Nicolas Aguzin, Chief Executive Officer said:

“Throughout 2022, HKEX demonstrated focus and resilience, launching a range of important strategic initiatives and introducing a range of new products and market enhancements. These included the most significant developments to our mutual-market access Connect franchise since it was first established, the launch of Core Climate – Hong Kong’s first carbon trading platform, and the introduction of a host of new Derivatives and ETF products. And despite the challenging global economic and geopolitical backdrop, HKEX remained one of the world’s premier capital raising venues, with positive sentiment returning to the IPO market in the second half, culminating in a total of 90 new companies from a range of sectors and geographies successfully joining our markets in 2022. HKEX Derivatives Market also had another record year, with Hong Kong fast becoming the region’s key risk management centre. The year finished very strongly for HKEX, with the Group reporting record fourth quarter financials, offsetting in part the softer volumes and numbers in the first half. Whilst the road ahead will not be without challenges, we are excited about the year ahead and we look forward to continuing to execute on our vision to build the Marketplace of the Future.”

2022 was a year of good strategic progress for #HKEX. Watch CEO, Nicolas Aguzin @aguzin and CFO, Vanessa Lau discuss our financial results, our strategic focus, the outlook for the year ahead and why we are firmly focused on building the #MarketplaceOfTheFuture. pic.twitter.com/LQfxU7Qwfv

— HKEX 香港交易所 (@HKEXGroup) February 23, 2023

Financial Highlights

2022 revenue and other income of $18,456 million was 12 per cent lower than the record 2021

– Core business revenue was down 9 per cent against 2021, reflecting reduced trading and clearing fees from lower Headline ADT and Stock Connect Northbound ADT, and lower depository fees and listing fees. This was partly offset by the increase in net investment income from Margin Funds and higher trading fees from the Derivatives Market

– Net investment loss on Corporate Funds was $48 million (2021: income of $708 million), as the External Portfolio had net fair value losses of $486 million in 2022 (2021: gains of $364 million), partly offset by higher investment income from internally-managed Corporate Funds

 Operating expenses were 12 per cent higher than 2021, attributable to higher staff costs and professional fees

 EBITDA1 was 19 per cent lower than 2021 at $13,185 million, with EBITDA margin at 72 per cent, 6 per cent lower than 2021

 Profit attributable to shareholders was $10,078 million, 20 per cent lower than the record 2021

CHAIRMAN’S STATEMENT

2022 was a good year of strategic progress for HKEX, despite ongoing macro challenges and uncertainties. We have delivered a resilient full-year performance, reflecting the continued robustness and strength of our organisation and our markets. A significant number of important strategic initiatives were accomplished or announced during the year, which have positioned us well to continue to lead and shape the development of the region’s global capital markets, supporting our vision to build the Marketplace of the Future.

HKEX today reported #record Q4 results and a robust set of FY 2022 financial results, in a year of significant strategic delivery. Our business and markets continued to demonstrate their #resiliency, despite the challenging macro backdrop. Read more at https://t.co/gGHAZGyXuq pic.twitter.com/z7HfFQe7cr

— HKEX 香港交易所 (@HKEXGroup) February 23, 2023

Our Performance

The volatile macro environment during 2022 continued to impact trading and volumes across global markets, and Hong Kong was no exception. However, market sentiment began to improve in the fourth quarter, resulting in a strong end to the year for HKEX. Throughout the year we were also pleased to see strong performance in the Hong Kong Derivatives Market, with new trading records set across our USD/CNH Futures and a number of other individual derivatives products. Trading through Stock Connect remained resilient, and Northbound Bond Connect trading continued to record new highs in trading volume and number of investors. Driven by the renewed momentum in our IPO market in the second half of the year, Hong Kong remained as one of the world’s most active IPO fundraising hubs, raising a total of $104.6 billion in 2022.

The chargeable average daily volume of metals contracts traded on the LME decreased by 7 per cent from 2021, amid challenging market conditions.

Total revenue and other income of the Group, for the year ended 31 December 2022, amounted to $18,456 million and the profit attributable to shareholders was $10,078 million, down 12 per cent and 20 per cent respectively, from the record highs in 2021.

Dividend

The Board declared payment of a second interim dividend of $3.69 per share, wholly in cash, which, together with the first interim dividend of $3.45 per share paid in September 2022, results in a full-year dividend of $7.14 per share.

Strategic Update

Of particular note was the inclusion of ETFs in Stock Connect, the announcement of the launch of Swap Connect and the proposed inclusion of Hong Kong primary-listed international companies in the Southbound Stock Connect, each marking a new milestone in the further development and connectivity between Hong Kong and Mainland China’s capital markets. The launch of Core Climate, Hong Kong’s new international carbon marketplace, was another highlight and supports both our commitment to the regional and global growth of a vibrant carbon ecosystem and a healthy sustainable future for us all. In December 2022, we announced that the HKD-RMB Dual Counter Model will be introduced in the first half of 2023, supporting the continued internationalisation of the RMB and further elevating Hong Kong’s role as the world’s premier offshore RMB hub; we also launched a new Hong Kong SPAC listing framework in January 2022 as well as a market consultation on new listing rules for specialist technology companies in October 2022, which all continue to enhance Hong Kong’s reputation as the global listing venue of choice.

Through these initiatives, and other initiatives, we continue to strengthen the global competitiveness and relevance of our markets, reinforcing our leadership role at the heart of the global financial communityIn 2022, we made notable progress in strengthening our mutual market connectivity, diversifying our product offerings and enhancing the attractiveness, liquidity and vibrancy of our markets, further deepening our value proposition as a gateway connecting China and the world.

Market Quality and Sustainability

As a leading global exchange group, we are mindful of our responsibilities and the vital role we play in enhancing both the quality of our markets and advancing sustainability across the region and globally. Through the Hong Kong International Carbon Market Council, established in July 2022, we are collaborating with leading corporates and financial institutions to further enhance Core Climate, facilitating Hong Kong’s growth as a premier carbon hub in Asia and beyond, contributing to global efforts towards a low-carbon economy. We are also working closely with the Guangzhou Futures Exchange and the China Emissions Exchange, among others, to explore opportunities in carbon finance in the Greater Bay Area. During 2022, we continued to promote transparency and disclosure of sustainable-themed products through STAGE, our multi-asset sustainable finance platform which now displays more than 110 sustainable-focused products from leading issuers. Our centralised ESG resources platform, ESG Academy, continues to drive market education and provide insights on ESG reporting and best practices to support and guide listed issuers and the broader business community in their sustainability journeys.

Throughout the year, the LME continued its leadership role in driving supply chain sustainability across the global metals industry, in particular, through a number of enhancements of its fast expanding digital credential register, LMEpassport, providing greater comparability and transparency in carbon emissions data. In addition, we were pleased to see that 96 per cent of the LME-listed brands met the first reporting deadline on 30 June 2022 to comply with the LME’s responsible sourcing policy underpinned by guidelines set by OECD.

Among our ongoing efforts to promote high standard of governance and disclosure practices among listed issuers in Hong Kong, we amended the Listing Rules to become the first exchange in the world to end single-gender boards for new IPO applicants in 2022, with all listed issuers mandated to follow suit by the end of 2024. We also enhanced share schemes regulation for listed issuers in January 2023 to provide informative disclosure and uphold robust shareholder protection. We are now seeking market feedback on our proposals to expand the paperless listing regime in support of our commitment to sustainability and further enhance our operational efficiency, without compromising investor protection.

Specific details of the Group’s performance, achievements and market initiatives in 2022 are set out in the Chief Executive Officer’s Review and Business Review sections of this announcement.

.@HKExGroup CEO Nicolas @Aguzin: China's $2.5tn in savings could bring growth opportunities and active economic performance for the exchange.
Seeing encouraging momentum in the IPO market, 2023 should be a much more constructive year. First On @CNBCi pic.twitter.com/kj383E0M0A

— Emily Chan Tan (@EmilyCNBC) February 23, 2023

Outlook

Looking ahead, the macro economic environment looks set to remain challenging and uncertain. Concerns over a global economic slowdown, persistent inflation and ongoing geopolitical tensions will continue to be the key factors shaping the performance of capital markets, while sustainability will remain a broader shared agenda across countries and sectors.

As a purpose-driven organisation and a leading global exchange group, we are fully committed to promoting the long-term sustainability of financial markets and the prosperity of our stakeholders. Our steadfast focus on driving connectivity, innovation and sustainability across our markets and client centricity across our business ensures that we are well placed to meet challenges and capture future growth opportunities.

I would like to take this opportunity to express my gratitude to my fellow Board members for their support and contribution throughout 2022. On behalf of the Board, I would like to extend sincere appreciation to Mr Rafael Gil-Tienda and Mr Stephen Yiu, who will retire from the Board after the conclusion of the 2023 AGM. I would also like to thank members of the International Advisory Council and the Mainland China Advisory Group for their invaluable insights and guidance during the year.

Finally, I would like to thank our shareholders and other valued stakeholders for their ongoing trust and support. I would also like to express heartfelt appreciation to all our employees for their resolute commitment and hard work in pursuing excellence, helping us to progress our strategic priorities and supporting the long-term health of our communities.

Laura M CHA Chairman

Source: HKEX