HKEX Investor Presentation - HKEX Group
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HKEX Investor Presentation Investor Relations Oct, 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 YTD Q3 2021
Leading diversified exchange group in the Asian Time Zone
REVENUE: REVENUE:
HK$19.2bn HK$16.2bn
HK’s only exchange group
EBITDA: EBITDA:
World’s leading IPO venue – ranked #1 in 7 of the past 12 years1 HK$14.6bn HK$12.8bn
PAT: PAT:
Pioneer in Mainland capital markets connectivity HK$11.5bn HK$9.9bn
EPS: EPS:
London Metal Exchange – globally leading base metals exchange HK$9.11 HK$7.79
Primary & Secondary Markets Post Trade Market Access
Equity & Financial
Cash Equities Commodities
Derivatives Post Trade Technology
Market Data
30% 16% 7% 39% 5%
YTD Q3
2021
Revenue
Share2
Note: Figures for YTD Q3 2021 (unless otherwise stated)
1. From 2009 to 2020
2. Corporate items accounted for 3% of total revenue in 1H 2021 and are not shown in above pie charts.
4Q3 2021 key highlights
1| Financial Performance
• Record nine-month revenue and other income of HK$16.2bn (+15%YoY) with core
business revenue up by 14%YoY, driven by record Headline ADT
• Record nine-month Stock Connect revenue and other income of HK$2.1bn
(+55%YoY)
• Profit attributable to shareholders at record nine-month high of HK$9.9bn (+15%YoY)
2| Business and Strategy
• Good performance set against volatile macro backdrop
• Robust IPO market – #4 globally by IPO funds raised (HK$285.9bn, nine-month record
high); Record IPO pipeline
• Strong Connect scheme performance – record high ADT across all platforms
• MSCI China A 50 Connect Index Futures launched, providing international investors
with a new risk management tool to manage their China exposure
• SPAC consultation paper published for new listing route in Hong Kong
• Continued market microstructure, technology enhancements and product launches
• MOU with HKSTP signed giving HKEX access to HKSTP’s deep pool of biotech
industry experts, supporting our biotech listing applications process
5Core business well-positioned for organic and structural growth
A Broad Product Ecosystem Attracting Diverse Mainland and International Investor Base
Securities ADT Derivatives ADV
Futures Options
(HK$ billion) CAGR (’000 contracts)
CAGR
+10.8% Southbound Connect +11.4% Risk Management
180 1,212
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 #4 CAGR CAGR
• Biotech 123
174 183
+51.6% A-share Inclusion in
138
218 154 • WVR +72.3% 91 46
122 126 Global Benchmarks
110 • Secondary Listings
73
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 37 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 Sep 2021.
6A Diverse international investor base attracted to broad product ecosystem
Algo / Quant Participation in Cash Market
Stock
Futures &
Due to…
Options Stock
Short Connect Relatively low • Presence of stamp duty
Selling (circa. 10-20% of ADT) • Minimal high frequency trading
• Single market structure
A-share
CBBCs Derivatives
Algo / Quant Participation in Derivatives Market
Bond
Driven by…
Stocks Connect
DWs Relatively high • No stamp duty
(circa. 40-60% of ADV) • Market maker participation
• Capital efficiency
Asia & EM
Swaps Index Futures Recent initiatives and future focus
Market microstructure enhancements: leading to better price
Index Currency discovery and trade efficiency
Futures& Futures &
ETPs Options Targeted marketing and client support: Growing and diverse client
Options
ecosystem
Incentives: driving increased volumes
Product cross-selling: creating arbitrage opportunities
7A HKEX’s equity derivatives suite now provides full coverage of
Asian underlying
Equity market cap HKEX derivatives offerings
Most competitive offshore A-share equity
derivatives future
US$6tn Hong Kong HSI and HSCEI product suite
– MSCI China A 50 Connect Index covers
50 stocks from the largest stocks in the
China A large-cap universe
– Sector-balanced index, mirroring sector
Mainland MSCI China A 50 Connect weights of MSCI China A index, the most
US$13tn
China Index Futures representative index for global investors
– Highly complementary to Stock Connect
for risk management needs, offering
investors and risk managers an one-stop-
shop solution to trade and manage their
Asia MSCI Asia and Emerging China exposures
US$17tn (ex. China) Market product suite
– Catalyst for further index inclusion
weightings
Trade Asia, in Asia
8A MSCI Asia and EM product suite – steady trading volume against keen
competition
ADV (No. of Contracts)
9,955
10,000 9,450 9,648 9,554 9,356 Others1
8,810 8,834
9,000 MSCI Philippines NTR
8,016 7,924
8,000 7,339 7,616 MSCI TW NTR
6,771
7,000 MSCI CN FREE NTR Intense competition from SGX
6,000
5,072 MSCI JP NTR (FTSE Taiwan Capped products)
5,000
MSCI TW
4,000 while still recording meaningful
3,000
2,000
ADV since launch
1,000
250 478 Expect to see gradual migration
0
Jul-20 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul-21 Aug- Sep- with upcoming rolls
20 20 20 20 20 21 21 21 21 21 21 21 21
OI (No. of Contracts)
Continue to work on further
microstructure enhancements to
100,000 94,847
90,000 Others1 meet investor needs, such as
80,000 77,660
74,548 MSCI TW NTR
holiday trading
70,000 62,975 63,579 66,329 63,754 MSCI Indonesia NTR
59,806 61,940
60,000
45,006 MSCI CN FREE NTR
50,000 44,066 43,386 44,682
40,000 MSCI JP NTR
30,000 MSCI TW
20,000
10,000 3,967
330
0
Jul-20 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul-21 Aug- Sep-
20 20 20 20 20 21 21 21 21 21 21 21 21
Reinforces Hong Kong’s role as the leading global market in the Asian Time Zone,
with the broadest suite of MSCI derivatives products
1. Mainly from India, Malaysia NTR and TW 25/50.
9B Strongly Performing IPO Market boosted by New Economy Issuers and
Secondary Listings
2021 Jan – Sept Fundraising Summary
…raising
HK$285.9bn
IPO Funds Raised
40 New Economy
(#4 globally)
& Biotech Companies Listed… HK$248.2bn
+32% YoY +50% YoY
IPO Funds Raised by Segments
No. of IPO
– Total 174 218 183 154 73
– New Economy1
– Biotech2 14 27 38 36 28
5 9 14 12 World’s second-largest fund raising hub for biotech
0
companies
IPO Funds Raised
(HK$ bn) HKEX Biotech Summit 2021 (Virtual) – which attracted
400.2
1,800+ registrations and saw more than 7,000 viewers of
400
our live broadcast
314.2
300
288.0 285.9 Ongoing listing reforms
217.0
124.0
138.5 Shortening of IPO settlement cycle
200
128.5 16.1 40.4 221.4 Enhancing listing regime for overseas issuers
18.5
100 44.4 Enhancing the bookbuilding and price discovery aspects
145.5 159.6 142.7
26.8 of IPOs (cornerstone investors, pricing flexibility,
84.1
37.7 clawback mechanism)
0
2017 2018 2019 2020 2021
Others Biotech New Economy
Source: HKEX, as of Sept 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
19.8%
3 KUAISHOU - W 05/02/2021 48.30 15.5%
7.3%
4 BUD APAC 30/09/2019 45.08
19.7% 16.6%
1.3%
5 XIAOMI - W 09/07/2018 42.61 9.8%
29.9
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
8.5
9 JD LOGISTICS 28/05/2021 28.27 3.0%
3.0
10 NTES - S 11/06/2020 24.26
2018 2019 2020 2021 YTD
As of Sep 2021, 17% of cash ADT and 20% of single stock option ADV were contributed by the top 10 IPOs since 2018
Source: HKEX, as of Sep 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-Sep-21 HKEX NASDAQ FINRA ADF 3 NYSE NYSE Others (US)
Arca
2.7%
BABA - SW 3,835.6 26/11/2019 16% 12% 33% 8% 15% 17%
33.0%
5.1%
JD - SW 1,036.1 18/06/2020 19% 26% 26% 9% 2% 17%
17.2%
4.5% 1%
NTES - S 527.5 11/06/2020 26% 30% 22% 15%
12.1% 7%
3.3% 1%
BIDU - SW 494.8 23/03/2021 7% 30% 35% 20%
6.5% 7%
7.5% 1%
BILIBILI - SW 246.8 29/03/2021 14% 32% 27% 19%
17.2% 8%
5.2%
ZTO EXPRESS - SW 204.2 29/09/2020 4% 15% 28% 8% 26% 19%
4.5%
9.8%
YUM CHINA - S 200.1 10/09/2020 7% 14% 30% 6% 28% 15%
4.1%
4.7%
TRIP.COM - S 156.8 19/04/2021
3.8% 6% 37% 26% 9% 2% 20%
7.0%
HUAZHU - S 123.9 22/09/2020 2%
4.2% 4% 31% 37% 18%
8%
5.8%
NEW ORIENTAL - S 32.0 09/11/2020
8.4% 7% 12% 37% 6% 18% 20%
Source: HKEX, FactSet, as of 30 Sep 2021
1. Ranked by market cap (Total: 14 as of 30 Sep 2021)
2. Based on total CCASS balance deducting the balance of main custodian bank as reference
3. 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%
2,879
CAGR Bond Connect
CAGR launch US$592bn
2,542 4.0%
600
2,340 2,297 3.5%
+78.7% 2,097 500
+79.7% 3.0%
400 2.5%
1,429 YTD ADT Sep
1,138 300 2.0%
927
668 789 200
1.5% RMB26.2bn
531 1.0%
364 100
125 186 115 0.5%
3 3 0 0.0%
2015
2016
2017
2018
2019
2020
2021
2015
2016
2017
2018
2019
2020
2021
3
Continuing portfolio diversification by Mainland and Inclusion of Mainland bonds into global fixed income
international investors indices
Inclusion of A shares into major global benchmarks Easier access to the Mainland bond market via more
trading platforms
Increasing selection of new economy companies in
Southbound Stock Connect Increasing use of RMB globally and need to reinvest
into RMB assets
Benefiting from the increased capital flow into and out of Mainland China,
in particular inbound flows driven by international index inclusions
Source: HKEX, Bond Connect, ChinaBond, SCH;
1. Shanghai-HK and Shenzhen-HK Stock Connect was launched in Nov 2014 and Dec 2016 respectively.
2. Foreign participation in CIBM was first allowed in 2010 when the PBOC rolled out a Pilot Scheme to allow foreign financial institutions to invest in CIBM.
3. Data as of 30 Sep, 2021.
13D Focus on revenue growth and cost discipline
2013-2016 2016-2020
ADT re-rating
Stock Connect – Shanghai
Stock Connect – Shanghai + Shenzhen
After-hours trading
Continuing growth in derivatives
LME fee commercialisation
Listing reforms and new economy issuers
Launch of LME Clear
Revamped investment income approach
Revenue (HK$ 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
OUR MARKETS OUR PEOPLE OUR OPERATIONS
Enhancing Corporate Governance best Giving back to our communities with Upholding high standard of
practices among listed companies in HKEX Foundation’s Charity corporate governance and board
Hong Kong covering board diversity, Partnership Programme, Impact process within the organisation
director independence, ESG Funding Scheme, University
Scholarship Programme, as well as Ongoing promotion of employees’
Ongoing promotion of ESG standards other ongoing donations and awareness of our legal and compliance
with the updated ESG Guide, ESG volunteering activities for the obligations with continuous training
Academy webinar series, e-Learning community and internal communications
series and updated ESG guidance
Promoting talent learning and Enhancing HKEX’s resilience with
letter and active involvement in global
development with AI-empowered climate-related action plans
ESG standardisation engagement
platform and supporting employee
Promoting sustainable and green wellbeing and engagement across the
finance via publication of insights and Group through People Survey and
research papers through STAGE and HKEX Big Day Out
the LME’s sustainability plan; senior
executives leading the sustainable Championing workplace diversity
finance dialogues in local and global through HKEX Networks (gender,
forums different abilities, families and
LGBT+), internal training, advocacy
and partnership with professional
groups, universities and NGOs
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
YTD Q3 2021 vs YTD Q3 2020
Record financial results with revenue and profit up 15%
(HK$)
Net investment income of
Total revenue & other income(2) Core business revenue(3)
Corporate Funds
+15% +14% +26%
$14.1bn $16.2bn $13.7bn $15.6bn $364mn $460mn
2020 2021 2020 2021 2020 2021
EBITDA PAT Basic earnings per share
+17% +15% +15%
$10.9bn $12.8bn
2020 2021
$8.6bn $9.9bn $6.80 $7.79
2020 2021 2020 2021
Margin(4)
78% 79%
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 (YTD Q3 2020: $70mn; YTD Q3 2021: $118mn)
3. Core business revenue represents total revenue and other income, excluding net investment income of Corporate Funds and HKEX Foundation (HKEXFN) donation income (YTD Q3 2020:
$34mn; YTD Q3 2021: $113mn).
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
18YTD Q3 2021 vs YTD Q3 2020
Record revenue and profit driven by record Headline ADT and Stock
Connect volumes
Revenue and Operating Profit attributable to HKEX
EBITDA Basic earnings per share
other income(1) expenses(2) shareholders(3)
(HK$ mn) (HK$)
Total Total Total Total Total
+ 15% + 6% + 17% + 15% + 15%
Core business Core business Core business Core business Core business
+ 14% + 5% + 17% + 14% + 13%
ADT
78% Margin(4) 79%
HK$125.7bn +43% HK$180.3bn
16,218
HKEXFN
14,091 113
HKEXFN (5) COF 460 12,771
34 COF 364
10,883 HKEXFN
24 COF 460 9,861
COF 364 8,580 HKEXFN COF 460 7.79
Core business COF 364 24 6.80 HKEXFN
Core business 15,645 COF 0.36
Core business COF 0.29 0.02
13,693 Core business
3,138 3,329 12,287 Core business Core business
HKEXFN HKEXFN 10,542 9,377 Core business Core business
57 Core business 89 Core business 8,239 7.41
6.53
3,081 3,240 HKEXFN HKEXFN HKEXFN
(23) (23) (0.02)
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
Trading & clearing fees from record Opex due to higher staff costs EBITDA margin 1% PAT % lower than EBITDA due EPS % same as PAT
Headline ADT and Northbound ADT, and IT expenses to the deferred tax charge of
partly offset by HKFE ADV Foundation donations $160mn arising from the approval
Listing fees from record newly listed of UK tax rate in 2021 from 19%
DWs and CBBCs to 25% effective from April 2023
Depository fees from e-IPO fees, (2020: $61mn)
scrip fees and Stock Connect portfolio
fees
Net investment income from
interest income, partly offset by
$227mn gains of collective
investment schemes
1. Represents gross revenue and other income before deducting transaction-related expenses (YTD Q3 2020: $70mn; YTD Q3 2021: $118mn)
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs and share of results of joint ventures
3. For the purpose of this presentation, tax impact of COF is not considered when calculating the PAT attributable to COF.
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
5. COF represents net investment income of Corporate Funds.
19Q3 2021 vs Q2 2021
Strong quarter on quarter performance with Q3 PAT 17% higher than Q2
Profit attributable to
Revenue and other income(1) Operating expenses(2) EBITDA
HKEX shareholders(3)
(HK$ mn)
Total Total Total Total
+ 7% - 1% + 10% + 17%
Core business Core business Core business Core business
+ 11% + 1% + 14% + 24%
ADT
77% Margin(4) 79%
HK$151.3bn +9% HK$165.3bn
5,309
4,953 HKEXFN COF 32
(5)
HKEXFN COF 209 39 4,164
28 3,798 HKEXFN COF 32
3,251
19
COF 209
2,770 HKEXFN COF 32
19
Core business COF 209
Core business 5,238
4,716 Core business
Core business 4,113 Core business
1,119 1,108 3,605 Core business 3,200
HKEXFN HKEXFN 2,577
44 Core business 20 Core business
1,075 1,088
HKEXFN HKEXFN
(16) (16)
Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021 Q2 2021 Q3 2021
Trading and clearing fees from Stable EBITDA margin 2% due to in PAT % more than EBITDA due to
Headline ADT (9%) and revenue the deferred tax charge of $160mn
Derivatives ADV (23%) arising from the approval of UK
Stock Exchange listing fees from in tax rate from 19% to 25%
newly listed DWs and CBBCs recognised in Q2 2021
Partly offset by:
Net investment income from losses of
collective investment scheme in Q3 vs
gains in Q2
Depository fees from seasonality
1. Represents gross revenue and other income before deducting transaction-related expenses (Q2 2021: HK$36mn; Q3 2021: HK$37mn)
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs and share of results of joint ventures
3. For the purpose of this presentation, tax impact of COF is not considered when calculating the PAT attributable to COF.
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
5. COF represents net investment income of Corporate Funds.
20Q3 2021 vs Q3 2020
PAT 3% lower than 2020 as higher revenue from higher ADT was offset by
lower investment income
(1)
Profit attributable to
Revenue and other income Operating expenses (2) EBITDA
HKEX shareholders (3)
($ million)
Total Total Total Total
0% + 1% - 0% - 3%
Core business Core business Core business Core business
+ 5% + 2% + 6% + 5%
ADT
79% Margin(4) 79%
$141.1bn +17% $165.3bn
5,309 5,309
(5) HKEXFN
HKEXFN COF 298 COF 32
39
34 4,177
HKEXFN 4,164
HKEXFN
COF 298 19 COF 32
3,347
5 3,251
HKEXFN COF 298 HKEXFN
5 19 COF 32
Core business Core business
4,977 5,238
Core business Core business
4,113 Core business
1,093 1,108 3,874 Core business
3,200
HKEXFN HKEXFN 3,044
29 20
Core business Core business
1,064 1,088
2020 2021 2020 2021 2020 2021 2020 2021
Trading and clearing fees from Stable EBITDA margin maintained at 79% PAT % change lower than EBITDA
headline ADT (17%) due to D&A
Stock Exchange listing fees from in
newly listed DWs and CBBCs
Offset by:
Net investment income from losses of
collective investment schemes in Q3
2021 vs gains in Q3 2020, and
interest income
1. Represents gross revenue and other income before deducting transaction-related expenses (Q3 2020: $39mn; Q3 2021: $37mn)
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of results of joint ventures
3. For the purpose of this presentation, tax impact of COF is not considered when calculating the PAT attributable to COF.
4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
5. COF represents net investment income of Corporate Funds.
21Segmental revenue – YTD Q3 2021 vs YTD Q3 2020
Higher revenues driven by strong Cash and Post Trade segments
(HK$ mn)
544 119 178 16,218
1,178 116 581
781
14,091
(8)
403
662
6,315
5,771
1,099
+32% +5% -1% +9% +18% +44%
1,107
2,627
2,511
4,815
3,637
2020 Cash Derivatives Commodities Post Trade Technology Corporate Items 2021
% Trading fees Trading fees Trading fees Clearing fees Network fees Gains from
from record ADT of from HKFE ADV, from LME from ADT & SIs, due to usage of external portfolio
Change equity products and partly offset by chargeable ADV and record NB the Orion Central but partly offset by
year-on-year
record NB Stock record stock Stock Connect ADT Gateway & China interest income
Connect ADT options volume and Depository fees Connect Central HKEX Foundation
ADT of DWs, from e-IPO fees, Gateway, and donation income
CBBCs & warrants scrip fees and new throttle fees $79mn
Listing fees due Stock Connect Hosting services
to record newly portfolio fees fees due to
listed DWs and Interest income subscriptions
CBBCs from lower interest
rates
1. Headline ADT up 43% (YTD Q3 2020: $125.7bn; YTD Q3 2021: $180.3bn); ADT of equity products included under Cash segment up 49% (YTD Q3 2020: $106.8bn; YTD Q3 2021: $159.6bn);
ADT of DWs, CBBCs and warrants included under Equity and Financial Derivatives segment up 10% (YTD Q3 2020: $18.9bn; YTD Q3 2021: $20.7bn)
22Net investment income – YTD Q3 2021 vs YTD Q3 2020
Net investment income impacted by low interest rate environment
2021: $929mn (2020: $1,483mn)
Net investment income by funds Average fund size
(HK$ mn) (HK$ bn)
246.6
34.2
201.8
Corporate Funds Corporate Funds Margin Clearing 30.2
(External Portfolio) (Internal) Corporate Funds
Funds House Funds
Margin Funds
189.8
155.3
Clearing House
Funds
1,049 22.6
16.3
2020 2021
Net investment income by category of investments
(HK$ mn)
Cash & Collective
455 Debt
bank investment FX
securities
deposits schemes
298 293 1,402
162
566
71 70 298
14 47 32 71
33
(37)
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
Lower investment income due to reduced interest rates, partly offset by higher fair value gains from external portfolio
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
• Introduced MarketAxess as 3rd trading platform for Northbound; along with the launch of Southbound
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
• Published consultation paper on proposals to create a SPAC listing regime in Hong Kong
Broadening our product ecosystem across asset classes
• MSCI China A 50 Connect Index Futures launched, providing international investors with a new and
effective risk management tool for their China exposure
• MSCI suite of Asia and Emerging Markets Index Futures and Options; Hang Seng TECH Index Futures
and Options
• USD and CNH denominated Silver Futures; mini USD/CNH Futures; LME cash-settled metals Futures
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)
• Migrated parts of 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 FINI to launch in Q4 2022; reducing the IPO settlement cycle from T+5 to T+2
• Completion of upgrades to multiple core trading systems and relocation of secondary data centre
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
584 571
600
475
400
200
0
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
YTD
Source: LME data as of Sep 2021
1. Excluding Admin Trades, 2021 YTD: 545,598 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
• LME launched LMEpassport, an online service and centralised digital register helping participants meet
the LME’s responsible sourcing requirements
• LME confirmed collaboration with Metalshub to establish an online base metals spot trading platform
starting with low carbon aluminium early next year, to help further its sustainability agenda
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 76%
Market 78% 77%
of total market cap
Cap SZSE 78%
SSE 65%
By
87% 67%
Turnover of total turnover
SZSE 65%
SSE 29% 590
By 28%
525 21% of total number of
Number
SZSE 34% 852 companies
Stock Connect covers the majority of the market by market cap and turnover
Source: Wind, HKEX
1. Data as of Sep 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 $2,094mn in YTD Q3 2021, 55% higher than YTD Q3 2020
($1,354mn)
Stock Connect average daily turnover (HK$ bn)
Shenzhen Southbound Shenzhen Northbound (1) Total average daily turnover 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
300 13.5%
12.7% 15.0%
11.7%
9.6% 9.9%
250 9.0% 8.5% 10.0%
6.8% 7.3% 210.0
6.1% 6.1% 6.4% 213.0
5.3% 5.7% 5.4% 5.8% 5.6%
4.8% 4.8%
200 3.7% 3.9% 31.3 21.9 5.0%
1.7% 2.3%
158.5 20.2
29.5 157.1
150 13.2 139.1 18.7 0.0%
13.9 13.6 16.6
106.7 90.4
95.8 14.1 82.3
100 8.7 -5.0%
12.9 8.8 75.2 65.2
67.5 10.6 63.3
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 69.8 77.6
17.9 21.4 23.9 56.2 56.7
8.6 10.9 13.5 48.1
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 Q1 21 Q2 21 Q3 21
Stock Connect Northbound and Southbound Trading ADT reached RMB123.2bn and $46.2bn respectively in YTD Q3 2021
Stock Connect revenue continued to set record highs,
reaching 13% of the Group’s total revenue and other income in YTD Q3 2021 (FY 2020: 10%)
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
123.2 124.3
MSCI 2,653 2021
rebalancing 2,542
2,491 2,459
days 2,461 2,452 2,629
2,477
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 Sep 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$58k
234 152 146
MAINLAND CHINA OTHER 209 139
135 134 127
117
167
131 142 86 89
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
391 383 397 1,136
369
339
884
270 812
260
159 432
84 251 207
39 96 123 133
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 Sep 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 Sep 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$19tn Growing International Demand
• Yield differential against developed markets
US$13tn
• Inclusion in emerging market bond indexes
• Geographical and asset class diversification
Bank Assets Equities Bonds
• Growing convertibility of RMB / SDR inclusion
• More efficient access – Bond Connect
Source: CBIRC (Jun 2021), PBOC, SSZ and SZSE ( Sep 2021), BIS and IMF (Dec 2019 for the Bond vs GDP chart)
39Bond Connect has significantly grown foreign participation in China’s bond market
Bond Connect Sep 2021 YTD ADT: RMB 26.2bn
1
Foreign Participation in the CIBM Growth Drivers
Foreign Holdings in Chinese Bonds Foreign Ownership (%)
(US$ billion) Inclusion of Mainland bonds in global fixed income
indexes (BBGA, GBI-EM, WGBI)2
RQFII QFII Long-only 3.5%
investment investment investment US$592bn
600 Greater adoption of RMB globally and
Bond
Pilot scheme 4.0% need to reinvest in RMB assets
Connect
to access
launch
CIBM
500 3.5%
Improving access to the Mainland bond market
3.0%
400
Foreign Ownership %
2.5%
68%
64%
300
2.0% Achievable
target
46%
1.5% 41%
200 39% 38% Average: 38.5% 15%
1.0% 29%
100
0.5% 13%
8%
~3-4%
0 0.0%
(1)
DE FR AU UK IT CA US RU JP China
Foreign participation in the CIBM increased by 356% since launch of Bond Connect in July 2017(1)
Number of Bond Connect participants has grown to 2,879 as of Sep 2021
Source: ChinaBond + SCH, Bloomberg, BIS
1. Foreign participation in the CIBM data as of Sep 2021
2. BBGA is Bloomberg Barclay Global-Aggregate, GBI-EM is J.P. Morgan Government Bond Index-Emerging Markets series, WGBI is FTSE World Government Bond Index
40Agenda 01 | Key Performance and Growth Drivers 02 | Group Financial Update 03 | Strategic Plan 2019-2021 04 | China Connectivity 05 | Appendix
Financial highlights – Income Statement
% of Revenue & % of Revenue &
(HK$ mn, unless stated otherwise) YTD Q3 2021 YTD Q3 2020 YoY Change
Other Income Other Income
Results
Revenue and other income 16,218 100% 14,091 100% 15%
Less: Transaction-related expenses (118) (1%) (70) (0%) 69%
Revenue and other income less transaction-related
16,100 99% 14,021 100% 15%
expenses
Operating expenses (3,329) (21%) (3,138) (22%) 6%
EBITDA 12,771 79% 10,883 77% 17%
Depreciation and amortisation (1,006) (6%) (827) (6%) 22%
Operating profit 11,765 73% 10,056 71% 17%
Finance costs and share of results of joint ventures (58) (0%) (85) (1%) (32%)
Profit before taxation 11,707 72% 9,971 71% 17%
Taxation (1,880) (12%) (1,398) (10%) 34%
Loss attributable to non-controlling interests 34 0% 7 (0%) 386%
Profit attributable to HKEX shareholders 9,861 61% 8,580 61% 15%
Capex 723 845 (14%)
Basic earnings per share HK$7.79 HK$6.80 15%
Headline ADT on the Stock Exchange HK$180.3 bn HK$125.7 bn 43%
1. % does not add up due to roundings.
42Performance by operating segment
Corporate Group Group
HK$ mn Cash Derivatives Commodities Post Trade Technology
Items YTD Q3 2021 YTD Q3 2020
Revenue and other income 4,815 2,627 1,099 6,315 781 581 16,218 14,091
% of Group Total 30% 16% 7% 39% 5% 3% 100% 100%
Less: Transaction-related
- (95) - (23) - - (118) (70)
expenses
Revenue and other income less
4,815 2,532 1,099 6,292 781 581 16,100 14,021
transaction-related expenses
Operating expenses (458) (505) (485) (659) (228) (994) (3,329) (3,138)
EBITDA 4,357 2,027 614 5,633 553 (413) 12,771 10,883
% of Group Total 34% 16% 5% 44% 4% (3%) 100% 100%
EBITDA margin(1) 90% 80% 56% 90% 71% N/A 79% 78%
Depreciation and amortisation (1,006) (827)
Finance costs (116) (139)
Share of results of joint ventures 58 54
Profit before taxation 11,707 9,971
1. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.
43Operating expenses – YTD Q3 2021 vs YTD Q3 2020
Continued 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)
+ 5% + 8% - 4% - 25% + 56% + 16% + 6% + 22%
Excl.
+
donations
5%
3,329
3,138
2,252
2,150
1,006
827
465 504
326
280
91 87 95 71 57 89
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
due to payroll due to Stable fees incurred for Stock Code Incentives, due to staff due to
adjustments and maintenance strategic initiativesBalloting Charity including those costs, IT costs, depreciation of
part-time wages for expenses for new IT (e.g. consulting fee Scheme started to related to MSCI Foundation new and upgraded
new initiatives, and systems and for HKATS review in go through HKEX index futures donations and IT systems and
appreciation of GBP network upgrades 2020) Foundation since contracts marketing software (e.g.
1 July 2020 expenses, partly NextGen Risk
offset by Management)
professional fees
1. Includes product marketing and promotion expenses
2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of results of joint ventures
44Quarterly performance
Q3 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 5,099 5,309
4,953
4,773 4,809
4,288 4,290 3,987
4,150 4,044 4,102 4,009 4,177 4,164
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 3,251
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 1,108
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 Q3
2016 2017 2018 2019 2020 2021
YTD Q3 2021 results reached record nine-month 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 (Mar 21 - Aug 21) velocity*
= Last month (Aug 21) velocity
= ADT
537% 260% 72%
150% 60% 45% 74% 154% 69% 41% 81% 386% 221% 65% 107% 253% 77% 66% 208% 38%
277.2
111.1
82.4 85.0
64.6
28.7 23.6
11.5 17.1 15.7
9.0 6.3 10.5 8.3 9.3 4.9 1.0
NASDAQ NYSE Cboe TMX B3 LSE ENX Deutsche SZSE SSE HKEX(2) JPX KRX NSE ASX TWSE SGX
Group Börse
* Source: WFE and Bloomberg (Aug 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.
46Stock Connect shareholding value
Northbound(1): RMB2,542bn; Southbound(2): HK$2,297bn
Northbound Top 25(3) Southbound Top 25(3)
Share value % of issued Share value % of issued
Rank Stock name in CCASS shares Venue Rank Stock name in CCASS shares
(RMB million) (HK$ million)
1 Kweichow Moutai Co.,Ltd. 162,169 7.05% SH 1 Tencent Holdings Limited 278,615 6.28%
2 Midea Group Co., Ltd. 90,450 18.60% SZ 2 China Construction Bank Corporation* 147,413 10.98%
3 Contemporary Amperex Technology 87,730 7.16% SZ 3 Industrial And Commercial Bank Of China * 103,381 27.50%
4 China Merchants Bank Co.,Limited * 72,287 6.94% SH 4 Hsbc Holdings Plc 78,480 9.22%
5 Longi Green Energy Technology Co., 55,442 12.41% SH 5 China Mobile Limited 77,288 8.03%
6 China Tourism Group Duty Free 49,460 9.74% SH 6 Meituan 76,382 5.04%
7 Wuliangye Yibin Co.,Ltd. 47,676 5.59% SZ 7 Xiaomi Corporation 63,643 11.87%
8 Shenzhen Mindray Bio-Medical 41,939 8.95% SZ 8 Cnooc Limited 48,659 12.52%
9 Jiangsu Hengrui Medicine Co.,Ltd. 35,808 11.19% SH 9 Wuxi Biologics (Cayman) Inc. 47,660 8.87%
10 Ping An Bank Co., Ltd. 35,021 10.06% SZ 10 Great Wall Motor Company Limited* 42,822 48.12%
11 Ping An Insurance (Group) Company* 33,218 6.34% SH 11 Sunny Optical Technology (Group) Company 41,095 18.28%
12 China Yangtze Power Co.,Ltd. 33,138 6.62% SH 12 Anta Sports Products Limited 39,594 9.97%
13 Inner Mongolia Yili Industrial Group 32,905 14.71% SH 13 Hong Kong Exchanges And Clearing Limited 38,322 6.29%
14 Gree Electric Appliances,Inc. 31,816 13.64% SZ 14 Geely Automobile Holdings Limited 36,662 16.69%
15 Foshan Haitian Flavouring And Food 30,193 6.51% SH 15 Semiconductor Manufacturing International 33,731 19.34%
16 Wuxi Apptec Co., Ltd. * 29,780 7.65% SH 16 China Resources Beer (Holdings) Company 30,845 16.53%
17 Nari Technology Co., Ltd. 28,849 14.57% SH 17 Li Ning Company Limited 24,685 10.96%
18 East Money Information Co., Ltd. 25,243 7.10% SZ 18 Innovent Biologics, Inc. 18,902 0.00%
19 Shenzhen Inovance Technology Co., 23,870 14.44% SZ 19 China Shenhua Energy Company Limited* 18,832 30.60%
20 Yunnan Energy New Material Co.,Ltd. 23,860 9.54% SZ 20 Agricultural Bank Of China Limited* 18,381 22.31%
21 Wanhua Chemical Group Co.,Ltd. 22,992 15.12% SH 21 China Pacific Insurance (Group) Co. Ltd.* 16,357 25.45%
22 Luxshare Precision Industry Co.,Ltd. 21,662 8.60% SZ 22 Smoore International Holdings Limited 16,245 7.44%
23 Wuxi Lead Intelligent Equipment 20,759 18.99% SZ 23 Byd Company Limited* 15,504 6.08%
24 Sungrow Power Supply Co.,Ltd. 19,873 9.19% SZ 24 China Resources Power Holdings Company 15,332 14.19%
25 Aier Eye Hospital Group Co.,Ltd. 18,498 6.40% SZ 25 Kingdee International Software Group 14,281 15.78%
Source: Bloomberg and HKEX as of Sep 2021 (* A&H shares), does not add up due to roundings.
1. Shanghai Northbound: RMB1,319bn; Shenzhen Northbound: RMB1,223bn
2. Shanghai Southbound: HK$1,282bn; Shenzhen Southbound: HK$1,015bn
3. Ranked by share value in CCASSS
47Comparison of Exchanges – Top 10 stocks by turnover value(1)
US Listed
HKEX SSE SZSE
Chinese Stocks
Company H- H-
(RED = YTD A-Share Mkt.
YTD Share Mkt.
Company YTD Share Mkt.
Cap Company YTD ADT
Chinese ADT YTD Cap Company Cap ADT YTD Rank
ADT Rank ADT YTD Rank
companies) ADT ADT
TENCENT KWEICHOW MOUTAI EAST MONEY ALIBABA GROUP HOLDING-SP
2,053 - 1 1,326 - 1 1,271 - 9 4,164
HOLDINGS LTD CO LTD-A INFORMATION CO-A ADR*
MEITUAN-CLASS QINGHAI SALT LAKE
1,059 - 3 LONGI GREEN 1,254 - 23 NIO INC – ADR* 3,402
B 1,181 - 12
ENERGY TECHNOL-A INDUSTRY-A
ALIBABA GROUP
805 - 2 CHINA ENERGY
HOLDING LTD 1,031 - 125 BYD CO LTD -A 1,223 349 4 BAIDU INC - SPON ADR* 1,843
ENGINEERING COR
XIAOMI CORP-
625 - 13
CLASS B CHINA THREE CONTEMPORARY
878 - 39 1,044 - 1 PINDUODUO INC-ADR* 1,009
GORGES RENEWAB-A AMPEREX TECHN-A
HONG KONG
EXCHANGES & 384 - 9 PING AN INSURANCE WULIANGYE YIBIN CO
CLEAR 852 366 8 1,023 - 2 JD.COM INC-ADR* 909
GROUP CO-A LTD-A
PING AN
INSURANCE 366 852 12 CHINA NORTHERN TIANQI LITHIUM CORP-A 967 - 28 XPENG INC – ADR* 614
850 - 42
GROUP CO-H RARE EARTH -A
COSCO SHIPPING BOE TECHNOLOGY
CHINA MOBILE 784 113 35 825 - 20 BILIBILI INC-SPONSORED ADR* 598
355 - 6 HOLDINGS CO-A GROUP CO LT-A
LTD
SANY HEAVY GANFENG LITHIUM CO
BYD CO LTD-H 349 1,223 24 758 - 33 781 104 21 DIDI GLOBAL INC* 489
INDUSTRY CO LTD-A LTD-A
GCL-POLY
ENERGY 345 - 143 SUNGROW POWER
TONGWEI CO LTD-A 696 - 27 732 - 24 LI AUTO INC – ADR* 404
HOLDINGS LTD SUPPLY CO LT-A
KUAISHOU ZIJIN MINING GROUP TENCENT MUSIC ENTERTAINM-
320 - 20 635 97 31 GEM CO LTD-A 619 - 98 398
TECHNOLOGY CO LTD-A ADR*
Top 10: 33% of Total ADT Top 10: 11% of Total ADT Top 10: 10% of Total ADT Top 10: 69% of Total ADT
New economy stocks now account for significant portions of the turnover
Source: Bloomberg data as of Sep 2021
1. Ranked by YTD ADT (US$m).
* Dual class voting share
48Market 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:-7% 6,000
3,000 5,000
2,500
4,000
2,000
1,579
3,000
1,500 1,244
1,009
712 927 914 927 2,000
831 774 843
1,000 698 640
537 526 517 593 585 719
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
394 499 377 171 187 400 400 525
215 221 201 231 203 227 260 260 313 240 299 356
184 193 195 173 129 134 186 168
0 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 3Q
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:-10%
400 35,000
350 30,000
300
25,000
250
20,000
200
15,000
150
224 10,000
100
166 151 165
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 3Q
2015 2016 2017 2018 2019 2020 2021
HKEX ADT (LHS) Hang Seng Index (RHS)
Source: HKEX, SSE, SZSE & Bloomberg
Note: Data as of Sep, 2021
1. SSE ADT excludes STAR companies.
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