SEHK:388

Stock Analysis Report

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Hong Kong Exchanges and Clearing

Executive Summary

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. More Details

Rewards

Earnings are forecast to grow 12.87% per year

Earnings grew by 14.3% over the past year

Risk Analysis

No risks detected for 388 from our risk checks.


Snowflake Analysis

Flawless balance sheet with outstanding track record.


Similar Companies

Share Price & News

How has Hong Kong Exchanges and Clearing's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 388 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 388's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

0.5%

388

3.4%

HK Capital Markets

0.4%

HK Market


1 Year Return

57.7%

388

42.5%

HK Capital Markets

11.0%

HK Market

Return vs Industry: 388 exceeded the Hong Kong Capital Markets industry which returned 42.5% over the past year.

Return vs Market: 388 exceeded the Hong Kong Market which returned 11% over the past year.


Shareholder returns

388IndustryMarket
7 Day0.5%3.4%0.4%
30 Day1.8%6.6%7.0%
90 Day1.1%-0.1%6.4%
1 Year61.1%57.7%45.7%42.5%15.5%11.0%
3 Year85.8%72.2%2.2%-5.4%4.1%-6.8%
5 Year119.5%93.8%4.8%-8.4%34.9%12.3%

Long-Term Price Volatility Vs. Market

How volatile is Hong Kong Exchanges and Clearing's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

45.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 388 (HK$384.8) is trading above our estimate of fair value (HK$161.07)

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 (46x) compared to the HK Capital Markets industry average (12.2x).

PE vs Market: 388 is poor value based on its PE Ratio (46x) compared to the Hong Kong market (11.1x).


Price to Earnings Growth Ratio

PEG Ratio: 388 is poor value based on its PEG Ratio (3.6x)


Price to Book Ratio

PB vs Industry: 388 is overvalued based on its PB Ratio (10.6x) compared to the HK Capital Markets industry average (0.5x).


Next Steps

Future Growth

How is Hong Kong Exchanges and Clearing forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

12.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 388's forecast earnings growth (12.9% per year) is above the savings rate (1.6%).

Earnings vs Market: 388's earnings (12.9% per year) are forecast to grow slower than the Hong Kong market (21.3% per year).

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

Revenue vs Market: 388's revenue (12.1% per year) is forecast to grow slower than the Hong Kong market (13.6% per year).

High Growth Revenue: 388's revenue (12.1% 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 (32.6%)


Next Steps

Past Performance

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

8.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 388 has high quality earnings.

Growing Profit Margin: 388's current net profit margins (59.4%) are higher than last year (57.5%).


Past Earnings Growth Analysis

Earnings Trend: 388's earnings have grown by 8.5% per year over the past 5 years.

Accelerating Growth: 388's earnings growth over the past year (14.3%) exceeds its 5-year average (8.5% per year).

Earnings vs Industry: 388 earnings growth over the past year (14.3%) exceeded the Capital Markets industry 14.1%.


Return on Equity

High ROE: 388's Return on Equity (22.8%) is considered high.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: 388's short term assets (HK$292.2B) exceed its short term liabilities (HK$266.0B).

Long Term Liabilities: 388's short term assets (HK$292.2B) exceed its long term liabilities (HK$3.5B).


Debt to Equity History and Analysis

Debt Level: 388's debt to equity ratio (0.9%) is considered satisfactory.

Reducing Debt: 388's debt to equity ratio has reduced from 11.9% to 0.9% over the past 5 years.

Debt Coverage: 388's debt is well covered by operating cash flow (3137.9%).

Interest Coverage: 388's interest payments on its debt are well covered by EBIT (91.2x coverage).


Balance Sheet


Next Steps

Dividend

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

1.74%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 388's dividend (1.74%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.2%).

High Dividend: 388's dividend (1.74%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.59%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.6%), 388's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 388's dividends in 3 years are forecast to be covered by earnings (85% payout ratio).


Next Steps

Management

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

4.1yrs

Average management tenure


CEO

Charles Li (59 yo)

10.92yrs

Tenure

HK$51,105,000

Compensation

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...


CEO Compensation Analysis

Compensation vs Market: Charles's total compensation ($USD6.59M) is above average for companies of similar size in the Hong Kong market ($USD838.60K).

Compensation vs Earnings: Charles's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Xiaojia Li
CEO & Executive Director10.92yrsHK$51.11m0.018%
HK$ 84.2m
Romnesh Lamba
Co-President1.92yrsHK$16.25m0.000010%
HK$ 48.0k
Chi Kin Tai
Co-President & COO1.75yrsHK$13.84m0.011%
HK$ 53.0m
Bik Lau
Group Chief Financial Officer0.83yrno data0.0019%
HK$ 9.1m
Ferheen Mahomed
Group General Counsel3.83yrsHK$12.06mno data
Victoria Cowley
Group Chief Communications Officer2.25yrsHK$2.37mno data
Yee Chau
Group Head of Human Resources4.33yrsHK$8.98mno data
Chung Leung
Group Chief Technology Officer9.25yrsHK$10.97mno data
Yau Shing Kwong
Deputy Chief Financial Officerno datano datano data
Felix Wang
Head of Clearing Risk Management - Hong Kong7.92yrsno datano data
Christopher Jones
Co-Head of Clearing Risk Management and Chief Risk Officer of LME Clearno datano datano data
Zhirong Mao
Head of Mainland Development7.58yrsHK$8.90mno data

4.1yrs

Average Tenure

56yo

Average Age

Experienced Management: 388's management team is considered experienced (4.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Xiaojia Li
CEO & Executive Director10.92yrsHK$51.11m0.018%
HK$ 84.2m
Cheng Hye Cheah
Independent Non-Executive Director3.67yrsHK$1.53mno data
Apurv Bagri
Independent Non-Executive Director4.67yrsHK$940.00kno data
Pi Cheng Hung
Independent Non-Executive Director2.67yrsHK$973.00kno data
May-Lung Cha
Independent Chairman of the Board2.58yrsHK$4.61mno data
Tze Ching I. Chan
Independent Non-Executive Director11.67yrsHK$1.29mno data
Rafael Gil-Tienda
Independent Non-Executive Director5.67yrsHK$1.75mno data
Zuliu Hu
Independent Non-Executive Director6.08yrsHK$1.12mno data
John Mackay McCulloch Williamson
Independent Non-Executive Director12.5yrsHK$1.97mno data
Yuen-Mei Fung
Independent Non-Executive Director5.67yrsHK$1.13mno data
Pak Hon Leung
Independent Non-Executive Director3.67yrsHK$1.51mno data
Kin Wah Yiu
Independent Non-Executive Director3.67yrsHK$2.77m0.00016%
HK$ 768.5k

5.2yrs

Average Tenure

60.5yo

Average Age

Experienced Board: 388's board of directors are considered experienced (5.2 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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.


Top Shareholders

Company Information

Hong Kong Exchanges and Clearing Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hong Kong Exchanges and Clearing Limited
  • Ticker: 388
  • Exchange: SEHK
  • Founded:
  • Industry: Financial Exchanges and Data
  • Sector: Diversified Financials
  • Market Cap: HK$480.290b
  • Shares outstanding: 1.26b
  • Website: https://www.hkex.com.hk

Number of Employees


Location

  • Hong Kong Exchanges and Clearing Limited
  • Two Exchange Square
  • 8th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HKXC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2000
388SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2000
HK2CDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2000
388SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2000
388SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2000
HKXC.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

Biography

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 K...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/03 10:19
End of Day Share Price2020/12/03 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.