXFN Core business Core business
5,896 5,831 Core business
28 Core business 69 Core business 4,423 4.61
3.51
2,017 2,152 HKEXFN HKEXFN HKEXFN
(28) (28) (0.02)
1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021
Trading & clearing fees from Opex due to higher staff costs EBITDA margin 2% Core business PAT % lower than EPS % same as PAT
record headline ADT and Northbound and IT expenses EBITDA due to the deferred tax
ADT, partly offset by HKFE ADV charge of $160mn arising from the
Foundation donations approval of UK tax rate in 2021,
Depository fees from e-IPO fees, from 19% to 25% effective from April
scrip fees and Stock Connect portfolio 2023 (1H 2020: $61mn), partly offset
fees by lower % in D&A
Net investment income (NII) due to
from interest income, partly offset by
$459mn from external portfolio (1H
2020: $138mn losses; 1H 2021:
$321mn gains)
1. Represents gross revenue and other income before deducting transaction-related expenses (1H 2020: HK$31mn; 1H 2021: HK$81mn)
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of results of joint ventures
3. For the purpose of this presentation, tax impact of NII is not considered when calculating the PAT attributable to NII
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses
19Q2 2021 vs Q1 2021: Q2 results reflect lower ADT and ADV after an
exceptionally buoyant Q1
Profit attributable to
Revenue and other income(1) Operating expenses(2) EBITDA
HKEX shareholders(3)
(HK$ mn)
Total Total Total Total
- 17% + 2% - 21% - 28%
Core business Core business Core business Core business
- 17% - 0% - 21% - 29%
ADT
81% Margin(4) 77%
HK$224.4bn -33% HK$151.3bn
5,956
NII 418
HKEXFN 4,953
46 4,809
HKEXFN NII 356
NII 418
28 HKEXFN 3,798 3,840
21
NII 356 NII 418
HKEXFN
21
2,770
Core business
5,492 Core business NII 356
Core business
4,569 4,370 Core business Core business
1,102 1,119 3,458 3,401 Core business
HKEXFN HKEXFN 2,430
25 Core business 44 Core business
1,077 1,075 HKEXFN
HKEXFN
(16) (16)
Q1 2021 Q2 2021 Q1 2021 Q2 2021 Q1 2021 Q2 2021 Q1 2021 Q2 2021
Trading and clearing fees from Stable EBITDA margin 4% due to in PAT % more than EBITDA due to
headline ADT and Derivatives ADV revenue a one-off deferred tax charge of
$160mn arising from the approval of
Stock Exchange listing fees from in
newly listed DWs and CBBCs UK tax rate in Q2 2021, from 19%
to 25% effective from April 2023
Depository fees from seasonality
as more companies have their book
close in Q2 due to dividend payment
1. Represents gross revenue and other income before deducting transaction-related expenses (Q1 2021: HK$45mn; Q2 2021: HK$36mn)
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of results of joint ventures
3. For the purpose of this presentation, tax impact of NII is not considered when calculating the PAT attributable to NII
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses
20Cash and Post Trade segments drove higher revenue YoY
External portfolio saw gains of $321mn (vs losses of $138mn in 1H 2020)
Segmental revenue
(HK$ mn)
438 10,909
595 80
947 93
8,782
(26)
+42% +6% -3% +16% +18% +626% +24%
YTD
1HQ2 2020
2020 Cash Equity and Financial Commodities Post Trade Technology Corporate Items YTD
1HQ2 2021
2021
Derivatives
Trading fees & Trading fees & Trading fees Clearing fees Network fees Net investment
% tariffs from tariffs from DWs, from LME from ADT & SIs, due to usage of income (NII)
Change record ADT of CBBCs & warrants chargeable ADV and record NB the Orion Central from gains
year-on-year equity products and from ADT Stock Connect Gateway & China from external
record Stock Trading fees from clearing revenue Connect Central portfolio but partly
Connect ADT futures and options Depository fees Gateway, and offset by interest
from HKFE from e-IPO fees, new throttle fees income
ADV, partly offset scrip fees and Hosting services
by record stock Stock Connect fees due to HKEX Foundation
options ADV portfolio fees subscriptions donation income
Listing fees due Investment income $74mn
to record newly due to interest
listed DWs and income from lower
CBBCs interest rates
1. Headline ADT up 60% (1H 2020: $117.5bn; 1H 2021: $188.2bn); ADT of equity products included under Cash segment up 66% (1H 2020: $100.0bn; 1H 2021: $165.8bn); ADT of DWs, CBBCs
and warrants included under Equity and Financial Derivatives segment up 28% (1H 2020: $17.5bn; 1H 2021: $22.4bn)
21Higher EBITDA for Cash, Post Trade and Technology segments due to
increase in the Cash Market activities
EBITDA
Equity & Financial Group Total
Cash Commodities Post Trade Technology
Derivatives (incl. Corp. Items)
($ million)
+ 47% 0% - 5% + 18% + 23% + 28%
(1)
% EBITDA Margin 77% 79%
% Share of Group EBITDA
(before Corporate Items) 8,607
87% 90% 82% 80% 56% 55% 88% 89% 69% 72% 6,706
3,760
3,197 100% 100%
2,895
1,968
1,331 1,331 420 304 375
399
27% 33% 19% 15% 6% 5% 44% 43% 4% 4%
1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021
Trading fees & tariffs Trading fees & tariffs from DWs, Trading fees $48m from Clearing fees $682m Network fees $59m due EBITDA margin 2%
CBBCs & warrants $83m from
$913m from record ADT of ADT LME chargeable ADV from ADT & SIs, and to usage of the Orion
equity products and record Other revenue from record Stock Connect Central Gateway & China
Trading fees from futures and
Stock Connect trading options $129m from HKFE physical operations clearing revenue Connect Central Gateway,
revenue ADV, partly offset by record stock $12m Depository fees $338m and new throttle fees
options ADV
from e-IPO service fees, Hosting services fees
Opex $20m due to Listing fees $147m due to record scrip fees & Stock $13m due to
staff and IT costs newly listed DWs and CBBCs
Connect portfolio fees subscriptions
Transaction-related expenses
$40m due to MSCI license
Investment income
fees $426m due to interest
return
Opex $53m due to allocated
costs of Listing Division from Opex $22m due to
listing fees from DWs and CBBCs, staff costs
and MSCI incentives
1. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
22Net investment income impacted by low interest rate environment
1H 2021: $774mn (1H 2020: $838mn)
External portfolio – improved performance reflecting market Average fund size
valuations (HK$ bn)
Internal funds – lower income from reduced interest rates, partly 242.3
33.8
offset by higher fund sizes 197.3
29.3 Corporate Funds
Net investment income by funds Margin Funds
186.0
151.7
(HK$ mn) Clearing House
Funds
Corporate Funds Corporate Funds Margin Clearing
(External Portfolio) (Internal) Funds House Funds 16.3 22.5
1H 2020 1H 2021
714
Net investment income by category of investments
(HK$ mn)
336 Cash & Collective
321 Debt
bank investment FX
securities
deposits schemes
204
982
107
58
10
417
321
32 21 15
(138) (38)
(138)
1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H 1H
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
23Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
Our 2019-2021 Strategic Vision
The Global Markets Leader in the Asian Time Zone –
Connecting China, Connecting the World
China Global
Liquidity Liquidity
China Global
Markets Markets
China Global
Underlying Underlying
China Anchored Technology Empowered Globally Connected
Facilitating China’s Leveraging new technology Bringing global liquidity
internationalisation and for modernisation and to China and Asia Pacific
investment diversification growth underlying
25Strategic Plan on Track – achievements to date (1/3)
China Anchored – Facilitating China’s Internationalisation and Investment Diversification
Expanding and Enhancing Stock Connect
• Stock Connect inclusion of WVR companies; eligible A-shares listed on Shanghai’s STAR Market; their
corresponding H-shares; and pre-revenue biotech companies listed in HK
• Launch of the investor identification regime for Southbound Trading
• Master SPSA launched to support Northbound Trading with better operational efficiencies
• Stocks under SB Stock Connect added to Mainland annuity funds' investment scope
Enhancing Bond Connect
• Enhancements to settlement cycles (special settlement cycles and recycle settlement, T+N settlement
available on Tradeweb and Bloomberg)
• Launch of electronic bond issuance system – ePrime
• Extension of trading hours; fee reduction; increase in choices of FX settlement bank; more flexible filing
arrangements
Extending our China onshore capabilities
• Launch of Guangzhou Futures Exchange – HKEX became the first non-Mainland Chinese investor to
take an interest in an Mainland Exchange
• Established HKEX Mainland China Advisory Group and Mainland Market Panel to provide insight and
expertise
• Launch of natural gas and cement products on the QME
26Strategic PlanPlan
3 | Strategic on Track – achievements
on Track – 2020 Highlights
to date (2/3)
Globally Connected – Bringing Global Liquidity to China and Asia Pacific Underlying
Globally Connected – Bringing Global Liquidity to China and Asia Pacific Underlying
Enhancing our IPO regime
• New grandfather arrangements to enable qualifying issuers with Corporate WVR to seek secondary
listings in Hong Kong
• Shortening of the structured product listing cycle from five to three trading days
• Published a consultation paper on proposals to enhance and streamline the listing regime for overseas
issuers
Broadening our product ecosystem across asset classes
• MSCI suite of Asia and Emerging Markets Index Futures and Options
• Hang Seng TECH Index Futures and Options; Weekly Index options; Options on Futures
• USD and CNH denominated Silver Futures; mini USD/CNH Futures; New cash-settled metals futures
on LME
Developing into the ETF issuance and trading hub of the Asia time zone
• Welcomed new types of ETPs – active equity ETF, ESG China A shares ETF, commodity-based L&I
Product, HK – listed biotech companies focused ETF, ETF tracking the Shanghai’s STAR Market
• Launched the Hong Kong-Mainland ETF Cross-listing Scheme with both Shanghai and Shenzhen
• Introduced a new spread table and continuous quoting market making obligations to enhance liquidity;
cross-listing link with Euroclear; buy-in exemption; reduced fee exemption for ETP market makers while
introduced fee waiver for fixed-income ETPs
Improving market microstructure
• Enhanced Volatility Control Mechanism (VCM) and Pre-Opening Session (POS)
• Temporary migrated LME trading activities from the Ring to electronic pricing
• LME launched electronic warranting solution to replace paper warrants
27Strategic PlanPlan
3 | Strategic on Track – achievements
on Track – 2020 Highlights
to date (3/3)
Technology Empowered – Leveraging New Technology for Modernisation and Growth
Technology Empowered – Leveraging New Technology for Modernisation and Growth
Modernising our systems
• Confirmed launch of FINI, reducing the IPO subscription and settlement cycle from T+5 to T+2
• Relocation of the secondary data centre to become a Tier 3 data centre
• Completion of the derivatives system infrastructure upgrade
Leveraging new technology
• Announced launch of Synapse in Q1 2022 to automate and streamline post trade workflow for
Northbound Stock Connect
• Deployed new technologies (e.g., Robotic Process Automation, AI) across HKEX businesses
• Continued to scale up our Robotic Process Automation (RPA) programme and AI usage across our
businesses to improve operational efficiency; HKEX RPA team won the BluePrism’s APAC Pinnacle
award, highest honour at its annual Customer Excellence Awards in 2021
Expanding our horizons
• Launch of Fusion Bank, a new virtual bank in partnership with multiple leading HK businesses (HKEX
has minority shareholding)
• Minority investment in Huakong TsingJiao, which specialises data and multi-party computation
technologies
282019-2021 Strategy – FICC themes
FIXED INCOME AND CURRENCY COMMODITIES
Facilitate CNY access Expand product suite
Enhance Bond Connect Market structure evolution
Expand suite of offshore rates / FX
Asian Time Zone expansion
derivatives on onshore underlying
Build post-trade infrastructure
Commodity Connect
(custody, settlement, collateral management, FX)
29Key components of our FIC strategy
Bond Connect enhancements
Expand Existing Platform Listed bonds and derivatives
Southbound Bond Connect
CNY accessibility – repository, tracking and monitoring
Capture CNY Opportunities IRS and repo + Derivatives Connect
CNY trading platform
Custody, settlement and collateral management
Invest in Post-Trade Infrastructure Trade repository and monitoring
International linkages
30LME volume softened recently given pandemic battered global
economic activities…
Commercialisation
Post-acquisition Strategic pathway, future
of the platform
integration and platform development and
with LP and new
LME Clear launch revised fee structure
trader programme
22 Sep 2014
ADV (‘000 lots)
6 Dec 2012 LME Clear
1,000 HKEX Launch
acquisition
800
730
700 697
676 670
634 619 624 610
584 564
600
475
400
200
0
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD
Source: LME data as of Jul 2021
1. Excluding Admin Trades, 2021 YTD: 538,933 lots.
31…while multiple enhancements are on track
Market leadership
• Promoting the highest standards of fair and orderly trading on the LME’s market
• Delivery of off-warrant stock reporting to provide better industry-wide metals stock transparency
• Deliver a modern market structure by close collaboration with external and internal stakeholders
Strategic Pathway Continued innovation
• Continuing the success of the Strategic • Significant investment in new trading
Pathway, with new contracts continue to platform
build liquidity especially in ferrous suite • Supporting industry initiatives to enhance
• 2020 prioritisation of electronic options security of off-warrant metal storage
market to simplify and standardise areas of • Investigating solutions to enable the spot
its market structure trading and sourcing of specific metal types
• Following extensive consideration of • Insourcing warrant depository to streamline
market feedback, the LME is now moving the warrant lodgement and withdrawal
forward its plans to enhance its electronic process, and provide significant operational
offering and provide greater transparency efficiencies
Sustainability focus
• Continued embedding of responsible sourcing requirements into the LME brand lists, ensuring that
LME brand listing is a clear indicator of good ethical standing
• Launch of 2020 sustainability strategy proposals to reflect market interest in broader sustainability story
with a focus on low carbon aluminium
• Launch of a new digital register – LMEpassport in Q3 2021, to promote disclosure over sustainability
criteria, and the introduction of six new contracts in July 2021 to support the circular economy and a
more sustainable metals market
32Market microstructure enhancements at HKEX
We aim to build a quality market and a sustainable ecosystem of policies, participants and products
Areas of Focus Key Achievements so far Since 2019
• Better client onboarding
Improve Ease
• Participants system testing enhancements
of Access • Northbound throttle expansion (Stock Connect)
• Expand Closing Auction Session (Cash)
Reduce Frictional • After-hours trading extension to 3am (Derivatives)
Trading Costs • New spread table, Market Making enhancements and stamp duty exemption on ETP
market
• Better cash interest rebates to participants
Improve
• Flexibility in Clearing Participants (CP) setup in HK and Stock Connect markets
Capital Efficiency • Flexibility for Non-CPs in clearing arrangements
Enhance Risk
• Revamp Pre-Opening Session and Volatility Control Mechanism (Cash & Derivatives)
Management
• Self-Match Prevention (Derivatives)
& Market Integrity
Selected Initiatives in the Pipeline
• Holiday trading and trading hour enhancements for MSCI products
• Shorten IPO settlement cycle
• Pre-Trade Risk Management Enhancements
• Increase Position Limit for certain products
We have achieved 30+ enhancements in the last 2 years and will continue to ensure
competitiveness and efficiency of our markets
33Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
The penetration level of equity market through Stock Connect
% of domestic market included in Stock Connect Stock Connect Coverage
(% of all Mainland & HK listed companies)
MUTUAL MARKET
By SSE 78%
Market 75% 78%
of total market cap
Cap SZSE 81%
SSE 69%
By
87% 73%
Turnover of total turnover
SZSE 73%
SSE 30% 587
By 28%
523 20% of total number of
Number
SZSE 35% 850 companies
Stock Connect covers the majority of the market by market cap and turnover
Source: Wind, HKEX
1. Data as of Jun 2021.
Eligible Stocks for Northbound Trading: Constituent stocks of SSE 180 and SSE 380; Constituent stocks of SZSE Component Index, SZSE Small/Mid Cap Innovation Index which both are with a
market capitalization of at least RMB 6bn; A-listed stocks (both in SSE and SZSE) that are not included in the former indices but are dual listed in H-share market.
Eligible Stocks for Southbound Trading: Constituent stocks of the Hang Seng Composite LargeCap Index (“HSLI”) and Hang Seng Composite MidCap Index (“HSMI”) and Hang Seng Composite
MidCap Index (“HSSI”) which with a market capitalization of at least HKD 5bn.
35Stock Connect – trading trends
Stock Connect generated record revenue of $1,320mn in 1H 2021, 78% higher than 1H 2020 ($743mn)
Stock Connect average daily trading volume (HK$ bn)
Shenzhen Southbound Shenzhen Northbound (1) Total average daily trading volume NB record of SB record
Shanghai Southbound Shanghai Northbound (1) Percentage of Southbound turnover of Hong Kong Market RMB191.2bn on of HK$102.2bn
7 Jul 2020 on 27 Jul 2021
15.3%
300 14.2%
12.5% 12.2% 13.1%
15.0%
9.9% 10.4% 10.3%
9.6% 235.8
250 9.0% 8.5% 236.8
10.0%
6.8% 7.3%
6.1% 6.1% 6.4% 212.6
5.3% 5.7% 5.4% 5.8% 5.6% 34.6 38.0
4.8% 4.8%
200 3.7% 3.9% 178.4 166.7 25.0
5.0%
2.3% 35.2 163.1
1.7% 33.4 23.2
158.5
24.6
13.2 139.1 141.6 20.7 18.8
150 0.0%
22.3 17.6
13.9 13.6 16.6 16.7
106.7 14.1 92.8 88.7 15.4 90.4
95.8
100 8.7 69.0 -5.0%
12.9 8.8 75.2 68.1 68.7
67.5 10.6 63.3 58.8
57.4 52.8 56.8
3.8 47.9
43.6 4.3 6.8 4.3 44.8
50 37.8 34.4 3.6 -10.0%
30.6 32.0 7.5 6.3 6.9
21.6 21.1 26.6 74.2 75.7 74.0
17.9 21.4 23.9 56.2 62.5 60.3 58.9
8.6 10.9 13.5 48.1 50.8
6.4 6.0 30.3 37.1 31.6
24.6 21.4 21.6
0 -15.0%
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Jan 21 Feb 21 Mar 21 Apr-21 May-21 Jun-21 Jul-21
Stock Connect Northbound and Southbound Trading ADT reached RMB114.4bn and $48.1bn respectively in 1H 2021
Stock Connect revenue continued to set record highs,
reaching 12% of the Group’s total revenue and other income in 1H 2021 (FY 2020: 10%; 1H 2020: 8%)
Source: HKEX, SSE and SZSE data
1. Northbound (NB) trading is conducted in RMB; the NB figures in the chart are converted to HKD based on the month-end exchange rate.
2. May not add up due to roundings
36Stock Connect (Northbound)
Average Daily Turnover Portfolio Value
RMB billion RMB billion
124.3
118.0
MSCI 2,653 2021
rebalancing
2,491 2,459
days 2,461 2,452 2,629
2,340
2,360
91.3 2020
2,089
84.3 2,013
1,952 1,950
77.3 1,892
1,687
1,437 1,518 1,429
1,439 1,450
2019
1,298
1,160
41.7 1,054 1,264
1,050
1,221
34.7 1,094
31.7 1,033 1,043
951 932
679 668
2018
20.4 621
785
686 698 680 719
9.6 601 576 592
662 2017
566 530
4.7 491 502
404 437
347 366
270 301
233 253
202
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: HKEX
1. Data as of 30 Jul 2021.
37Index futures on China underlying
ADV (’000 contracts)
Hang Seng Index Futures (58)3 HSCEI Futures (50)3
WEIGHTING COMPOSITION1 NOTIONAL VALUE1 NOTIONAL VALUE1
66% 34% US$165k US$59k
234 152 146
MAINLAND CHINA OTHER 209 139
135 134
117 125
167
144 86 89
131 127
94 61 65
85 83 80 86 50
69
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
Trading Fee: HK$10.00/contract, 0.0007% to notional value Trading Fee: HK$3.50/contract, 0.0006% to notional value
FTSE China A50 Index Futures (SGX) (50)3 CSI 300 Index Futures (CFFEX) (300)3
NOTIONAL VALUE1 NOTIONAL VALUE1
US$15k US$222k
391 383 379 1,136
369
339
884
270 260 812
159 432
84 251 207
39 96 123 139
2 12 17 17 31
2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021* 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*
Trading Fee: US$1.10/contract, 0.0061% to notional value Trading Fee: RMB36.93/contract, 0.0023% to notional value
Source: HKEX, SGX, CFFEX, FIA
1. As of Jul 2021.
2. CSI 300 Index Futures was launched in Apr 2010.
3. Numbers in brackets represent the number of constituents within the underlying index.
* Data as of Jul 2021 except SGX as of Jun 2021
38Tapping into China’s vast bond market
China’s Bond International
Market Investors
Key Policy Drivers
Outstanding,
US$49tn US$ tn Relative to GDP
• Risk migration from banking sector to bond market
50 192%
• Greater credit differentiation amid ongoing market
reforms
25 99% 244%
222% 173%
• Funding needs for economic transition and
infrastructure projects – e.g. Belt & Road; Panda
0
US China Japan UK FR
bonds
• Enhanced bond issuance and disclosure standards
US$16tn Growing International Demand
• Yield differential against developed markets
US$13tn
• Inclusion in emerging market bond indexes
• Geographical and asset class diversification
Bank Assets Equities Bonds
• Growing convertibility of RMB / SDR inclusion
• More efficient access – Bond Connect
Source: CBIRC (Jun 2021), PBOC, SSZ and SZSE (Jun 2021), BIS and IMF (Dec 2019 for the Bond vs GDP chart)
39Bond Connect has significantly grown foreign participation in China’s bond market
Bond Connect Jul 2021 YTD ADT: RMB 26.6bn
1
Foreign Participation in the CIBM Growth Drivers
Foreign Holdings in Chinese Bonds Foreign Ownership (%)
(US$ billion) Inclusion of Mainland bonds in global fixed income
indexes (BBGA, GBI-EM, WGBI)2
RQFII QFII Long-only
investment investment investment 3.5%
600 Greater adoption of RMB globally and
Bond US$576bn
Pilot scheme 4.0% need to reinvest in RMB assets
Connect
to access
launch
CIBM
500 3.5%
Improving access to the Mainland bond market
3.0%
400
Foreign Ownership %
2.5%
68%
64%
300
2.0% Achievable
target
46%
1.5% 41%
200 39% 38% Average: 38.5% 15%
1.0% 29%
100
0.5% 13%
8%
~3%
0 0.0%
(1)
DE FR AU UK IT CA US RU JP China
Foreign participation in the CIBM increased by 344% since launch of Bond Connect in July 2017(1)
Number of Bond Connect participants has grown to 2,673 as of Jul 2021
Source: ChinaBond + SCH, Bloomberg, BIS
1. Foreign participation in the CIBM data as of Jul 2021
2. BBGA is Bloomberg Barclay Global-Aggregate, GBI-EM is J.P. Morgan Government Bond Index-Emerging Markets series, WGBI is FTSE World Government Bond Index
40Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
Financial highlights – Income Statement
% of Revenue & % of Revenue &
(HK$ mn, unless stated otherwise) 1H 2021 1H 2020 YoY Change
Other Income Other Income
Results
Revenue and other income 10,909 100% 8,782 100% 24%
Less: Transaction-related expenses (81) (1%) (31) (0%) 161%
Revenue and other income less transaction-related
10,828 99% 8,751 100% 24%
expenses
Operating expenses (2,221) (20%) (2,045) (23%) 9%
EBITDA 8,607 79% 6,706 76% 28%
Depreciation and amortisation (662) (6%) (545) (6%) 21%
Operating profit 7,945 73% 6,161 70% 29%
Finance costs and share of results of joint ventures (39) (0%) (57) (1%) (32%)
Profit before taxation 7,906 73% 6,104 70% 30%
Taxation (1,317) (12%) (870) (10%) 51%
Loss/(profit) attributable to non-controlling interests 21 0% (1) (0%) N/A
Profit attributable to HKEX shareholders 6,610 61% 5,233 60% 26%
Capex 536 519 3%
Basic earnings per share HK$5.22 HK$4.15 26%
Headline ADT on the Stock Exchange HK$188.2 bn HK$117.5 bn 60%
1. % does not add up due to roundings.
42Performance by operating segment
Equity &
Corporate Group Group
HK$ mn Cash Financial Commodities Post Trade Technology
Items 1H 2021 1H 2020
Derivatives
Revenue and other income 3,200 1,731 723 4,224 523 508 10,909 8,782
% of Group Total 29% 16% 6% 39% 5% 5% 100% 100%
Less: Transaction-related
- (63) - (18) - - (81) (31)
expenses
Revenue and other income less
3,200 1,668 723 4,206 523 508 10,828 8,751
transaction-related expenses
Operating expenses (305) (337) (324) (446) (148) (661) (2,221) (2,045)
EBITDA 2,895 1,331 399 3,760 375 (153) 8,607 6,706
% of Group Total 34% 15% 5% 44% 4% (2%) 100% 100%
EBITDA margin(1) 90% 80% 55% 89% 72% N/A 79% 77%
Depreciation and amortisation (80) (69) (171) (163) (39) (140) (662) (545)
Finance costs (6) (6) (4) (33) (1) (27) (77) (96)
Share of results of joint ventures 38 - - - - - 38 39
Profit before taxation 2,847 1,256 224 3,564 335 (320) 7,906 6,104
1. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
43Operating expenses and depreciation & amortisation
Investments in talent and infrastructure
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) amortisation
(HK$ mn)
+ 7% + 7% - 3% - 27% + 146% + 20% + 9% + 21%
Excl.
+
donations
7%
2,221
2,045
1,495
1,398
662
545
315 338
214
59 57 66 48 69 179
28
1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021 1H 2020 1H 2021
Staff costs due to due to Stable Professional fees 2021 amount mainly Incentives, Total opex due to due to
payroll adjustments maintenance incurred for strategic represents including those staff costs, IT depreciation of
and part-time expenses for new IT initiatives (e.g. donations made by related to MSCI costs and new and upgraded
wages for new systems and consulting fee for HKEX Foundation index futures Foundation IT systems and
initiatives, and network upgrades HKATS review in to HK Community contracts donations, partly software (e.g.
appreciation of GBP 2020) Chest offset by NextGen Risk
professional fees Management)
1. Includes product marketing and promotion expenses
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of results of joint ventures
441H 2021 performance bolstered by record Q1 volumes
Quarterly performance
(HK$ mn)
Profit attributable to shareholders
Revenue and other income(1)
Operating expenses (2) 5,956
EBITDA
5,309 5,099
4,953
4,773
4,809
4,288 4,290 3,987
4,150 4,044 4,102 4,009 4,177
3,571 3,758 3,798
3,746 3,722
3,523
3,454 3,840
3,307
3,155 3,318
3,048 3,215 3,061 3,077 3,038
2,751 2,879 2,848 3,347
2,638 2,555 2,600
2,567 2,404 2,984 2,971
2,277
2,925
2,215 2,770
2,045 2,014 2,562 2,608 2,597
1,897 2,479 2,443
1,705 2,262
2,207
2,033 1,979
1,777 1,878 1,828
1,543 1,716
1,553
1,432 1,241
1,153 1,301
1,134 1,037 1,093 1,102 1,119
924 957 971 1,012 956 970 937 1,008
825 825 869 877 920
842 823
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021
1H 2021 results reached record half-yearly high, driven by exceptionally buoyant volumes in Q1
1. Represents gross revenue and other income before deducting transaction-related expenses
2. Operating expenses exclude transaction-related expenses, depreciation and amortisation, finance costs, share of results of joint ventures, and certain exceptional costs
3. Dotted trend lines are illustrative and do not constitute a forward forecast
45Comparison of trading activity across global Exchanges
ADT & Velocity (1) of Major Global Exchanges (US$ billion)
= Last 6 months (Jan 21 - Jun 21) velocity*
= Last month (Jun 21) velocity
= ADT
374% 228% 56%
166% 62% 49% 84% 196% 81% 43% 92% 362% 218% 73% 117% 293% 102% 68% 201% 40%
298.1
111.3
87.8
75.9
61.3
31.0 26.2
19.6 14.2
9.5 8.3 13.0 9.9 8.8 9.6 4.7 1.1
NASDAQ NYSE Cboe TMX B3 LSE ENX Deutsche SZSE SSE HKEX(2) JPX KRX NSE ASX TWSE SGX
Group Börse
*Source: WFE and Bloomberg (Jun 2021).
1. ADT and turnover velocity takes into account both on-exchange and block trading. For Nasdaq, NYSE and Cboe, trades executed on their trading platforms include those listed on other US
exchanges, hence their turnover velocity covers the whole US market.
2. HKEX ADT includes equities only, excluding ETPs and structured products.
46Global derivatives trading landscape
320
(5 tons equivalent)
No. of contracts
2,493 876 1,434 1,260 1,457 173 115 71 72
(in million)
% of volume in 13.8% 57.1% 100.0% 100.0% 100.0% 0.10% 11.3% 100.0% 0.0%
commodities
ADV in million
20.11
10.17 10.33
8.93
6.00
2.58
(5 tons equivalent)
1.22 0.96 0.57 0.51
CME Group ICE (incl. SHFE DCE ZCE HKEX SGX LME CFFEX
LIFFE) Derivatives
Source: Company website, data as of Jul 2021 except SGX and LME as of Jun 2021.
47Stock Connect shareholding value
Northbound(1): RMB2,459bn; Southbound(2): HK$2,375bn
Northbound Top 25(3) Southbound Top 25(3)
Share value % of issued Share value % of issued
Rank Stock name in CCASS shares Venue Rank Stock name in CCASS
(RMB million) (HK$ million) shares
1 Kweichow Moutai Co.,Ltd. 157,636 7.47% SH 1 Tencent Holdings Limited 270,711 5.87%
2 Contemporary Amperex Technology 81,426 6.35% SZ 2 China Construction Bank Corporation* 145,125 11.12%
3 Midea Group Co., Ltd. 75,664 16.89% SZ 3 Industrial And Commercial Bank Of China * 106,541 28.41%
4 China Merchants Bank Co.,Limited * 64,034 6.67% SH 4 Hsbc Holdings Plc 82,763 9.26%
5 Wuliangye Yibin Co.,Ltd. 51,573 6.01% SZ 5 Xiaomi Corporation 81,113 12.74%
6 Longi Green Energy Technology Co., 50,061 10.76% SH 6 China Mobile Limited 75,201 7.67%
7 Ping An Insurance (Group) Company* 48,381 8.32% SH 7 Meituan 74,093 5.62%
8 Gree Electric Appliances,Inc 47,835 16.74% SZ 8 Anta Sports Products Limited 55,807 12.19%
9 China Tourism Group Duty Free 45,341 9.63% SH 9 Great Wall Motor Company Limited* 55,185 47.66%
10 Jiangsu Hengrui Medicine Co.,Ltd. 42,165 12.17% SH 10 Wuxi Biologics (Cayman) Inc. 49,407 9.83%
11 Ping An Bank Co., Ltd. 39,289 11.44% SZ 11 Sunny Optical Technology (Group) Company 48,734 18.88%
12 Shenzhen Mindray Bio-Medical Elect 33,995 7.16% SZ 12 Semiconductor Manufacturing International 44,707 20.83%
13 Foshan Haitian Flavouring And Food 30,865 6.39% SH 13 Hong Kong Exchanges And Clearing Limited 44,687 7.10%
14 Inner Mongolia Yili Industrial Group 26,487 13.37% SH 14 Cnooc Limited 42,275 12.29%
15 China Yangtze Power Co.,Ltd. 25,257 5.84% SH 15 Geely Automobile Holdings Limited 34,630 13.58%
16 Nari Technology Co., Ltd. 24,991 14.45% SH 16 China Resources Beer (Holdings) Company 30,791 16.31%
17 Wuxi Apptec Co., Ltd. * 23,829 6.23% SH 17 Li Ning Company Limited 27,613 13.51%
18 Wanhua Chemical Group Co.,Ltd. 22,551 13.92% SH 18 Innovent Biologics, Inc. 20,418 17.66%
19 Shenzhen Inovance Technology Co., 22,008 10.77% SZ 19 Agricultural Bank Of China Limited* 18,878 23.71%
20 Wuxi Lead Intelligent Equipment 21,725 18.28% SZ 20 Country Garden Services Holdings Company 16,739 8.22%
21 Yunnan Energy New Material Co.,Ltd. 21,547 9.73% SZ 21 Kingdee International Software Group 15,953 18.98%
22 Luxshare Precision Industry Co.,Ltd. 21,223 8.14% SZ 22 China Pacific Insurance (Group) Co. Ltd.* 15,732 25.88%
23 Sungrow Power Supply Co.,Ltd. 21,006 8.59% SZ 23 Smoore International Holdings Limited 15,460 7.75%
24 Aier Eye Hospital Group Co.,Ltd. 20,390 6.42% SZ 24 Microport Scientific Corporation 15,409 14.46%
25 Beijing Oriental Yuhong Waterproof 20,296 15.80% SZ 25 Man Wah Holdings Limited 14,944 24.21%
Source: Bloomberg and HKEX as of Jul 2021 (* A&H shares), does not add up due to roundings.
1. Shanghai Northbound: RMB1,246bn; Shenzhen Northbound: RMB1,213bn
2. Shanghai Southbound: HK$1,350bn; Shenzhen Southbound: HK$1,025bn
3. Ranked by share value in CCASSS
48Comparison of Exchanges – Top 10 stocks by turnover value(1)
US Listed
HKEX SSE SZSE
Chinese Stocks
Company H- H-
(RED = YTD A-Share Mkt.
YTD Share Mkt.
Company YTD Share Mkt.
Cap Company YTD ADT
Chinese ADT YTD Cap Company Cap ADT YTD Rank
ADT Rank ADT YTD Rank
companies) ADT ADT
TENCENT KWEICHOW MOUTAI EAST MONEY ALIBABA GROUP HOLDING-SP
2,066 - 1 1,324 - 1 1,284 - 9 4,086
HOLDINGS LTD CO LTD-A INFORMATION CO-A ADR*
MEITUAN- LONGI GREEN
1,123 - 4 1,171 - 9 BYD CO LTD -A 1,220 354 4 NIO INC – ADR* 3,959
CLASS B ENERGY TECHNOL-A
ALIBABA GROUP CONTEMPORARY
849 - 2 1,029 - 1
HOLDING LTD CHINA THREE AMPEREX TECHN-A BAIDU INC - SPON ADR* 2,169
1,090 - 44
GORGES RENEWAB-A
XIAOMI CORP- WULIANGYE YIBIN CO
711 - 11 1,008 - 2
CLASS B LTD-A PINDUODUO INC-ADR* 1,079
PING AN INSURANCE
909 382 8
HONG KONG GROUP CO-A
BOE TECHNOLOGY
EXCHANGES & 418 - 9 933 - 24 JD.COM INC-ADR* 953
COSCO SHIPPING GROUP CO LT-A
CLEAR 725 114 23
HOLDINGS CO-A
CHINA MOBILE TIANQI LITHIUM CORP-A 848 - 28
412 - 6 SANY HEAVY XPENG INC – ADR* 699
LTD 710 - 25
INDUSTRY CO LTD-A
PING AN GANFENG LITHIUM CO
711 101 22 BILIBILI INC-SPONSORED ADR* 654
INSURANCE 382 909 12 LTD-A
GROUP CO-H TONGWEI CO LTD-A 649 - 31
SUNGROW POWER TENCENT MUSIC ENTERTAINM-
BYD CO LTD-H 354 1,220 21 709 - 21 471
SUPPLY CO LT-A ADR*
CHINA NORTHERN
GCL-POLY 633 - 43
RARE EARTH -A TCL TECHNOLOGY
ENERGY 345 - 157 620 - 52 LI AUTO INC – ADR* 453
ZIJIN MINING GROUP GROUP CORP-A
HOLDINGS LTD 614 106 33
CO LTD-A
KUAISHOU LUXSHARE PRECISION
321 - 16 CHINA TOURISM 619 - 12 GAOTU TECHEDU INC* 425
TECHNOLOGY 584 - 11 INDUSTR-A
GROUP DUTY F-A
Top 10: 33% of Total ADT Top 10: 12% of Total ADT Top 10: 11% of Total ADT Top 10: 69% of Total ADT
New economy stocks now account for significant portions of the turnover
Source: Bloomberg data as of Jul 2021
1. Ranked by YTD ADT (US$m).
* Dual class voting share
49Market activity in Mainland and Hong Kong markets
ADT RMB billion Index
3,500 2015 :+6% 2016: -11% 2017: +22% 2018: -25% 2019:+36% 2020:+27% 2021:-8% 6,000
3,000 5,000
2,500
4,000
2,000
1,579
3,000
1,500
1,009
712 927 914 927 2,000
831 774 843
1,000 698 640
537 526 517 593 585
502 443 442 508 453 474 440
428 537 405 459 609 527
300 321 518 487 1,000
500 303 475
868 323 296 277 332 325 400
342 309 242 247 250 246 232 272 273
394 499 377 171 187 400 400 356
215 184 193 221 201 195 231 203 227 173 260 260 186 168 313 240 299
0 129 134 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2015 2016 2017 2018 2019 2020 2021
SSE ADT1 (LHS) SZSE ADT (LHS) CSI 300 (RHS)
ADT HK$ billion
Index
2015: -7% 2016:+0.4% 2017: +36% 2018: -14% 2019:+9% 2020:-3% 2021:-5%
400 35,000
350 30,000
300
25,000
250
20,000
200
15,000
150
224 10,000
100 184
166 151
146 141 141
107 107 121 114 5,000
50 86 101 93 92 86 101 95
72 70 63 67 64 74 78 77 77
- 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Jul
2015 2016 2017 2018 2019 2020 2021
HKEX ADT (LHS) Hang Seng Index (RHS)
Source: HKEX, SSE, SZSE & Bloomberg
Note: Data as of Jul, 2021 except SSE and SZSE as of Jun 2021
1. SSE ADT excludes STAR companies.
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