In This Article:
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hong Kong Exchanges and Clearing Ltd (HKXCF) delivered record financial results in 2024, with revenue and other income up 9% from the previous year.
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Profit attributable to shareholders increased by 10% year-on-year, with a remarkable 46% increase in the fourth quarter.
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The diversification strategy is paying off, with double-digit growth in cash, commodities, and ETP markets, and record average daily volumes in the derivatives market.
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The Connect program saw record highs in northbound and southbound trading volumes, reflecting strong investor interest.
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HKXCF continues to attract innovative companies, with new economy companies accounting for over 80% of capital raised in IPOs in 2024.
Negative Points
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Investment income from margin funds decreased, partly offsetting revenue gains.
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Operating expenses increased by 6%, driven by higher staff and IT costs.
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Net investment income of margin funds fell by 13%, due to increased rebates and lower returns from Japanese yen collateral.
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The company faces ongoing macroeconomic uncertainties and geopolitical developments that could impact market sentiment.
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The introduction of new tax rules under BEPS 2.0 could have a meaningful impact on financials, with a minimum 15% tax rate likely to be applied retrospectively.
Q & A Highlights
Q: Can you provide more details on the IPO pipeline, particularly regarding the secondary listing of Asian companies, and any potential impacts from regulatory scrutiny on IPO proceeds? A: (Bonnie Yi Chen, CEO) The trend of Asian companies pursuing dual listings in Hong Kong began last year, with successful IPOs like Medea. Many companies are motivated by their international ambitions, despite potential share price discounts. Currently, about 30 companies have filed or announced plans for H-share listings. Regarding regulatory scrutiny, while there are capital controls in China, the country encourages a "plus one" strategy for offshore investments, which should support ongoing IPO momentum.
Q: Could you elaborate on the potential changes to listing requirements and post-listing obligations mentioned in the recent government budget speech? A: (Bonnie Yi Chen, CEO) We continuously review our listing regime to ensure it remains competitive and fit for purpose. Since 2018, we've introduced user-friendly frameworks for new economy companies and improved vetting processes. We aim to stay competitive as other global exchanges also review their frameworks. (Catherine N, Head of Listing) We are working closely with the SSC on more initiatives and expect further consultations this year.