Hong Kong Exchanges and Clearing (388) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of HK$5.4b, up 6% YoY, and second-best nine-month revenue and profit after 2021, driven by robust market activity and favorable investor sentiment.

• Profit attributable to shareholders in Q3 2024 was HK$3.1b, up 7% YoY; YTD Q3 profit stable at HK$9.3b.

• Multiple daily records set in Cash, Derivatives, ETP, and Stock Connect markets; Midea Group's IPO was Asia's largest and the world's second largest YTD.

• Strategic progress included new product launches, Severe Weather Trading, regulatory enhancements, and Asia's largest IPO.

• Diversification efforts delivered results, with strong growth in derivatives, commodities, and data segments.

Financial highlights

• YTD Q3 2024 revenue and other income reached HK$16.0b, up 2% YoY; core business revenue up 1% YoY.

• EBITDA for Q3 2024 was HK$3.9b, up 16% YoY; YTD Q3 EBITDA stable at HK$11.6b; EBITDA margin at 74%.

• Basic EPS for Q3 2024 was HK$2.49, up 17% YoY; YTD Q3 EPS at HK$7.33.

• Operating expenses rose 6% YoY YTD, mainly due to staff and IT costs, partly offset by lower professional fees.

• Net investment income YTD Q3 2024 was HK$3,728m, down from HK$3,887m YoY, mainly due to lower Margin Fund size and increased incentives.

Outlook and guidance

• Cautiously optimistic for Q4 2024 and 2025, with macro uncertainties persisting but potential support from Mainland stimulus and rate cuts.

• Committed to enhancing market vibrancy, resilience, and competitiveness through product expansion, international partnerships, and infrastructure investment.

• Healthy IPO pipeline with 96 active applications as of 30 September 2024; ongoing enhancements to Stock Connect and ETP ecosystem.

• Continued investment in talent, technology, and risk management to support long-term growth.

• White paper on settlement cycle for Hong Kong's Cash Market to be published in 1H 2025.