Hong Kong Exchanges and Clearing

SEHK:388

Snowflake Description

Flawless balance sheet with solid track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.

388

SEHK

HK$348B

Market Cap

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Last updated 2019/04/20 12:35

Company description

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. The last earnings update was 32 days ago. More info.

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388 Share Price and Events

7 Day Returns

0.2%

SEHK:388

0.7%

HK Capital Markets

0.3%

HK Market

1 Year Returns

6.5%

SEHK:388

-9.8%

HK Capital Markets

-4.8%

HK Market

388 Shareholder Return

	7 Day	30 Day	90 Day	1 Year	3 Year	5 Year
Hong Kong Exchanges and Clearing (388)	0.2%	1.9%	15.8%	6.5%	35.9%	99.3%
HK Capital Markets	0.7%	-0.1%	18%	-9.8%	-13.3%	21.9%
HK Market	0.3%	1.6%	11.2%	-4.8%	27%	20.8%

1 Year Return vs Industry and Market

388 outperformed the Capital Markets industry which returned -9.8% over the past year.
388 outperformed the Market in Hong Kong which returned -4.8% over the past year.

Price Volatility

388

Industry

5yr Volatility vs Market

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388 Value

Is Hong Kong Exchanges and Clearing undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

Here we compare the current share price of Hong Kong Exchanges and Clearing to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Hong Kong Exchanges and Clearing.

SEHK:388 Discounted Cash Flow Data Sources
Data Point	Source	Value
Valuation Model		Excess Returns Model
Stable EPS	Weighted future Return on Equity estimates from 12 analysts. = Stable Book Value * Return on Equity = HK$35.05 * 27.4%	HK$9.62
Book Value of Equity per Share	Weighted future Book Value estimates from 9 analysts.	HK$35.05
Discount Rate (Cost of Equity)	See below	7.5%
Perpetual Growth Rate	10-Year HK Government Bond Rate	2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:388
Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year HK Govt Bond Rate	2%
Equity Risk Premium	S&P Global	6.7%
Capital Markets Unlevered Beta	Simply Wall St/ S&P Global	0.73
Re-levered Beta	= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) = 0.733 (1 + (1- 25%) (0.34%))	0.823
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	0.82
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 2% + (0.823 * 6.65%)	7.47%

Discounted Cash Flow Calculation for SEHK:388 using Excess Returns Model Model

The calculations below outline how an intrinsic value for Hong Kong Exchanges and Clearing is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.

In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.

The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.

Note the calculations below are per share.

See our documentation to learn about this calculation.

SEHK:388 Value of Excess Returns
	Calculation	Result
Excess Returns	= (Stable Return on equity – Cost of equity) (Book Value of Equity per share) = (27.4% – 7.47%) * HK$35.05)	HK$7.00
Terminal Value of Excess Returns	= Excess Returns / (Cost of Equity - Expected Growth Rate) = HK$7.00 / (7.47% - 2%)	HK$127.91
Value of Equity	= Book Value per share + Terminal Value of Excess Returns = HK$35.05 + HK$127.91	HK$162.97

SEHK:388 Discount to Share Price
	Calculation	Result
Value per share (HKD)	From above.	HK$162.97
Current discount	Discount to share price of HK$277.20 = -1 x (HK$277.20 - HK$162.97) / HK$162.97	-70.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

The current share price of Hong Kong Exchanges and Clearing is above its future cash flow value.

Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Hong Kong Exchanges and Clearing's earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are Hong Kong Exchanges and Clearing's earnings available for a low price, and how does this compare to other companies in the same industry?

Raw Data

SEHK:388 PE (Price to Earnings) Ratio Data Sources
Data Point	Source	Value
Earnings Per Share *	Company Filings (2018-12-31) in HKD	HK$7.50
SEHK:388 Share Price **	SEHK (2019-04-18) in HKD	HK$277.2
Hong Kong Capital Markets Industry PE Ratio	Median Figure of 43 Publicly-Listed Capital Markets Companies	16.72x
Hong Kong Market PE Ratio	Median Figure of 1,474 Publicly-Listed Companies	12.01x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Hong Kong Exchanges and Clearing.

SEHK:388 PE (Price to Earnings) Ratio Calculation
	Calculation	Outcome
PE Ratio	= SEHK:388 Share Price ÷ EPS (both in HKD) = 277.2 ÷ 7.50	36.97x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong Exchanges and Clearing is overvalued based on earnings compared to the HK Capital Markets industry average.
Hong Kong Exchanges and Clearing is overvalued based on earnings compared to the Hong Kong market.

Price based on expected Growth

Does Hong Kong Exchanges and Clearing's expected growth come at a high price?

Raw Data

SEHK:388 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point	Source	Value
PE Ratio	See PE Ratio Section	36.97x
Net Income Annual Growth Rate	See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 12 Analysts	13.9%per year
Hong Kong Capital Markets Industry PEG Ratio	Median Figure of 7 Publicly-Listed Capital Markets Companies	1.06x
Hong Kong Market PEG Ratio	Median Figure of 463 Publicly-Listed Companies	0.86x

*Line of best fit is calculated by linear regression .

SEHK:388 PEG (Price to Earnings to Growth) Ratio Calculation
	Calculation	Outcome
PEG Ratio	= PE Ratio ÷ Net Income Annual Growth Rate = 36.97x ÷ 13.9%	2.66x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong Exchanges and Clearing is poor value based on expected growth next year.

Price based on value of assets

What value do investors place on Hong Kong Exchanges and Clearing's assets?

Raw Data

SEHK:388 PB (Price to Book) Ratio Data Sources
Data Point	Source	Value
Book Value per Share	Company Filings (2018-12-31) in HKD	HK$32.65
SEHK:388 Share Price *	SEHK (2019-04-18) in HKD	HK$277.2
Hong Kong Capital Markets Industry PB Ratio	Median Figure of 71 Publicly-Listed Capital Markets Companies	0.8x
Hong Kong Market PB Ratio	Median Figure of 2,149 Publicly-Listed Companies	1.03x

SEHK:388 PB (Price to Book) Ratio Calculation
	Calculation	Outcome
PB Ratio	= SEHK:388 Share Price ÷ Book Value per Share (both in HKD) = 277.2 ÷ 32.65	8.49x

* Primary Listing of Hong Kong Exchanges and Clearing.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong Exchanges and Clearing is overvalued based on assets compared to the HK Capital Markets industry average.

Value checks

We assess Hong Kong Exchanges and Clearing's value by looking at:

Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
Is the PE ratio less than the market average, and/ or less than the Capital Markets industry average (and greater than 0)? (2 checks)
Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
Is the PB ratio less than the Capital Markets industry average (and greater than 0)? (1 check)

Full details on the Value part of the Simply Wall St company analysis model.

388 Future Performance

How is Hong Kong Exchanges and Clearing expected to perform in the next 1 to 3 years based on estimates from 12 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!

13.9%

Expected annual growth in earnings.

Earnings growth vs Low Risk Savings

Is Hong Kong Exchanges and Clearing expected to grow at an attractive rate?

Hong Kong Exchanges and Clearing's earnings growth is expected to exceed the low risk savings rate of 2%.

Growth vs Market Checks

Hong Kong Exchanges and Clearing's earnings growth is expected to exceed the Hong Kong market average.
Hong Kong Exchanges and Clearing's revenue growth is positive but not above the Hong Kong market average.

Annual Growth Rates Comparison

Raw Data

SEHK:388 Future Growth Rates Data Sources
Data Point	Source	Value (per year)
SEHK:388 Future Earnings Growth Rate	Line of Best Fit* through Consensus Estimate Earnings of 12 Analysts	13.9%
SEHK:388 Future Revenue Growth Rate	Line of Best Fit* through Consensus Estimate Revenue of 12 Analysts	10.7%
Hong Kong Capital Markets Industry Earnings Growth Rate	Market Cap Weighted Average	16.9%
Hong Kong Capital Markets Industry Revenue Growth Rate	Market Cap Weighted Average	13.8%
Hong Kong Market Earnings Growth Rate	Market Cap Weighted Average	11.7%
Hong Kong Market Revenue Growth Rate	Market Cap Weighted Average	11.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations

Raw Data

SEHK:388 Analysts Growth Expectations Data Sources
Data Point	Source	Value
Past Financials	Company Filings (3 months ago)	See Below
Future Estimates	Average of up to 12 Analyst Estimates (S&P Global)	See Below

All numbers in HKD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:388 Future Estimates Data
Date (Data in HKD Millions)	Revenue	Cash Flow	Net Income *	Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31	21,907	15,034	14,522	6
2020-12-31	19,630	12,523	12,257	12
2019-12-31	17,550	11,839	10,789	12

SEHK:388 Past Financials Data
Date (Data in HKD Millions)	Revenue	Cash Flow	Net Income *
2018-12-31	15,837	9,480	9,312
2018-09-30	15,716		9,362
2018-06-30	15,068	9,254	8,952
2018-03-31	14,179		8,250
2017-12-31	13,077	7,413	7,404
2017-09-30	12,247		6,767
2017-06-30	11,660	5,396	6,277
2017-03-31	11,365		6,053
2016-12-31	11,068	3,463	5,769
2016-09-30	11,185		6,059
2016-06-30	11,625	4,305	6,846
2016-03-31	12,817		7,813

*GAAP earnings excluding extraordinary items.

High Growth Checks

Hong Kong Exchanges and Clearing's earnings are expected to grow by 13.9% yearly, however this is not considered high growth (20% yearly).
Hong Kong Exchanges and Clearing's revenue is expected to grow by 10.7% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Raw Data

SEHK:388 Past and Future Earnings per Share
Data Point	Source	Value
Past Financials	Company Filings (3 months ago)	See Below
Future Estimates	Average of up to 12 Analyst Estimates (S&P Global)	See Below

All data from Hong Kong Exchanges and Clearing Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:388 Future Estimates Data
Date (Data in HKD Millions)	EPS *	EPS High Estimate	EPS Low Estimate	Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31	10.95	15.38	8.62	5.00
2020-12-31	9.63	13.99	8.17	11.00
2019-12-31	8.40	10.27	7.35	11.00

SEHK:388 Past Financials Data
Date (Data in HKD Millions)	EPS *
2018-12-31	7.50
2018-09-30	7.55
2018-06-30	7.25
2018-03-31	6.69
2017-12-31	6.03
2017-09-30	5.53
2017-06-30	5.14
2017-03-31	4.98
2016-12-31	4.76
2016-09-30	5.01
2016-06-30	5.69
2016-03-31	6.53

*GAAP earnings excluding extraordinary items.

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.

Hong Kong Exchanges and Clearing is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).

Show me more growth companies in the Capital Markets industry

Future performance checks

We assess Hong Kong Exchanges and Clearing's future performance by looking at:

Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Hong Kong market? (1 check)
Is the annual earnings growth rate expected to be above 20%? (1 check)
Is the annual revenue growth rate expected to be above 20%? (1 check)
Is the Return on Equity in 3 years expected to be over 20%? (1 check)

Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Hong Kong Exchanges and Clearing has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

388 Past Performance

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

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare Hong Kong Exchanges and Clearing's growth in the last year to its industry (Capital Markets).

Past Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.

Hong Kong Exchanges and Clearing's year on year earnings growth rate has been positive over the past 5 years.
Hong Kong Exchanges and Clearing's 1-year earnings growth exceeds its 5-year average (25.8% vs 12.1%)
Hong Kong Exchanges and Clearing's earnings growth has exceeded the HK Capital Markets industry average in the past year (25.8% vs -16.9%).

Earnings and Revenue History

Hong Kong Exchanges and Clearing's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Raw Data

All data from Hong Kong Exchanges and Clearing Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:388 Past Revenue, Cash Flow and Net Income Data
Date (Data in HKD Millions)	Revenue	Net Income *	G+A Expenses
2018-12-31	15,837.00	9,312.00	3,161.00
2018-09-30	15,716.00	9,362.00	3,073.00
2018-06-30	15,068.00	8,952.00	2,937.00
2018-03-31	14,179.00	8,250.00	2,874.00
2017-12-31	13,077.00	7,404.00	2,776.00
2017-09-30	12,247.00	6,767.00	2,656.00
2017-06-30	11,660.00	6,277.00	2,593.00
2017-03-31	11,365.00	6,053.00	2,523.00
2016-12-31	11,068.00	5,769.00	2,528.00
2016-09-30	11,185.00	6,059.00	2,430.00
2016-06-30	11,625.00	6,846.00	2,471.00
2016-03-31	12,817.00	7,813.00	2,504.00
2015-12-31	12,862.00	7,956.00	2,454.00
2015-09-30	12,891.00	7,936.00	2,410.00
2015-06-30	12,064.00	6,893.00	2,373.00
2015-03-31	10,289.00	5,562.00	2,241.00
2014-12-31	9,828.00	5,165.00	2,195.00
2014-09-30	9,213.00	4,678.00	2,120.00
2014-06-30	8,876.00	4,591.00	2,038.00
2014-03-31	8,818.00	4,572.00	2,005.00
2013-12-31	8,704.00	4,552.00	1,957.00
2013-09-30	8,320.00	4,392.00	1,844.00
2013-06-30	7,873.00	4,196.00	1,725.00
2013-03-31	7,545.00	4,094.00	1,626.00
2012-12-31	7,198.00	4,084.00	1,505.00
2012-09-30	7,282.00	4,492.00	1,423.00
2012-06-30	7,540.00	4,725.00	1,397.00

*GAAP earnings excluding extraordinary items.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.

Hong Kong Exchanges and Clearing has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
Hong Kong Exchanges and Clearing used its assets more efficiently than the HK Capital Markets industry average last year based on Return on Assets.
Hong Kong Exchanges and Clearing's use of capital has not improved over the past 3 years (Return on Capital Employed).

Show me more strong past performing companies in the Capital Markets industry

Past performance checks

We assess Hong Kong Exchanges and Clearing's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the Capital Markets industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Hong Kong Exchanges and Clearing has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

388 Health

How is Hong Kong Exchanges and Clearing's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Hong Kong Exchanges and Clearing's finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

Hong Kong Exchanges and Clearing is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Hong Kong Exchanges and Clearing's cash and other short term assets cover its long term commitments.

Balance sheet

This treemap shows a more detailed breakdown of Hong Kong Exchanges and Clearing's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.

Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.

Low level of unsold assets.
Debt is covered by short term assets, assets are 202.2x debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.

Raw Data

All data from Hong Kong Exchanges and Clearing Company Filings, last reported 3 months ago.

SEHK:388 Past Debt and Equity Data
Date (Data in HKD Millions)	Total Equity	Total Debt	Cash & Short Term Investments
2018-12-31	40,903.00	1,166.00	24,435.00
2018-09-30	39,484.00	1,870.00	223,097.00
2018-06-30	40,734.00	1,872.00	25,787.00
2018-03-31	39,996.00	1,869.00	264,384.00
2017-12-31	37,375.00	1,860.00	21,404.00
2017-09-30	35,643.00	1,856.00	249,044.00
2017-06-30	34,988.00	3,450.00	20,415.00
2017-03-31	34,177.00	3,433.00	213,778.00
2016-12-31	32,384.00	3,422.00	17,582.00
2016-09-30	31,284.00	3,420.00	188,530.00
2016-06-30	31,120.00	3,418.00	16,918.00
2016-03-31	31,456.00	3,415.00	194,607.00
2015-12-31	29,962.00	3,409.00	15,573.00
2015-09-30	28,604.00	3,406.00	252,687.00
2015-06-30	28,031.00	3,329.00	13,780.00
2015-03-31	22,973.00	7,056.00	229,849.00
2014-12-31	21,359.00	7,026.00	10,193.00
2014-09-30	20,734.00	8,365.00	210,369.00
2014-06-30	22,278.00	6,976.00	10,086.00
2014-03-31	21,853.00	6,961.00	53,855.00
2013-12-31	20,518.00	6,921.00	9,941.00
2013-09-30	19,019.00	6,692.00	9,181.00
2013-06-30	17,834.00	6,665.00	8,698.00
2013-03-31	17,809.00	6,653.00	9,239.00
2012-12-31	17,764.00	6,615.00	7,563.00
2012-09-30	8,693.00	0.00	9,000.00
2012-06-30	9,282.00	0.00	9,420.00

Hong Kong Exchanges and Clearing's level of debt (2.9%) compared to net worth is satisfactory (less than 40%).
The level of debt compared to net worth has been reduced over the past 5 years (33.7% vs 2.9% today).
Debt is well covered by operating cash flow (813%, greater than 20% of total debt).
Interest payments on debt are well covered by earnings (EBIT is 158.9x coverage).

Show me more healthy companies in the Capital Markets industry

Financial health checks

We assess Hong Kong Exchanges and Clearing's financial health by checking for:

Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by operating cash flow? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)

For companies that are loss making and have been so on average in the past we replace the last 2 checks with:

Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)

Full details on the Health part of the Simply Wall St company analysis model.

388 Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.

Annual Dividend Income

2.42%

Current annual income from Hong Kong Exchanges and Clearing dividends. Estimated to be 3.03% next year.

If you bought HK$2,000 of Hong Kong Exchanges and Clearing shares you are expected to receive HK$48 in your first year as a dividend.

Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?

Hong Kong Exchanges and Clearing's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (1.94%).
Hong Kong Exchanges and Clearing's dividend is below the markets top 25% of dividend payers in Hong Kong (5.34%).

Annualized Historical and Future Dividends

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.

Raw Data

SEHK:388 Annualized Past and Future Dividends
Data Point	Source	Value
Past Annualized Dividend Yield	S&P Global Market Data	See Below
Past Dividends per Share	Company Filings/ Annualized Dividend Payments	See Below
Future Dividends per Share Estimates	Average of up to 12 Analyst Estimates (S&P Global)	See Below
Hong Kong Capital Markets Industry Average Dividend Yield	Market Cap Weighted Average of 32 Stocks	2.5%
Hong Kong Market Average Dividend Yield	Market Cap Weighted Average of 965 Stocks	3.4%
Hong Kong Minimum Threshold Dividend Yield	10th Percentile	1.1%
Hong Kong Bottom 25% Dividend Yield	25th Percentile	1.9%
Hong Kong Top 25% Dividend Yield	75th Percentile	5.3%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:388 Future Dividends Estimate Data
Date (Data in HK$)	Dividend per Share (annual)	Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31	9.66	8.00
2020-12-31	8.56	14.00
2019-12-31	7.54	14.00

SEHK:388 Past Annualized Dividends Data
Date (Data in HK$)	Dividend per share (annual)	Avg. Yield (%)
2019-03-19	6.710	2.435
2019-02-27	6.710	2.444
2019-02-25	7.280	2.690
2018-11-07	7.280	3.094
2018-08-20	7.280	3.362
2018-08-08	7.280	3.234
2018-04-25	5.400	2.202
2017-08-09	4.590	1.896
2017-03-20	4.080	2.023
2017-02-27	4.080	2.110
2016-03-21	5.950	3.091
2016-03-02	5.950	3.410
2015-11-11	6.160	3.316
2015-08-24	6.160	3.211
2015-08-12	6.160	3.095
2015-04-15	3.980	1.528
2015-03-23	3.980	1.899
2015-03-05	3.980	2.258
2014-08-25	3.550	2.024
2014-04-29	3.540	2.313
2013-09-04	3.280	2.586
2013-02-27	2.920	2.307
2012-11-19	3.700	2.696
2012-11-07	3.700	2.950
2012-08-20	3.700	3.207
2012-08-08	3.700	3.433
2012-03-12	4.250	3.689
2012-02-29	4.250	3.049
2011-03-02	4.200	2.916
2010-03-04	3.930	2.711
2009-12-31	3.930	2.887
2009-08-12	3.640	2.585
2009-04-21	4.290	3.635

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
Dividends per share have increased over the past 10 years.

Current Payout to shareholders

What portion of Hong Kong Exchanges and Clearing's earnings are paid to the shareholders as a dividend.

Dividends paid are covered by earnings (1.1x coverage).

Future Payout to shareholders

Dividends after 3 years are not well covered by earnings (1.1x coverage).

Income/ dividend checks

We assess Hong Kong Exchanges and Clearing's dividend by checking for:

Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
Is current dividend yield above the bottom 25% of dividend payers? (1 check)
Is current dividend yield above the top 25% of dividend payers? (1 check)
Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
If they have paid a dividend for 10 years has it increased in this time? (1 check)
How sustainable is the dividend, can Hong Kong Exchanges and Clearing afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)

Full details on the Dividends part of the Simply Wall St company analysis model.

388 Management

What is the CEO of Hong Kong Exchanges and Clearing's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Charles Li

COMPENSATION	HK$52,413,000
AGE	57
TENURE AS CEO	9.3 years

CEO Bio

Mr. Xiaojia Li, also known as Charles, has been the Chief Executive Officer and Executive Director of Hong Kong Exchanges & Clearing Limited since January 16, 2010. Before joining JP Morgan in 2003, Mr. Li served as President at Merrill Lynch China from 1999 to 2003 and its Managing Director, where he had worked for more than 8 years. He served at Merrill Lynch from 1994 to 2003. He was an Associate at Davis Polk & Wardwell, New York from 1991 to 1993 and Brown & Wood, New York from 1993 to 1994. Mr. Li served as the Chairman of JP Morgan China from 2003 to 2009 and was responsible for all of JP Morgan's businesses in China. Mr. Li serves as an Executive Director of Hong Kong Exchanges & Clearing Ltd. He serves as a Director of LME Holdings Limited. He has been a Director of The London Metal Exchange Limited since December 6, 2012. He holds a Bachelor of Arts degree in English Literature from Xiamen University in China, a Master of Arts degree in Journalism from the University of Alabama and a Juris Doctor from Columbia University in the US.

CEO Compensation

Charles's compensation has been consistent with company performance over the past year.
Charles's remuneration is higher than average for companies of similar size in Hong Kong.

Management Team Tenure

Average tenure and age of the Hong Kong Exchanges and Clearing management team in years:

2.4

Average Tenure

Average Age

The tenure for the Hong Kong Exchanges and Clearing management team is about average.

Average tenure and age of the Hong Kong Exchanges and Clearing board of directors in years:

4.2

Average Tenure

Average Age

The tenure for the Hong Kong Exchanges and Clearing board of directors is about average.

4.4 yrs

Who owns this company?

Recent Insider Trading

No 3 month insider trading information.

Recent Insider Transactions

Announced	Type	Name	Entity	Start	End	Shares	Max Price (HK$)	Value (HK$)
19. Mar 19	Sell	J.P. Morgan Asset Management, Inc.	Company	14. Mar 19	14. Mar 19	-16,922,005	HK$273.39	HK$-4,626,295,069
11. Mar 19	Buy	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	06. Mar 19	06. Mar 19	3,565,227	HK$278.09	HK$991,445,423
13. Nov 18	Buy	J.P. Morgan Asset Management, Inc.	Company	08. Nov 18	08. Nov 18	405,644	HK$227.69	HK$92,362,504
09. Nov 18	Sell	J.P. Morgan Asset Management, Inc.	Company	06. Nov 18	06. Nov 18	-1,268,007	HK$221.06	HK$-280,300,301
07. Nov 18	Buy	J.P. Morgan Asset Management, Inc.	Company	02. Nov 18	02. Nov 18	1,817,781	HK$225.78	HK$410,410,049
08. May 18	Sell	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	03. May 18	03. May 18	-15,734,948	HK$256.29	HK$-4,032,694,133

Management checks

We assess Hong Kong Exchanges and Clearing's management by checking for:

Is the CEO's compensation unreasonable compared to market cap? (1 check)
Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
Is the average tenure of the management team less than 2 years? (1 check)
Is the average tenure of the board of directors team less than 3 years? (1 check)

Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

388 News

Simply Wall St News

With EPS Growth And More, Hong Kong Exchanges and Clearing (HKG:388) Is Interesting

How Fast Is Hong Kong Exchanges and Clearing Growing Its Earnings Per Share. … Not all of Hong Kong Exchanges and Clearing's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. … Hong Kong Exchanges and Clearing shareholders can take confidence from the fact that EBIT margins are up from 66% to 69%, and revenue is growing.

Simply Wall St - 1 day ago – Full article

Did Hong Kong Exchanges and Clearing Limited's (HKG:388) Recent Earnings Growth Beat The Trend?

Examining how Hong Kong Exchanges and Clearing Limited (HKG:388) is performing as a company requires looking at more than just a years' earnings. … Below, I will run you through a simple sense check to build perspective on how Hong Kong Exchanges and Clearing is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its capital markets industry peers. … View our latest analysis for Hong Kong Exchanges and Clearing?

Simply Wall St - 1 week ago – Full article

Could The Hong Kong Exchanges and Clearing Limited (HKG:388) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Hong Kong Exchanges and Clearing Limited (HKG:388), then you'll have to look at the makeup of its share registry. … Hong Kong Exchanges and Clearing has a market capitalization of HK$341b, so it's too big to fly under the radar. … See our latest analysis for Hong Kong Exchanges and Clearing

Simply Wall St - 2 weeks ago – Full article

Is It Too Late To Buy Hong Kong Exchanges and Clearing Limited (HKG:388) At Its March Price?

Hong Kong Exchanges and Clearing Limited (HKG:388) is considered a high growth stock. … View our latest analysis for Hong Kong Exchanges and Clearing? … Investors in Hong Kong Exchanges and Clearing have been patiently waiting for the uptick in earnings.

Simply Wall St - 3 weeks ago – Full article

What Should Investors Know About Hong Kong Exchanges and Clearing Limited's (HKG:388) Growth?

As Hong Kong Exchanges and Clearing Limited (HKG:388) released its earnings announcement on 31 December 2018, … the consensus outlook from analysts appear fairly confident, … with earnings expected to grow by 14% in the upcoming year

Simply Wall St - 1 month ago – Full article

What Should Investors Know About Hong Kong Exchanges and Clearing Limited's (HKG:388) Growth?

Hong Kong Exchanges and Clearing Limited's (HKG:388) announced its latest earnings update in December 2018, whicha

Simply Wall St - 1 month ago – Full article

Is There Now An Opportunity In Hong Kong Exchanges and Clearing Limited (HKG:388)?

Let's talk about the popular Hong Kong Exchanges and Clearing Limited (HKG:388). … saw a decent share price growth in the teens level on the SEHK over the last few months. … With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price

Simply Wall St - 2 months ago – Full article

Our Take On Hong Kong Exchanges and Clearing Limited's (HKG:388) CEO Salary

In 2010 Charles Li was appointed CEO of Hong Kong Exchanges and Clearing Limited (HKG:388). … First, this article will compare CEO compensation with compensation at other large companies. … View our latest analysis for Hong Kong Exchanges and Clearing?

Simply Wall St - 2 months ago – Full article

What To Know Before Buying Hong Kong Exchanges and Clearing Limited (HKG:388) For Its Dividend

Historically, Hong Kong Exchanges and Clearing Limited (HKG:388) has paid a dividend to shareholders. … Let's take a look at Hong Kong Exchanges and Clearing in more detail. … View our latest analysis for Hong Kong Exchanges and Clearing

Simply Wall St - 3 months ago – Full article

Why Investors Should Run Towards Hong Kong Exchanges and Clearing Limited (HKG:388)

High quality companies, such as Hong Kong Exchanges and Clearing Limited, are impacted by general market panic and sell-off, but the fundamentals of these companies stay the same. … Check out our latest analysis for Hong Kong Exchanges and Clearing. … Hong Kong Exchanges and Clearing Limited, through its subsidiaries, owns and operates stock exchanges and futures exchanges, and related clearing houses in Hong Kong.

Simply Wall St - 4 months ago – Full article

388 Company Info

Description

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. It operates in five segments: Cash, Equity and Financial Derivatives, Commodities, Clearing, and Platform and Infrastructure. The Cash segment covers various equity products traded on the cash market platforms, the Shanghai Stock Exchange, and the Shenzhen Stock Exchange; sale of market data relating to the products; and other related activities. The Equity and Financial Derivatives segment provides and maintains trading platforms for a range of equity and financial derivative products, such as stock and equity index futures and options, derivative warrants, and callable bull/bear contracts and warrants, as well as sells related market data. The Commodities segment operates an exchange for the trading of base metals futures and options contracts in the United Kingdom; and operates Qianhai Mercantile Exchange Co., Ltd., a commodity trading platform in the Mainland. This segment also comprises the Asia Commodities contracts, and gold and iron ore futures contracts traded on Hong Kong Futures Exchange Limited. The Clearing segment operates clearing houses that are responsible for clearing and settlement of over-the-counter derivatives contracts. The Platform and Infrastructure segment offers various services that provide users with access to the platform and infrastructure. The company serves issuers and investors. Hong Kong Exchanges and Clearing Limited is based in Central, Hong Kong.

Details

Name:	Hong Kong Exchanges and Clearing Limited
Ticker:	388
Exchange:	SEHK
Founded:
Market Cap:	HK$347,884,194,042
Shares outstanding:	1,254,993,485
Website:	http://www.hkex.com.hk
Address:	Hong Kong Exchanges and Clearing Limited Two Exchange Square, 8th Floor, Central, Hong Kong

Listings

Exchange Symbol	Ticker Symbol	Security	Exchange	Country	Currency	Listed on
SEHK	388	Ordinary Shares	The Stock Exchange of Hong Kong Ltd.	HK	HKD	28. Jun 2000
OTCPK	HKXC.F	Ordinary Shares	Pink Sheets LLC	US	USD	28. Jun 2000
DB	HK2C	Ordinary Shares	Deutsche Boerse AG	DE	EUR	28. Jun 2000
SHSC	388	Ordinary Shares	Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect	HK	HKD	28. Jun 2000
SZSC	388	Ordinary Shares	The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect	HK	HKD	28. Jun 2000
OTCPK	HKXC.Y	UNSPONSORED ADR	Pink Sheets LLC	US	USD	23. Oct 2008

Number of employees

Current staff

1,854

Hong Kong Exchanges and Clearing employees.

Industry

Industry:	Financial Exchanges and Data
Sector:	Diversified Financials

Company Analysis and Financial Data Status

Area	Date (UTC time)
Company Analysis updated:	2019/04/20 12:35
End of day share price update:	2019/04/18 00:00
Last estimates confirmation:	2019/04/17
Last earnings filing:	2019/03/19
Last earnings reported:	2018/12/31
Last annual earnings reported:	2018/12/31

All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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