Hong Kong Exchanges and Clearing (388) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered record revenue, profit, and trading volumes, driven by renewed global interest in China, AI innovation, and increased Mainland investor participation in offshore markets.

• Achieved record quarterly revenue and profit in Q1 2025, with profit attributable to shareholders at HK$4.1b, up 37% year-over-year and 8% sequentially.

• Strategic initiatives focused on China strengths, international connectivity, innovation, and sustainability, including enhancements to Stock Connect, new product launches, and technology upgrades.

• Market stability was maintained despite volatility, with robust daily turnover and a strong IPO pipeline, as Hong Kong ranked among the world's top five IPO venues with 17 new listings and 120 active IPO applications.

• Permanent headquarters established at Exchange Square, supporting long-term cost savings and stakeholder engagement.

Financial highlights

• Revenue and other income reached HK$6.9b, up 32% year-over-year and 7% sequentially; core business revenue rose 36% year-over-year.

• EBITDA was HK$5.3b, up 42% year-over-year, with margin improving to 78% from 72% a year ago.

• Profit attributable to shareholders was HK$4.1b, up 37% year-over-year and 8% sequentially; basic EPS was HK$3.23, up 37%.

• Operating profit increased 46% year-over-year to HK$4.9b; headline ADT on the Stock Exchange hit HK$242.7b, up 144% year-over-year.

• Capital expenditure rose 73% year-over-year to HK$481m, mainly for system upgrades and LME platform development.

Outlook and guidance

• Management aims to leverage China connectivity, expand global market links, and enhance product offerings to remain resilient against macro volatility and capture future opportunities.

• Equity capital raising in Hong Kong revived, with US$20b+ in deal value year-to-date, ranking second globally.

• IPO pipeline remains robust with 120 active applicants as of March 31, 2025.

• LME volumes at the second highest quarterly level in 11 years; further growth expected from new trading platform and warehouse expansion.

• Plans to implement streamlined settlement fees, minimum spread reduction, and post-trade service enhancements in coming months.