HKEX Investor Presentation

HKEX Investor Presentation

Investor Relations

Feb, 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.

HKEX – Leading Vertically Integrated Exchange Group

4

Note: Figures for FY2020 (unless otherwise stated)

1. From 2009 to 2020

2. Corporate items accounted for 5% of total revenue in 2020 and are not shown on this slide.

HKEX GROUP

Leading diversified exchange group in the Asian Time Zone

HK’s only exchange group

World’s leading IPO venue – ranked #1 in 7 of the past 12 years1

Pioneer in Mainland capital markets connectivity

London Metal Exchange – globally leading base metals exchange

REVENUE:

HK$16.3bn

EBITDA:

HK$12.3bn

PAT:

HK$9.4bn

EPS:

HK$7.49

DPS:

HK$6.71(90% payout)

Cash EquitiesEquity & Financial

DerivativesCommodities

TechnologyPost Trade

Primary & Secondary Markets Post Trade Market Access

2020

Revenue

Share2

26% 17% 7%40%

5%

Market Data

FY2019

REVENUE:

HK$ 19.2bn

EBITDA:

HK$14.6bn

PAT:

HK$11.5bn

EPS:

HK$9.11

DPS:

HK$8.17(90% payout)

FY2020

Financials

2020 Key Highlights

5

1 | Financial Performance

• Record financial results for third consecutive year

• Record revenue and other income of HK$19,190mn with core business revenue up by 24%

YoY, reflecting higher trading and clearing fees driven by record headline ADT

• Record Stock Connect revenue and other income of HK$1,926mn (+91% YoY)

• Net investment income down by 18% YoY at HK$2,228mn, due to lower fair value gains

from collective investment schemes and lower interest income

• Profit attributable to shareholders at record high of HK$11,505mn (+23% YoY)

2 | Business and Strategy

• Strong IPO market – #2 globally by IPO funds raised (HK$400.2bn, 27% YoY) and #4 by

number of new company listings (154)

• Strong performance in Connect schemes – record high ADT across all channels

• Launched 38 MSCI Asia and Emerging Markets Index Futures, representing a major step

forward in the expansion of HKEX’s derivatives product portfolio

• LME demonstrated resiliency and adaptability, including a successful temporary migration of

trading activities from the Ring to electronic pricing since March

• Launched HKEX’s Sustainable and Green Exchange (STAGE), Asia’s first multi-asset

sustainable investment product platform; Launch of HKEX Foundation

21.830.0 33.9

25.216.4

36.6 40.151.3

1.3

110 122138 126

174

218183

154

0

50

100

150

200

250

0

20

40

60

80

100

120

2021

Core Business Well-Positioned for Organic and Structural Growth

6

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 Jan 2021.

Broad Product Ecosystem Attracting Diverse Mainland and International Investor Base

Transformational Growth from China’s Opening1IPOs Driving ADT Growth

Southbound Connect

Jumbo IPOs

Global Investors

Risk Management

Algo / Quant Investors

After-hours Trading

+10.8% +11.4%

Futures OptionsCAGR

CAGR

+72.3% +51.6%

Northbound ADT2

(RMB billion)

Southbound ADT2

(HK$ billion)

CAGR CAGR

Total IPO funds raised (US$ billion)

# of IPOs

New Economy Listing

Reforms

• Biotech

• WVR

• Secondary Listings

Strong Pipeline of

Mainland and

International Listings

Global fundraising rank Continuing Portfolio

Diversification

A-share Inclusion in

Global Benchmarks

SB Connect Limited by

Investor Eligibility Cap

Securities ADT

(HK$ billion)

Derivatives ADV

(’000 contracts)

A

B C

Focus on Revenue Growth and Cost DisciplineD

3 3

3 3

2016

2013

2018

2014

2017

2015

2019

Global fundraising rank

2020

3

63 69

106

6788

10787

129

2462015

2013

2014

2016

2019

2018

2017

2020

2021

2013

2015

2014

2016

2017

2018

2020

762

2019

2021

533 577

870769

1,2041,069

1,133

1,513

#3 #2 #1 #1 #3 #1 #1 #2 #7

6 5 1020

42

91

138

2020

2015

2016

2017

2018

2019

2021

3 410 13 11

24

70

2020

2019

2015

2016

2017

2018

2021

14

Diverse International Investor Base Attracted to Broad Product Ecosystem

7

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. HKEX signed a licence agreement with MSCI to introduce 39 futures and options contracts in Hong Kong based on a suite of indexes in Asia and Emerging Markets, subject to regulatory

approval and market conditions (38 already launched since Sep 2020).

A

Short

Selling

Stock

Options Stock

Futures

DWs

CBBCs

Index

Futures

OTC

ETPs Currency

Futures

Stock

Connect

Bond

Connect

A-share

Derivatives1

Stocks

Recent initiatives and future focus

Market microstructure enhancements: leading to better price

discovery and trade efficiency

Targeted marketing and client support: onboarding 10+ clients

each year

Incentives: driving increased volumes

Product cross-selling: creating arbitrage opportunities

Algo / Quant Participation in Cash Market

Due to…

• Presence of stamp duty

• Minimal high frequency trading

• Single market structure

Relatively low(circa. 10-20% of ADT)

Algo / Quant Participation in Derivatives Market

Relatively high(circa. 40-60% of ADV)

Driven by…

• No stamp duty

• Market maker participation

• Capital efficiency

Asia & EM

Index Futures2

New MSCI Suite – Growing Product Ecosystem to Connect Global Trades

8

1. All contracts denominated in USD unless otherwise specified

2. Started trading in HKEX since 2018

A

Key Dynamics

Expanding our product UNDERLYING

Licenced a suite of MSCI indexes in Asia and Emerging

Markets to introduce 39 futures and options contracts (38

already launched as of Sep 2020)

Broadening and deepening LIQUIDITY

Allow investors to Trade Asia, in Asia

Complement existing HSI and HSCEI index futures

Enhancing our COMPETITIVENESS

Better capital efficiency

Creating a competitive one-stop shop for China and Asian

exposures

Reinforces Hong Kong’s role as the leading global market in the Asian Time Zone, with the broadest suite of MSCI

derivatives products

NTRSingle country

Price ReturnSingle country

Options

MSCI Taiwan

MSCI Australia

MSCI China Free

MSCI Hong Kong

MSCI India

MSCI Indonesia

MSCI Japan

MSCI Japan (JPY)

MSCI Malaysia

MSCI New Zealand

MSCI Philippines

MSCI Singapore

MSCI Singapore Free

MSCI Taiwan

MSCI Taiwan 25/50

MSCI Thailand

MSCI Vietnam

Regional

MSCI AC Asia ex Japan2

MSCI EM Asia

MSCI EM Asia ex China

MSCI EM Asia ex Korea

MSCI EM EMEA

MSCI EM ex China

MSCI EM ex Korea

MSCI EM LatAm

MSCI Emerging Markets

MSCI Pacific

MSCI Pacific ex Japan

Regional

MSCI China Free

MSCI India

MSCI Indonesia

MSCI Japan (JPY)

MSCI Malaysia

MSCI Philippines

MSCI Taiwan 25/50

MSCI Thailand

MSCI Singapore Free

(SGD)

MSCI Taiwan

MSCI Vietnam

MSCI Emerging Markets

HKEX MSCI Product Suite1

New MSCI Suite –ADV and Open Interest slowly building up

9

A

0

2,000

4,000

6,000

8,000

10,000

Aug-20Jul-20 Dec-20Sep-20 Jan-21Oct-20 Nov-20

250 478

5,072

8,8109,643 9,648 9,554 Others1

MSCI Indonesia NTR

MSCI China Free NTR

MSCI TH NTR

MSCI TW 25/50

MSCI TW

0

20,000

40,000

60,000

80,000

100,000

3,967

Jul-20 Dec-20Aug-20 Sep-20

330

Oct-20 Nov-20 Jan-21

44,066

94,847

77,660

62,975 59,806

Others1

MSCI TW NTR

MSCI TW

MSCI Indonesia NTR

MSCI TH NTR

MSCI JP NTR

ADV (No. of Contracts)

Intense competition from

SGX (FTSE Taiwan Capped

products) while still recording

meaningful ADV since

launch

Encouraging capture of OI

against global landscape

(e.g. migration of large client

position from Eurex in Oct)

Expect to see continuous

migration with upcoming rolls

OI (No. of Contracts)

1. Mainly from MSCI Malaysia NTR, India NTR and EM Asia NTR

ETP – A Growing Contributor along with Market Structure Enhancements

10

A

Our aspiration is to become Asia’s ETP Marketplace

ACTIVE ETFS

MARKET MAKER BUY-IN

EXEMPTION

INTRODUCE ICSD SETTLEMENT

MODEL

-2X INVERSE PRODUCTS

DESIGNATED SPECIALISTS

CONTINUOUS QUOTING AND

NEW SPREAD TABLE (JUN)

$4.5B

$5.0B

$6.4B

2018

2019

2020

ADT

ADT

LOWER

TRADING COSTS

IMPROVED

MARKET QUALITY

DEEPENED

LIQUIDITY POOL

GREATER

PRODUCT DIVERSITY

OFC

STRUCTURE

A-SHARE L&I PRODUCTS (JUL)

MARKET MAKER

STAMP DUTY EXEMPTION (AUG)

ADT

2020

HONG KONG/MAINLAND ETF

CROSS-LISTING (OCT)

No. of IPO

– Total

– New Economy1

– Biotech2

IPO Funds Raised by Segments

Source: HKEX, as of Dec 2020.

1. Include Non-18A Biotech companies

2. Only include Chapter 18A Biotech companies

IPO Funds Raised

(HK$ bn)

2020 Jan - Dec Fundraising Summary

174 218 183

14 27 38

0 5 9

IPO Funds Raised

(#2 globally)50 New Economy

& Biotech Companies Listed…

…raising

HK$257.4bn

+27% YoY +67% YoY

HK$400.2bn

84.1 145.5 159.6 142.7

18.5 16.1 40.4

44.4

124.0 138.5

217.0

0

100

200

300

400

2017 2018 2019 2020

Others Biotech New Economy

128.5

288.0

314.2

154

36

14

400.2

Strongly Performing IPO Market boosted by New Economy Issuers and

Secondary Listings

B

World’s second-largest fund raising hub for biotech

companies

HKEX was delighted to host its first ever Southeast Asia

Forum on 3 Dec 2020

Dialogues with the Biotech Community with PhiRDA -

attracted 292,000+ views

HKEX Biotech Summit 2020 (Virtual) – received

extensive interest from scientists, biotech entrepreneurs,

investors, technology experts and policymakers

Ongoing listing reforms

Shortening of IPO settlement cycle

Enhancing listing regime for overseas issuers

Enhancing the bookbuilding and price discovery aspects

of IPOs (cornerstone investors, pricing flexibility,

clawback mechanism)

11

% of respective ADT

% of single stock option ADV

Jumbo IPOs Contributing to Increased Trading Activity

12

Source: HKEX, as of Jan 2021. S – Secondary listings; W – Weighted Voting Rights; H – H shares

1. Ranked by IPO size.

In 2021, 19% of cash ADT and 18% of stock option ADV is contributed by the top 28 IPOs since 2018

28 Jumbo IPOs > US$1bn (HK$7.8bn) since Jan 2018

Rank Company name IPO date IPO size

(HK$bn)

1 Alibaba Group - SW 26/11/2019 101.20

2 China Tower - H 08/08/2018 58.80

3 Budweiser Brewing APAC 30/09/2019 45.08

4 Xiaomi Corporation - W 09/07/2018 42.61

5 JD.COM - SW 18/06/2020 34.56

6 Meituan Dianping - W 20/09/2018 33.14

7 JD Health International 08/12/2020 31.00

8 Netease - S 11/06/2020 24.26

9 Yum China - S 10/09/2020 17.27

10 China Bohai Bank - H 16/07/2020 15.90

11 GDS - SW 02/11/2020 14.88

12 Evergrande Property 02/12/2020 14.27

13 ESR Cayman Ltd. 01/11/2019 14.06

14 Tigermed - H 07/08/2020 12.31

15 China Resources Mixc 09/12/2020 12.27

16 New Oriental - S 09/11/2020 11.65

17 Blue Moon Group 16/12/2020 11.31

18 ZTO Express - SW 29/09/2020 11.28

19 Shimao Services 30/10/2020 9.95

20 Nongfu Spring - H 08/09/2020 9.60

21 Shenwan Hongyuan - H 26/04/2019 9.09

22 Hansoh Pharmaceutical Group 14/06/2019 9.04

23 Topsports International 10/10/2019 9.01

24 Ping An Healthcare &Tech 04/05/2018 8.77

25 Jiangxi Bank - H 26/06/2018 8.60

26 WuXi AppTec - H 13/12/2018 8.28

27 Smoore 10/07/2020 8.19

28 Sunac Service 19/11/2020 8.00

Rising contribution to volumes from Jumbo IPOs

3.0%

10.5%

7.3%

24.3%

15.6%

3.3

9.2

31.4

46.6

2019 2021 YTD2018 2020

Cash Market ADT (HK$ bn) contributed

by the Jumbo IPOs and related Structured Products ADT

B

1.3%

3.0%

19.0%

17.6%

Continuous Trading Volume Migration and ADR conversion from

Secondary Listings

Strong Boost to HK Markets Trading

HKEX Trading Share – 2020 YTD ADR conversion to HK shares

Number of Hong Kong (freely traded) shares as % of total issued shares globally

Alibaba, NetEase and JD.com secondary listings have contributed ~8% ADT YTD 2020 to Hong Kong market’s liquidity,

with a clear trend of ADR conversion to HK shares

Source: HKEX, FactSet, as of 31 December 2020 (Quarterly update)

Note: Alibaba is listed on NYSE, while NetEase and JD.com are listed on NASDAQ

1. Based on total CCASS balance deducting the balance of main custodian bank as reference

B

13

Alibaba NetEase JD.com

5.1%

8.8%

11/06/2020

(IPO)

Dec-20

+73%

2.5%

Dec-2026/11/2019

(IPO)

16.5%

+560%

5.1%

18/06/2020

(IPO)

12.5%

Dec-20

+145%% of

TradingAlibaba NetEase JD.com

SEHK 18.1% 32.9% 22.5%

FINRA ADF 29.5% 16.5% 26.9%

NYSE 15.4% 2.4% 1.5%

NASDAQ 11.3% 27.4% 26.3%

NYSE Arca 7.8% 7.2% 7.8%

Other US

Exchanges17.8% 13.5% 15.0%

ADT/ADV in HKEXAlibaba,

NetEase & JDMarket Total %

Equities+ DWs+CBBCs

(HK$bn)10.9 129.5 8.4

SSO

(Volume, ‘000)24.8 526.2 4.7

0

100

200

300

400

500

600

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Transformational Growth from China’s Opening

14

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 Jan 31st, 2021.

Benefiting from the increased capital flow into and out of Mainland China,

in particular inbound flows driven by international index inclusions

C

Stock Connect1 Bond Connect

+79.7%+78.7%

Northbound(RMB billion)

Southbound(HK$ billion)

Portfolio Value Portfolio Value

Total Foreign Participation in CIBM2

(RMB billion)

Bond Connect

launch

Foreign Holdings in Chinese Bonds

(US$ bn)

Foreign

Ownership (%)

US$535bn

3.4%

Continuing portfolio diversification by Mainland and

international investors

Inclusion of A shares into major global benchmarks

Increasing selection of new economy companies in

Southbound Stock Connect

Inclusion of Mainland bonds into global fixed income

indices

Easier access to the Mainland bond market via more

trading platforms

Increasing use of RMB globally and need to reinvest

into RMB assets

Investors

Onboarded

>2,400

YTD ADT

RMB29.4bn

CAGRCAGR

333

125 186

531668

1,429

2,3402,461

2018

2021

2015

2020

2017

2016

2019

115

364

927789

1,138

2,097

2,541

2020

2015

2016

2019

2017

2018

2021

Focus on Revenue Growth and Cost Discipline

15

Reaping rewards from the structural growth initiatives that have already been implemented

D

Revenue (HK$ million) EBITDA (HK$ million)

2013-2016 2016-2020

Stock Connect – Shanghai

After-hours trading

LME fee commercialisation

Launch of LME Clear

ADT re-rating

Stock Connect – Shanghai + Shenzhen

Continuing growth in derivatives

Listing reforms and new economy issuers

Revamped investment income approach

CAGR

EBITDA

Margin

CAGR

8,7239,849

13,37511,116

13,18015,867 16,311

19,190

201820142013 201920162015 20202017

+8.4%

+14.6%

5,946 6,891

10,0857,661

9,61411,757 12,263

14,641

20192013 20172014 2015 2016 2018 2020

+8.8%

+17.6%

68% 70% 75% 69% 73% 74% 75% 77%

Focus on Revenue Growth and Cost Discipline

16

Increased operating leverage from revenue growth, delivered by structural drivers combined with opex discipline

D

Operating Expenses (HK$ million) Profit Attributable to Shareholders (HK$ million)

2013-2016 2016-2020

Investment in growth initiatives to capture

China opportunities

Upgrading core infrastructure to strengthen

technological foundation

Reaping rewards of past investments and

benefiting from operating leverage

Increased cost discipline

Investment in automation and operational

efficiency

CAGR

Net Profit

Margin

CAGR

2,777 2,9583,290 3,455 3,566

4,110 4,0484,549

20162013 2014 2015 2017 20192018 2020

+7.6%

+7.1%

4,552 5,165

7,9565,769

7,4049,312 9,391

11,505

2013 20172014 2015 20192016 2018 2020

+8.2%

+18.8%

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%.

52% 52% 59% 52% 56% 59% 58% 60%

1

Sustainability is at our core, and is business critical

17

Progressing our financial markets and communities for the benefit of all

OUR MARKETS

Swift COVID-19 response with timely

disclosure & AGM guidance and

communications

Ongoing promotion of ESG standards with

the updated ESG Guide, new e-Learning

series and updated ESG guidance letter and

active involvement in global ESG

standardisation engagement

Promoting sustainable and green finance

with the launch of STAGE and the LME’s

sustainability plan

OUR PEOPLE

Official launch of HKEX Foundation with the

flagship $20m Charity Partnership

Programme, $10m COVID-19 emergency

relief donations and HKEX University

Scholarship, as well as other ongoing

donations and e-volunteering activities for

the community

Supporting employees’ wellbeing across

the Group, especially during COVID-19

Championing workplace diversity through

internal training, advocacy and partnership

with professional groups, universities and

NGOs

OUR OPERATIONS

Engaged the markets in adopting

sustainable business practices, e.g. e-IPO

regime, LME passport

Internal evaluations of board performance

Ongoing enhancement of employees’

awareness of our legal and compliance

obligations

Implementation of HKEX Future Workplace

and digitalisation of internal workflows to

improve efficiency and reduce paper

consumption

TALENT ENGAGEMENTRISK CULTUREREPUTATION

Recognised as a sustainability leader with the constituent status in various sustainability indexes,

e.g., DJSI, FTSE4Good, Hang Seng Corporate Sustainability Index series

Agenda





05 | Appendix


19

Key Financial Highlights

Record revenue and profit for third consecutive year

Low interest rate environment impacted investment income

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 (2020: HK$110mn; 2019: HK$51mn)

3. Core business revenue represents total revenue and other income, excluding net investment income and HKEX Foundation donation income (2020: HK$106mn; 2019: $Nil).

4. EBITDA margin is calculated based on EBITDA divided by revenue and other income less transaction-related expenses.

EBITDA

+19%

Margin(4)

75% 77%

$12.3bn

2019

$14.6bn

2020

Core business revenue(3) Net investment income

+24% -18%

$13.6bn

2019

$16.9bn

2020

$2.7bn

2019

$2.2bn

2020

+18%

Total revenue & other income(2)

$16.3bn

2019

$19.2bn

2020

PAT

+23%

$9.4bn

2019

$11.5bn

2020

+22%

Basic earnings per share

$7.49

2019

$9.11

2020

$6.71

2019

$8.17

2020

Dividend per share (full year)

+22%

(HK$)

2020: Record Revenue and Profit for Third Consecutive Year

20

1. Represents gross revenue and other income before deducting transaction-related expenses (2020: HK$110mn; 2019: HK$51mn)

2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, share of profits/(losses) of joint ventures, and costs arising from the proposed combination with London

Stock Exchange Group plc (LSEG)

3. For the purpose of this presentation, tax impact of NII is not considered when calculating the PAT attributable to NII.


5. From 2H 2020 onwards, both the donation income from the Stock Code Balloting Charity Scheme and the amounts previously paid directly to the Hong Kong Community Chest were channelled

through HKEX Foundation (HKEXFN). As a result, HKEX recorded donation income of HK$106mn under revenue and other income and HKEX Foundation charitable donations of HK$112mn

under operating expenses in 2020.

Basic earnings per shareOperating

expenses (2) EBITDAProfit attributable to HKEX

shareholders (3)

Staff costs from HC from BayConnect acquisition & payroll adj, higher recruitment costs and special gratuity payments

IT costs from new IT systems and network upgrade

Professional fees fromstrategic projects and businessinitiatives

Foundation donations(5)

EBITDA margin 2% PAT % more than EBITDA due

to LSEG costs of HK$123mn in

2019

EPS % less than PAT due to

shares issued for scrip dividends

Revenue and

other income(1)

Trading & clearing fees from

record headline ADT and record

Stock Connect revenue

Listing fees from record newly

listed DWs and CBBCs

Net Investment income (NII) due

to HK$302mn gains from external

portfolio (2020: HK$487mn; 2019:

HK$789mn) and interest income

Core business13,582

Core business16,856

Core business3,997

Core business4,327

Core business9,534

Core business12,419

Core business6,662

Core business9,283

Core business5.31

Core business7.35

HKEXFN106

HKEXFN112

HKEXFN(6)

HKEXFN(6)

NII 2,729

NII 2,228

NII 2,729

NII 2,228

NII 2,729

NII 2,228

NII 2.18

NII 1.76

16,311

19,190

3,997 4,439

12,263

14,641

9,391

11,505

7.499.11

2019 2020 2019 2020 2019 2020 2019 2020 2019 2020

ADTMargin(4)75% 77%

HK$87.2bn +49% HK$129.5bn

Total

+ 23%

Core business

+ 39%

Core business

+ 30%

Total

+ 18%

Total

+ 19%

Core business

+ 24%

(HK$ mn)

Total

+ 22%

Core business

+ 38%

(HK$)

Total

+ 11%

Core business

+ 8%

21

Q4 Reflects Fewer Trading Days, Lower Stock Connect and Derivatives

Volumes, and Seasonality in Expenses

Revenue and other income (1)

Trading and clearing fees from

trading days and Northbound ADT

Partly offset by:

NII due to HK$207mn gains from

external portfolio (Q4: HK$416mn; Q3:

HK$209mn), partly offset by interest

income

Operating expenses (2) EBITDAProfit attributable to

HKEX shareholders (3)

Staff costs due to special gratuity

payments

Foundation donations

Remaining increases due to seasonality

EBITDA margin 5% PAT % more than EBITDA due to in

D&A

Core business4,630

Core business4,282

Core business1,065

Core business1,246

Core business3,526 Core business

2,996Core business

2,696 Core business2,163

HKEXFN34

HKEXFN72

HKEXFN28

HKEXFN55

HKEXFN6 HKEXFN

17 HKEXFN6 HKEXFN

17

NII 645NII 745

NII 645NII 745

NII 645NII 745

5,309 5,099

1,0931,301

4,1773,758

3,3472,925

Q3 2020 Q4 2020 Q3 2020 Q4 2020 Q3 2020 Q4 2020 Q3 2020 Q4 2020

HK$141.0bnHK$141.1bnMargin (4) 74%79%

-0%

ADT

Total

- 13%

Core business

- 20%

Core business

- 8%

Core business

- 15%

Total

- 4%

Total

- 10%

(HK$ mn)

1. Represents gross revenue and other income before deducting transaction-related expenses (Q3 2020: HK$39mn; Q4 2020: HK$40mn)

2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, and share of profits/(losses) of joint ventures

3. For the purpose of this presentation, tax impact of NII is not considered when calculating the PAT attributable to NII.


Core business

+ 17%

Total

+ 19%

Higher Revenue Across All Business Segments, Offsetting Lower

Net Investment Income

22

Trading fees & tariffs

from record ADT

of equity products

and record Stock

Connect trading

revenue

Trading fees & tariffs

from DWs, CBBCs &

warrants from

trading fees from

record newly listed

DWs & CBBCs, and

no. of trades

Trading fees from

futures and options

from proportion

of higher fee contracts

traded

Listing fees due to

record newly listed

DWs and CBBCs

Trading fees from

LME fee increase

Clearing fees from

ADT & SIs, and

record Stock Connect

clearing revenue

Depository fees

from e-IPO service

fees & Stock Connect

portfolio fees

Other revenue from

accommodation

income

Investment income

due to interest

rates

Network fees

due to usage of

the Orion Central

Gateway and China

Connect Central

Gateway by EPs

Hosting services

fees due to

subscriptions

NII of Corporate

Funds due to

gains from external

portfolio and

interest rates

HKEX Foundation

donation income

(HK$ mn)

Change year-on-year

%

(299)

1,345 253 551,411 114

16,311

19,190

YTD Q4 2019 Cash Equity and FinancialDerivatives

Commodities Post Trade Technology Corporate Items YTD Q4 20202019 2020

-24%+37% +8% +4% +23% +14% +18%

Segmental revenue

1. Headline ADT up 49% (2020: HK$129.5bn; 2019: HK$87.2bn); ADT of equity products included under Cash segment up 60% (2020: HK$110.9bn; 2019: HK$69.2bn); ADT of DWs, CBBCs and

warrants included under Equity and Financial Derivatives segment up 3% (2020: HK$18.6bn; 2019: HK$18.0bn)

Higher EBITDA in all business segments

23


2. The acquisition of BayConnect was completed in June 2019 and its opex is included under Technology Segment (2020: $93m; 2019: $34m).

EBITDA

3,0432,437

731

5,402

551

12,263

4,396

2,549762

6,752

606

14,641

Trading fees & tariffs $1,309m

from record ADT of equity products

and record Stock Connect trading

revenue

Opex $8m due to lower

allocated costs of Listing Division

from proportion of listing

fees from equities

Trading fees & tariffs from DWs,

CBBCs & warrants $89m from

trading fees from record newly

listed DWs & CBBCs, and no. of

trades

Trading fees from futures and

options $93m from proportion

of higher fee contracts traded

Listing fees $290m due to record

newly listed DWs and CBBCs

Transaction-related expenses

due to MSCI license fees ($47m)

Opex $97m due to allocated

costs of Listing division from

listing fees from DWs and CBBCs

Trading fees $53m from LME

fee increase

Opex $24m due to IT

maintenance expenses &

professional fees for strategic

projects and operational resilience

Clearing fees $1,195m from

ADT & SIs, and record Stock

Connect clearing revenue

Depository fees $212m from

e-IPO service fees & Stock

Connect portfolio fees

Other revenue $105m from

accommodation income

Investment income $110m due

to interest rates

Opex $46m due to staff costsfrom annual payroll increment, bonus and LTI

EBITDA margin 2%

Network fees $35m due to

usage of the Orion Central

Gateway and China Connect

Central Gateway by EPs

Hosting services fees $42m

due to subscriptions

BayConnect contributed $70m of

IT service income (2019: $33m)

Opex $59m due to

BayConnect opex (2)

+ 44% + 5% + 4% + 25% + 10% + 19%

CashEquity & Financial

DerivativesCommodities Post Trade Technology

Group Total

(incl. Corp. Items)

Share of Group EBITDA (before Corporate Items)

%

25% 29%

EBITDA Margin

83% 88% 83% 81% 52% 52% 87% 89% 69% 67%

75% 77%

20% 17% 6% 5% 44% 45% 5% 4%

2019 2020

%

($ million)

100% 100%

2019 2020 2019 2020 2019 2020 2019 2020 2019 2020

(1)

Lower Net Investment Income in a Low Interest Rate Environment

24

External portfolio - lower gains reflecting market valuations

Internal funds - lower income from reduced interest rates, partly

offset by higher fund sizes

(HK$ mn)

Net investment income by category of investments

Debt

securities

Collective

investment

schemes

Cash &

bank

depositsFX

1,842

103

789

(5)

1,709

64

487

(32)

Average fund size

13.6 16.7

128.8158.8

27.9

30.5Corporate Funds

Margin Funds

Clearing HouseFunds

2019 2020

170.3

206.0

(HK$ bn)

789

444

1,387

109

487

355

1,308

78

Net investment income by funds

(HK$ mn)

Corporate Funds (External Portfolio)

Margin

Funds

Corporate Funds (Internal)

Clearing

House Funds

2019 2020 2019 2020 2019 20202019 2020 2019 2020 2019 20202019 2020 2019 2020

2020: HK$2,228mn (2019: HK$2,729mn)

Agenda





05 | Appendix


The Global Markets Leader in the Asian Time Zone –

Connecting China, Connecting the World

Our 2019-2021 Strategic Vision

26

Global

Markets

Global

Liquidity

China

Markets

Global

Underlying

China

Liquidity

China

Underlying

Globally ConnectedChina Anchored Technology Empowered

Facilitating China’s

internationalisation and

investment diversification

Bringing global liquidity

to China and Asia Pacific

underlying

Leveraging new technology

for modernisation and

growth

China Anchored – Facilitating China’s Internationalisation and Investment Diversification

Expanding and Enhancing Stock Connect

• Stock Connect inclusion of eligible A-shares listed on Shanghai’s STAR Market; their

corresponding H-shares; and pre-revenue biotech companies listed in Hong Kong

• 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 and fee reduction

• Increase in choices of FX settlement bank

Extending our China onshore capabilities

• Announced investment of a minority stake in the newly-established Guangzhou Futures

Exchange in Feb 2021

• Launch of natural gas and cement products on the QME

27

Strategic Plan on Track – 2020 Highlights

3 | Strategic Plan on Track – 2020 HighlightsGlobally 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

• Paperless listing & subscription regime; effective in July 2021

Broadening our product ecosystem across asset classes

• MSCI suite of 38 Asia and Emerging Markets Index Futures

• Hang Seng TECH Index Futures (Nov 2020) and Options (Jan 2021)

• USD and CNH denominated Silver 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

• Launched the Hong Kong-Mainland ETF Cross-listing Scheme

• Introduced a new spread table and continuous quoting market making obligations to

enhance liquidity

Improving market microstructure

• Enhanced Volatility Control Mechanism (VCM) and Pre-Opening Session (POS)

• Temporary migrated LME trading activities from the Ring to electronic pricing

• Implemented new rules and disclosures to optimise the LME’s warehouse network28


Globally Connected – Bringing Global Liquidity to China and Asia Pacific Underlying

3 | Strategic Plan on Track – 2020 HighlightsTechnology Empowered – Leveraging New Technology for Modernisation and Growth

Modernising our systems

• FINI concept paper for shortening of IPO settlement cycle

• Relocation of the secondary data centre to become a Tier 3 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

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

29


Technology Empowered – Leveraging New Technology for Modernisation and Growth

2019-2021 Strategy – FICC Themes

30

FIXED INCOME AND CURRENCY COMMODITIES

Facilitate CNY access

Enhance Bond Connect

Expand suite of offshore rates / FX

derivatives on onshore underlying

Build post-trade infrastructure(custody, settlement, collateral management, FX)

Expand product suite

Pricing evolution

Mainland China warehouses

Commodity Connect

Key Components of Our FIC Strategy

31

Expand Existing Platform

Capture CNY Opportunities

Invest in Post-Trade Infrastructure

Bond Connect enhancements

Listed bonds and derivatives

Southbound Bond Connect

CNY accessibility – repository, tracking and monitoring

IRS and repo + Derivatives Connect

CNY trading platform

Custody, settlement and collateral management

Trade repository and monitoring

International linkages

LME Group Integration Process Complete…

32

Source: LME data as of Jan 2021

1. Excluding Admin Trades, 2021 YTD: 517,627 lots.

475

584 634

676 700

670 619 624

730 697

610

544

0

200

400

600

800

1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021YTD

ADV (‘000 lots)6 Dec 2012

HKEX

acquisition

22 Sep 2014

LME Clear

Launch

Post-acquisition

integration and

LME Clear launch

Commercialisation

of the platform

with LP and new

trader programme

Strategic pathway, future

platform development and

revised fee structure

1

…and LME Strategic Development on Track

33

• Continuing the success of the Strategic

Pathway

• New contracts continue to build

liquidity, especially across ferrous suite

• 2020 prioritisation of electronic options

market to simplify and standardise

areas of its market structure

Strategic Pathway

• 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

Sustainability focus

• Significant investment in new trading

platform

• Supporting industry initiatives to enhance

security of off-warrant metal storage

• Investigating solutions to enable the spot

trading and sourcing of specific metal types

• Insourcing warrant depository to streamline

the warrant lodgement and withdrawal

process, and provide significant operational

efficiencies

Continued innovation

• 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

• Opening a market discussion as to acceptable practices for commodities trading going forwards

Market leadership

Market Microstructure Enhancements at HKEX

34

We have achieved 30+ enhancements in the last 2 years and will continue to ensure

competitiveness and efficiency of our markets

Areas of Focus Key Achievements so far Since 2019

Improve Ease

of Access

• Better client onboarding

• Participants system testing enhancements

• Northbound throttle expansion (Stock Connect)

Reduce Frictional

Trading Costs

• Expand Closing Auction Session (Cash)

• After-hours trading extension to 3am (Derivatives)

• New spread table, Market Making enhancements and stamp duty exemption on ETP

market

Improve

Capital Efficiency

• Better cash interest rebates to participants

• Flexibility in Clearing Participants (CP) setup in HK and Stock Connect markets

• Flexibility for Non-CPs in clearing arrangements

Enhance Risk

Management

& Market Integrity

• Revamp Pre-Opening Session and Volatility Control Mechanism (Cash)

• Self-Match Prevention (Derivatives)

• Holiday trading and trading hour enhancements for MSCI products

• Shorten IPO settlement cycle

• Pre-Trade Risk Management Enhancements

• Increase Position Limit for certain products

Selected Initiatives in the Pipeline

We aim to build a quality market and a sustainable ecosystem of policies, participants and products

Agenda





05 | Appendix


The Penetration Level of Equity Market through Stock Connect

36

Source: Wind, HKEX

1. Data as of Dec 2020.

Stock Connect covers the majority of the market by market cap and turnover

Stock Connect Coverage(% of all Mainland & HK listed companies)

31%

38%

20%

% of domestic market included in Stock Connect

MUTUAL MARKET

79%

81%

75%

68%

71%

88%

By

Market

Cap

By

Turnover

By

Number

78%of total market cap

71%of total turnover

29%of total number of

companies

SSE

SSE

SSE

SZSE

SZSE

SZSE

498

574

886

24.6 30.3 21.4 21.6 31.3 40.3 39.8 30.2 29.8 34.9

72.3 54.4

41.9 44.8 50.0 49.6

76.7 21.1 26.6 21.4 23.9

37.0

53.9 52.9

40.9 42.2 51.3

93.7

72.7

59.2 63.3 65.5 61.1

92.5

7.5 6.8

6.3 6.9

9.6

12.3 15.6

10.1 11.2 10.5

18.9

12.3

10.6 12.5

15.2 14.4

35.2

4.3 3.8

3.6 4.3

6.8

8.3 10.2

8.0 8.6

9.7

17.2

12.4

9.9 11.9

14.7 14.1

34.6

6.4 6.0 8.6 10.9 13.5 17.9 21.6 30.6

43.6 37.8

32.0 34.4

57.4 67.5

52.8 56.8

84.7

114.8 118.6

89.2 91.9

106.3

202.1

151.8

121.7 132.5

145.5 139.4

239.1

1.7%2.3%

3.7% 3.9%4.8% 5.3% 5.7% 6.1%

6.8%6.1%

5.4%4.8%

5.8% 5.6%6.4%

7.3%7.9%

9.0% 9.1% 9.0% 8.7%8.0%

10.9%

9.1%8.4%

10.4%9.3%

10.1%

14.2%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

0

50

100

150

200

250

300

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 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21

Stock Connect – Trading Trends

37

Stock Connect revenue continued to set record highs, reaching 10% of the Group’s total revenue and other income

in 2020 (2019: 6%)

Stock Connect generated record revenue of HK$1,926mn in 2020, 91% higher than 2019 (HK$1,009mn)

Stock Connect Northbound and Southbound Trading ADT reached RMB91.3bn and HK$24.4bn respectively in 2020

Shanghai Northbound (1)

Shenzhen Northbound (1)

Shanghai Southbound

Total average daily trading volume

Percentage of Southbound turnover of Hong Kong Market

Stock Connect Average Daily Trading Volume (HK$ bn)

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

Shenzhen Southbound NB record of

RMB191.2bn on

7 Jul 2020

SB record

of HK$99.1bn

on 19 Jan 2021

Stock Connect (Northbound)

Portfolio Value

RMB billion

4.79.6

20.4

41.7

91.3

138.0

34.731.7

77.3

84.3

124.3

MSCI

rebalancing

days

Average Daily Turnover

2018

2017

2019

RMB billion

2020

1,437 1,439

1,298

1,450

1,518

1,687

1,9522,013

1,8921,950 2,089

2,340

785

9511,033

1,050

9321,043

1,054

1,094

1,160

1,2211,264

1,429

601 576 566 592686 662 698 680 719

621 679 668

202 233 253 270 301347 366 404 437

491 502 530

2,461

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

38

Source: HKEX

1. Data as of 31 Jan 2021.

2021

Source: HKEX, SGX, CFFEX, FIA

1. As of Jan 2021.

2. CSI 300 Index Futures was launched in Apr 2010.

3. Numbers in brackets represent the number of constituents within the underlying index.

* 2021 data as of Jan 2021.

Index Futures on China Underlying

39

ADV (’000 contracts)

Hang Seng Index Futures (52)3 HSCEI Futures (51)3

NOTIONAL VALUE1

US$180kNOTIONAL VALUE1

US$71k

FTSE China A50 Index Futures (SGX) (50)3 CSI 300 Index Futures (CFFEX) (300)3

NOTIONAL VALUE1

US$18kNOTIONAL VALUE1

US$247k

2

MAINLAND CHINA

Trading Fee: RMB36.93/contract, 0.0023% to notional value

Trading Fee: HK$3.50/contract, 0.0006% to notional value

Trading Fee: US$1.10/contract, 0.0061% to notional value

Trading Fee: HK$10.00/contract, 0.0007% to notional value

62% 38%

WEIGHTING COMPOSITION1

OTHER

85 94 83 80 6986

131 127

234209

167 165

2014 201920112010 2012 2013 2015 2016 2017 2018 2020 2021*

5061 65

86 89

135 134117

152139 146 140

20122011 20162010 2013 2014 2015 2017 2018 2019 2020 2021*

2 1239

84

159

369

270 260

339391 383

438

2011 201520132010 2012 201720162014 2018 2019 2020 2021*

251 207

432

812884

1,136

17 17 3196 123 143

2010 20202011 20132012 20162014 2015 2017 2018 2021*2019

Tapping into China’s Vast Bond Market

40

Source: CBIRC (Dec 2020), World Bank, PBOC, BIS, IMF

0

25

50

US China Japan UK FR

Bank Assets Equities Bonds

US$48tn

US$8tn

US$16tn

International

Investors

China’s Bond

Market

Key Policy Drivers

• Risk migration from banking sector to bond market

• Greater credit differentiation amid ongoing market

reforms

• Funding needs for economic transition and

infrastructure projects – e.g. Belt & Road; Panda

bonds

• Enhanced bond issuance and disclosure standards

Growing International Demand

• Yield differential against developed markets

• Inclusion in emerging market bond indexes

• Geographical and asset class diversification

• Growing convertibility of RMB / SDR inclusion

• More efficient access – Bond Connect

Outstanding,

US$ tn Relative to GDP

192%

99% 244%

173%222%

0

100

200

300

400

500

600

Pilot scheme

to access

CIBM

RQFII

investment

QFII

investment

Long-only

investment

Bond

Connect

launch

(1)0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Bond Connect Has Significantly Grown Foreign Participation in China’s Bond

Market

41

Source: ChinaBond + SCH, Bloomberg, BIS

1. Foreign participation in the CIBM data as of Jan 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

Foreign participation in the CIBM increased by 313% since launch of Bond Connect in July 2017(1)

Number of Bond Connect participants has grown to over 2,400 as of Jan 2021

Bond Connect Jan 2021 YTD ADT: RMB 29.4bn

68%64%

46%41% 39% 38%

29%

13%8%

~3%

DE FR AU UK IT CA US RU JP China

Growth DriversForeign Participation in the CIBM

Average: 38.5% 15%

Achievable

target

Foreign Ownership %

US$535bn

Foreign Holdings in Chinese Bonds

(US$ billion)

Foreign Ownership (%)Inclusion of Mainland bonds in global fixed income

indexes (BBGA, GBI-EM, WGBI)2

Greater adoption of RMB globally and

need to reinvest in RMB assets

Improving access to the Mainland bond market

3.4%

1

Agenda





05 | Appendix


Financial Highlights – Income Statement

43

(HK$ mn, unless stated otherwise) 2020% of Revenue &

Other Income2019

% of Revenue &

Other IncomeYoY Change

Results

Revenue and other income 19,190 100% 16,311 100% 18%

Less: Transaction-related expenses (110) (1%) (51) 0% 116%

Revenue and other income less transaction-related

expenses19,080 99% 16,260 100% 17%

Operating expenses (4,439) (23%) (3,997) (25%) 11%

EBITDA 14,641 76% 12,263 75% 19%

Depreciation and amortisation (1,197) (6%) (1,044) (6%) 15%

Operating profit 13,444 70% 11,219 69% 20%

Costs relating to proposed combination with LSEG - 0% (123) (1%) (100%)

Finance costs and share of profits less losses of joint

ventures(112) (1%) (145) (1%) (23%)

Profit before taxation 13,332 69% 10,951 67% 22%

Taxation (1,845) (10%) (1,561) (10%) 18%

Loss attributable to non-controlling interests 18 0% 1 0% 1,700%

Profit attributable to HKEX shareholders 11,505 60% 9,391 58% 23%

Capex 1,388 1,068 30%

Basic earnings per share HK$9.11 HK$7.49 22%

Headline ADT on the Stock Exchange HK$129.5 bn HK$87.2 bn 49%

1. % does not add up due to roundings.

Performance by Operating Segment

44

HK$ mn Cash

Equity &

Financial

Derivatives

Commodities Post Trade TechnologyCorporate

Items

Group

2020

Group

2019

Revenue and other income 4,991 3,241 1,454 7,637 910 957 19,190 16,311

% of Group Total 26% 17% 7% 40% 5% 5% 100% 100%

Less: Transaction-related

expenses- (85) - (25) - - (110) (51)

Revenue and other income less

transaction-related expenses4,991 3,156 1,454 7,612 910 957 19,080 16,260

Operating expenses (595) (607) (692) (860) (304) (1,381) (4,439) (3,997)

EBITDA 4,396 2,549 762 6,752 606 (424) 14,641 12,263

% of Group Total 30% 18% 5% 46% 4% (3%) 100% 100%

EBITDA margin(1) 88% 81% 52% 89% 67% N/A 77% 75%

Depreciation and amortisation (133) (114) (340) (322) (38) (250) (1,197) (1,044)

Costs relating to proposed

combination with LSEG- - - - - - - (123)

Finance costs (13) (13) (8) (84) (2) (61) (181) (177)

Share of profits less losses of joint

ventures68 1 - - - - 69 32

Profit before taxation 4,318 2,423 414 6,346 566 (735) 13,332 10,951


Operating Expenses, Depreciation & Amortisation

45

Staff costs from

HC from BayConnect

acquisition & payroll

adj, higher recruitment

costs and special

gratuity payments

due to

maintenance

expenses for new IT

systems and network

upgrades, and

costs from

BayConnect

due to lease

renewal, and new

leases capitalised as

Right-of-use assets

and amortised through

depreciation and

amortisation

Professional fees

incurred for strategic

initiatives and

consulting fee for

HKATS review

due to new &

renewed office

leases, and roll-out

of new IT systems

Stable Total opex due to

staff costs, IT costs,

professional fees and


1. Includes product marketing and promotion expenses

2. Excludes transaction-related expenses, depreciation and amortisation, finance costs, share of profits/(losses) of joint ventures, and costs arising from the proposed combination with LSEG

(HK$ mn)

+9% -6% +27% -3% +15%+10%

468

2,703 2,967

580 635

127 119 119 151- 112

455

3,997

4,439

1,0441,197

Staff costs and

related expenses

IT & computer

maintenance expPremises expenses Professional fees

Other operating

expenses (1) Total opex (2) Depreciation and

amortisation

2019 2020

+11%

2019 20202019 20202019 2020 2019 2020 2019 2020 2019 2020

N/A

HKEX Foundation

charitable donations

2019 2020


as donation income

from Stock Code

Balloting Charity

Scheme and payment

to HK Community

Chest started to

channel through

HKEX Foundation

from 2H 2020

Investment in Talent, Infrastructure and Strategic Initiatives

+8%Excl.

donations

2020 Performance above Historical Trendline

46

2020 record financial results despite COVID-19 outbreak and volatile macroeconomic backdrop.

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 profits/(losses) of joint ventures, and costs arising from the proposed

combination with LSEG. The figures have been restated to conform with latest presentation in the financial statements.

3. Dotted trend lines are illustrative and do not constitute a forward forecast.

(2)

Quarterly performance

(HK$ mn)

1,4321,553 1,543

1,241

1,716 1,777

2,033

1,878

2,562 2,479 2,443

1,828

2,608 2,597

2,207

1,979

2,262

2,9713,347

2,925

2,751 2,879 2,8482,638

3,048

3,155 3,4543,523

4,150 4,044 4,102

3,571

4,288 4,290

3,987

3,746

4,009

4,773

5,3095,099

842 825 825924

823 869 877957 920 971 1,012

1,153

956 970 9371,134 1,008 1,037 1,093

1,301

1,897 2,045 2,014

1,705

2,2152,277

2,567 2,555

3,215 3,061 3,077

2,404

3,3183,307

3,038

2,600

2,984

3,722

4,177

3,758

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Profit attributable to shareholders

Revenue and other income

Operating expenses

EBITDA

(1)

2016 2017 2018 2019 2020

Comparison of Trading Activity Across Global Exchanges

47

Source: WFE and Bloomberg as of Dec 2020.

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.

ADT & Velocity (1) of Major Global Exchanges (US$ billion)

= Last 6 months (July-Dec 20) velocity

= Last month (Dec 20) velocity

= ADT

155% 70% 43% 77% 200% 110% 48% 92% 408% 219% 66% 109% 345% 123% 81% 130% 39%

366% 222% 67%

249.7

112.5

68.3

7.2 6.515.1

8.8 7.4

80.7

57.6

14.827.7 24.3

10.64.8 7.4

0.9

NSELSE

Group

B3NASDAQ ENXNYSE TWSESSECboe TMX Deutsche

Börse

SZSE HKEX(2) KRXJPX ASX SGX

19.20

5.92

10.51

8.81

9.87

1.511.00

0.54 0.41

CME Group ICE (incl.LIFFE)

SHFE DCE ZCE HKEXDerivatives

SGX LME CFFEX

ADV in million

2.42(5 tons equivalent)

No. of contracts

(in million)

% of volume in

commodities0.0%15.2% 62.0% 100.0% 100.0% 100.0% 0.0% 10.4% 100.0%

Global Derivatives Trading Landscape

48

Source: Company website, data as of Jan 2021.

48(5 tons equivalent)

365 114 210 197 197 30 20 11 8

HKEX Investor Presentation

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