Hong Kong Exchanges and Clearing Limited

Good afternoon, ladies and gentlemen. Welcome to HKEX 2025 Annual Results Analyst Presentation. Today, we are very pleased to have our Chief Executive Officer, Ms. Bonnie Y. Chen, our COO, Ms. Vanessa Lau, our Group CFO, Mr. Herbert Hui, our Group CIO, Mr. Richard Leung, and our Head of Market, Mr. Gregory Yu. Bonnie and Herbert will first give a presentation about our business highlights, strategic progress, and financial results. Then we're very happy to take some of your questions. Without further ado, over to you, Bonnie.

Good afternoon, everyone. Thank you for joining us today. I hope everyone had an enjoyable holiday season. I'm pleased to be presenting HKEX's annual results for 2025, in which I'm joined by a few members of our senior management team. Now, I will start things off with a quick overview of the highlights. Then, our Group Chief Financial Officer, Herbert Hoy, will share more details on our financial performance. After that, I will return to talk about what is on the horizon from a strategic perspective. So, let's begin. HKX delivered record results in 2025, reporting the Group's best-ever revenue and other income and best-ever profits for the second consecutive year. Herbert will go into these numbers in more details in a few moments. The very decisive return of issuers and investors last year rebuked confidence in Hong Kong's markets and unlocked liquidity. This enabled us to accelerate our strategic initiatives. For listing, we introduced new IPO price discovery rules that enable a more flexible, transparent, and fit-for-purpose pricing and allocation framework. and we continued to increase support for specialist technology issuers. In the securities market, we implemented the first phase of minimum spreads reduction, which very quickly began to demonstrate market efficiency enhancements. In the derivatives market, we launched the Hang Seng Biotech Index Futures, complementing our existing suite of biotech related offerings and flagship equity index derivatives. In 2025, we broke new ground in the development of Hong Kong's fixed income and currency ecosystem. Our agreement to acquire a 20% stake in CMU Omniclare will strengthen Hong Kong's position as the global hub for bond fundraising, risk management, and offshore RMB business. This lays the foundation for a vibrant FIC marketplace that mirrors the depth and liquidity of the equities markets. In commodities, the LME approval of warehouses in Hong Kong, now expanding to a total of 15, is an important milestone signaling the city's potential to becoming a global commodities trading hub. And we expanded our index business with the launch of the HKX Tech 100 Index, our first equity index focused exclusively on Hong Kong's technology sector. In addition to these initiatives, we also invested in establishing our permanent headquarters here in Exchange Square, highlighting our confidence in and commitment to Hong Kong's continued development as an international financial center. These are just some of the highlights of the strategic initiatives we implemented last year. But you can get a sense that in addition to the momentum of our markets, 2025 was also a year of progress driven by reforms and strategic investments. Now, I will return in a few moments to talk about how we are setting our journey ahead. First, let me hand over to Herbert to go over the HKEX Group Financial Review. Over to you, Herbert.

Thank you, Bonnie. Good afternoon and happy new year. I'm pleased to be here to share with you our 2025 full-year financial results. HKEX delivered a record financial performance in 2025 with revenue and profit both posting record highs for the second consecutive year. Driven by increasing international investors seeking diversification and opportunities in China-related assets, together with the greater participation from mainland China investors, trading volumes in Hong Kong cash and derivatives markets reached record highs. The group's commodities market also performed strongly, with LME Chargeable ADV reaching a new record high, surpassing the previous record set more than a decade ago. Revenue and other income of $29.2 billion was 30% higher than 2024. Profit after tax was $17.8 billion and EPS was $14.05 billion. both up 36% compared with the year before. The board has declared a second interim dividend of $6.52 per share, representing 90% of the group's profit attributable to shareholders, excluding the results of HKEX Foundation. Together with the first interim dividend of $6 per share, the 2025 full-year dividend is $12.52, up 35% against 2024. Turning to the detailed financials of the year, trading volumes reached record highs across all markets in 2025. Headline ADT of $249.8 billion was 90% higher than the year before, and both northbound and southbound stock connects saw all-time highs. The derivatives and commodities market also performed strongly with trading volumes increasing by 7% and 8% respectively, compared with 2024. Revenue and other income was 30% higher than 2024, driven by higher trading and clearing fees from increased volumes, higher depository fees and listing fees. Apex was up by 5%, mainly due to the non-recurring FCA fine of $90 million paid in 2025 and recovery of legal fees of $16 million in 2024, both relating to the LME nickel incident. This cost growth is below our historic cost growth trendline. The group's effective tax rate increased to 15.7% in 2025 as compared to 11.4% in 2024 due to the provision of top-up tax under BEPS 2.0 taking effect January last year. Turning to the next page where we look at the fourth quarter 2025 financials against the same period last year. Revenue and profit were both up 15%, driven by increased trading and clearing fees from higher cash market and commodities market volumes. An increase in depository fees and listing fees, partially offset by lower net investment income from margin funds, due to higher rebates payable to participants following the implementation of revised margin rebate arrangement in the fourth quarter of last year. Moving on to the 2025 results against the historical trend line, driven by the positive market momentum since Q4 2024, 2025 performance is above the historical trend line. Throughout the years, HKEX continues to maintain an attractive EBITDA margin, reflecting the successful diversification of our business in recent years and our cost discipline. As we have been building and enhancing our product offerings, market microstructure and technology platform over the last few years, We were well positioned to capture the opportunities arising from this positive momentum. Next, we take a look at our investment income. Total net investment income of internally managed funds in 2025 was 8% higher than 2024, primarily driven by the increase in margin fund size as a result of higher margin requirements and higher open positions. for stock options and the non-recurring fair value gains on our unlisted equity investment, partly offset by lower investment returns and higher rebates to participants. External Portfolio was fully redeemed in May 25 to fund the acquisition of HKX headquarters here, with the proceeds returning to us after the applicable lock-up periods. As at 31st December 25, we have already recovered over 80% of the funds. Now let's look at our operating expenses. OPEX was up 5% in 25 compared with the year before due to a $90 million FCA fine and a recovery of LME legal fees, $60 million in 2024. Excluding these items and the charitable donations, UpEx was up 2% due to high staff costs from payroll adjustments as well as higher IT costs from inflationary increases. In summary, the 2025 financial results were characterized by record trading volumes, disciplined cost management, and successful execution of our strategy. Looking ahead to 2026, we started the year strongly, both in terms of turnover and IPO pipeline. However, net investment income is expected to be affected by our revised margin collateral arrangements that's going to have the full year impact. Hong Kong dollar rate movement and redemptions from our external portfolio. Our strong financial performance and solid financial position have positioned us well to invest in the future and we will continue to enhance and expand our multi-asset ecosystem to support the long-term development of Hong Kong's capital markets. With that, I will now hand back to Bonnie for our business update and outlook.