Hong Kong Exchanges and Clearing (SEHK:388) - Share price, News & Analysis

388 fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	4/6
Past Performance	3/6
Financial Health	6/6
Dividends	1/6

388 Stock Overview

Rewards

Earnings are forecast to grow 15.22% per year

Risk Analysis

388 passed our risk checks.

Hong Kong Exchanges and Clearing Competitors

CME Group

NasdaqGS:CME

US$70.5b

Intercontinental Exchange

NYSE:ICE

US$55.6b

London Stock Exchange Group

LSE:LSEG

UK£40.8b

Deutsche Börse

XTRA:DB1

€30.2b

Price History & Performance

Summary of all time highs, changes and price drops for Hong Kong Exchanges and Clearing
Historical stock prices
Current Share Price	HK$341.40
52 Week High	HK$544.00
52 Week Low	HK$314.00
Beta	0.96
1 Month Change	-0.12%
3 Month Change	-21.95%
1 Year Change	-24.83%
3 Year Change	36.78%
5 Year Change	75.17%
Change since IPO	3,032.11%

Shareholder Returns

	388	HK Capital Markets	HK Market
7D	4.9%	3.2%	2.8%
1Y	-24.8%	-25.0%	-24.5%

Return vs Industry: 388 matched the Hong Kong Capital Markets industry which returned -25% over the past year.

Return vs Market: 388 matched the Hong Kong Market which returned -24.5% over the past year.

Price Volatility

Is 388's price volatile compared to industry and market?
388 volatility
388 Average Weekly Movement	6.4%
Capital Markets Industry Average Movement	7.7%
Market Average Movement	8.1%
10% most volatile stocks in HK Market	15.1%
10% least volatile stocks in HK Market	3.9%

Stable Share Price: 388 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 388's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	2,146	Alejandro Nicolas Aguzin	https://www.hkex.com.hk

Hong Kong Exchanges and Clearing Limited, together with its subsidiaries, owns and operates stock exchanges and futures exchanges, and related clearing houses in Hong Kong, Mainland China, and the United Kingdom. It operates through five segments: Cash, Equity and Financial Derivatives, Commodities, Post Trade, and Technology. The Cash segment covers various equity products traded on the cash market platforms of the Stock Exchange of Hong Kong Limited, the Shanghai Stock Exchange, and the Shenzhen Stock Exchange; sale of market data relating to the products; and other related activities.

Hong Kong Exchanges and Clearing Fundamentals Summary

How do Hong Kong Exchanges and Clearing's earnings and revenue compare to its market cap?
388 fundamental statistics
Market Cap	HK$430.26b
Earnings (TTM)	HK$11.36b
Revenue (TTM)	HK$19.53b

38.0x

P/E Ratio

22.1x

P/S Ratio

Is 388 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
388 income statement (TTM)
Revenue	HK$19.53b
Cost of Revenue	HK$782.00m
Gross Profit	HK$18.75b
Other Expenses	HK$7.38b
Earnings	HK$11.36b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	8.98
Gross Margin	95.99%
Net Profit Margin	58.19%
Debt/Equity Ratio	0.9%

How did 388 perform over the long term?

See historical performance and comparison

Dividends

2.6%

Current Dividend Yield

99%

Payout Ratio

Valuation

Is Hong Kong Exchanges and Clearing undervalued compared to its fair value and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

38.02x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: 388 (HK$341.4) is trading above our estimate of fair value (HK$259.17)

Significantly Below Fair Value: 388 is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: 388 is poor value based on its PE Ratio (38x) compared to the Hong Kong Capital Markets industry average (8.1x).

PE vs Market: 388 is poor value based on its PE Ratio (38x) compared to the Hong Kong market (8.8x).

Price to Earnings Growth Ratio

PEG Ratio: 388 is poor value based on its PEG Ratio (2.5x)

Price to Book Ratio

PB vs Industry: 388 is overvalued based on its PB Ratio (9.2x) compared to the HK Capital Markets industry average (0.5x).

Future Growth

How is Hong Kong Exchanges and Clearing forecast to perform in the next 1 to 3 years based on estimates from 30 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 388's forecast earnings growth (15.2% per year) is above the savings rate (1.5%).

Earnings vs Market: 388's earnings (15.2% per year) are forecast to grow faster than the Hong Kong market (15% per year).

High Growth Earnings: 388's earnings are forecast to grow, but not significantly.

Revenue vs Market: 388's revenue (13.4% per year) is forecast to grow faster than the Hong Kong market (9.9% per year).

High Growth Revenue: 388's revenue (13.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 388's Return on Equity is forecast to be high in 3 years time (28.1%)

Past Performance

How has Hong Kong Exchanges and Clearing performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 388 has high quality earnings.

Growing Profit Margin: 388's current net profit margins (58.2%) are lower than last year (62.4%).

Past Earnings Growth Analysis

Earnings Trend: 388's earnings have grown by 13% per year over the past 5 years.

Accelerating Growth: 388's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 388 had negative earnings growth (-13.1%) over the past year, making it difficult to compare to the Capital Markets industry average (17.9%).

Return on Equity

High ROE: 388's Return on Equity (24%) is considered high.

Financial Health

How is Hong Kong Exchanges and Clearing's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 388's short term assets (HK$598.7B) exceed its short term liabilities (HK$572.1B).

Long Term Liabilities: 388's short term assets (HK$598.7B) exceed its long term liabilities (HK$3.3B).

Debt to Equity History and Analysis

Debt Level: 388 has more cash than its total debt.

Reducing Debt: 388's debt to equity ratio has reduced from 10% to 0.9% over the past 5 years.

Debt Coverage: 388's debt is well covered by operating cash flow (2889.9%).

Interest Coverage: 388's interest payments on its debt are well covered by EBIT (140.7x coverage).

Balance Sheet

Dividend

What is Hong Kong Exchanges and Clearing current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.60%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 388's dividend (2.6%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.81%).

High Dividend: 388's dividend (2.6%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.77%).

Stability and Growth of Payments

Stable Dividend: 388's dividend payments have been volatile in the past 10 years.

Growing Dividend: 388's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (98.7%), 388's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (99.6%), 388's dividend payments are not well covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Diversified Financials industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure

CEO

Alejandro Nicolas Aguzin (52 yo)

Tenure

HK$75,184,956

Compensation

Mr. Alejandro Nicolas Aguzin serves as Member of Mainland China Advisory Group at Hong Kong Exchanges and Clearing Limited since July 8, 2021. He has been Chief Executive, Executive Director and Ex-Officio...

CEO Compensation Analysis

Compensation vs Market: Alejandro Nicolas's total compensation ($USD9.58M) is above average for companies of similar size in the Hong Kong market ($USD1.06M).

Compensation vs Earnings: Insufficient data to compare Alejandro Nicolas's compensation with company performance.

Leadership Team

Experienced Management: 388's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: 388's board of directors are considered experienced (4.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: 388 insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/18 00:00
End of Day Share Price	2022/05/18 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31