2020 1H Results Analyst Presentation Charles Li Chief Executive, - PowerPoint PPT Presentation

2020 1H Results Analyst Presentation Charles Li Chief Executive, HKEX Group Romnesh Lamba Co-President, HKEX Group Vanessa Lau Group Chief Financial Officer, HKEX Group 19 Aug 2020

Disclaimer The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or service of any kind. This document is solely intended for distribution to and use by professional investors. This document is not directed at, and is not intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Hong Kong Exchanges and Clearing Limited (“HKEX”) to any registration requirement within such jurisdiction or country. This document contains forward-looking statements which are based on the current expectations, estimates, projections, beliefs and assumptions of HKEX about the businesses and the markets in which it and its subsidiaries operate. These forward-looking statements are not guarantees of future performance and are subject to market risk, uncertainties and factors beyond the control of HKEX. Therefore, actual outcomes and returns may differ materially from the assumptions made and the statements contained in this document. Where this document refers to Shanghai-Hong Kong Stock Connect and/or Shenzhen- Hong Kong Stock Connect (together, the “Stock Connect” programs), please note that currently, access to northbound trading is only available to intermediaries licensed or regulated in Hong Kong; southbound trading is only available to intermediaries licensed or regulated in Mainland China. Direct access to the Stock Connect is not available outside Hong Kong and Mainland China. Where this document refers to Bond Connect, please note that currently, access to northbound trading is only available to foreign investors that are able to trade onshore bonds on the China Foreign Exchange Trade System & National Interbank Funding Centre. Although the information contained in this document is obtained or compiled from sources believed to be reliable, HKEX does not guarantee the accuracy, validity, timeliness or completeness of the information or data for any particular purpose, and shall not accept any responsibility for, or be liable for, errors, omissions or other inaccuracies in the information or for the consequences thereof. The information set out in this document is provided on an “as is” and “as available” basis and may be amended or changed. It is not a substitute for professional advice which takes account of your specific circumstances and nothing in this document constitutes legal advice. HKEX shall not be responsible or liable for any loss or damage, directly or indirectly, arising from the use of or reliance upon any information provided in this document. 2

Agenda 01 1H 2020 Key Highlights 02 HKEX Group Financial Review 03 Business and Strategic Update 04 Appendix 3

1H 2020 Key Highlights 1 | Financial Performance  Record half-yearly revenue and profit despite challenging macroeconomic backdrop with core business revenue up by 13%YoY; total revenue up by 2%YoY and PAT up by 1%YoY  Record half-yearly Stock Connect revenue of HK$743mn (+46%YoY)  Net investment income fell HK$681mn, primarily due to the fair value losses of collective investment schemes previously announced at Q1  off in March 2020 2 | Business and Strategy Strong IPO Market – #2 globally in number of new company listings (64) and #3 in IPO  funds raised (HK$92.8bn)  Strong performance in Connect Schemes – all achieved half-yearly record high ADT  Major licensing agreement for MSCI Asia & EM indexes to offer suite of 37 new contracts, further expanding HKEX product ecosystem  Ongoing market microstructure enhancements and technology capabilities enhancement 3 | In focus - A new Era of Liquidity in Hong Kong  Premier, global fundraising venue for new economy and jumbo IPOs, contributing to increasing trading activities  Holistic product ecosystem encompassing HK, international and onshore underlying 4

HKEX Group Financial Review 5

Key Financial Highlights Record half-yearly revenue and profit Strong core business performance; market conditions impacted investment income (HK$) Total revenue & other income Core business revenue Net investment income -45% +2% +13% $8.6bn $8.8bn $7.1bn $7.9bn $1.5bn $0.8bn 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 EBITDA PAT Basic earnings per share +1% +1% -0% $4.16 $4.15 $6.6bn $6.7bn Dividend per share 2 $5.2bn $5.2bn 1H 2019 1H 2020 -0% Margin 1H 2020 1H 2019 $3.72 $3.71 77% 76% 1H 2019 1H 2020 1. % is computed based on amounts reported in financial statements. 2. The 2020 first interim dividend will be payable in cash, without a scrip alternative. 3. Does not add up due to roundings. 6

1H 2020: Record Half-Yearly Revenue and Profit Revenue and Operating Profit attributable to HKEX income EBITDA Basic earnings per share other income expenses (1) shareholders (2) (HK$ mn) (HK$) Core business+NII Core business+NII Core business+NII Core business+NII + 6% + 2% + 1% + 1% - 0% Core business Core business Core business Core business + 13% + 15% + 19% + 18% ADT 77% Margin 76% HK$97.9bn +20% HK$117.5bn 8,782 8,578 NII 838 NII 1,519 6,706 6,625 NII 838 5,205 5,233 NII 1,519 4.16 4.15 NII 838 NII 1,519 Core business NII 0.66 Core business 7,944 NII 1.21 7,059 Core business 2,076 1,953 Core business 5,868 Core business 5,106 Core business Core business 4,395 Core business 3,686 3.49 2.95 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 1H 2019 1H 2020 Trading & clearing fees  from Staff costs  from  HC mainly EBITDA margin  1% PAT %  similar to EBITDA EPS  due to shares issued for  ADT and record Stock Connect from BayConnect acquisition & scrip dividends revenue payroll adj IT costs  from new IT systems Listing fees  from record newly and network upgrade listed CBBCs Professional fees  from Net Investment income (NII)  strategic projects and business due to HK$138mn losses from initiatives external portfolio in 1H 2020 (vs HK$535mn record gains in 1H 2019) 1. Excludes depreciation and amortisation, finance costs, and share of profits/(losses) of joint ventures 2. For the purpose of this presentation, tax impact of NII is not considered when calculating the PAT attributable to NII. 7

Q2 2020: Quarterly Record High Due to Rebound of External Portfolio and Seasonality Profit attributable to Operating expenses (1) Revenue and other income EBITDA HKEX shareholders (2) (HK$ mn) Core business+NII Core business+NII Core business+NII + 3% + 25% + 31% + 19% Core business Core business Core business - 4% - 6% - 10% ADT 74% Margin 78% HK$120.9bn - 6% HK$114.0bn 4,773 4,009 NII 885 3,722 2,984 2,971 NII 885 2,262 NII 885 Core business Core business 4,056 3,888 Core business Core business 1,025 1,051 3,031 Core business 2,837 Core business 2,309 2,086 NII (47) NII (47) NII (47) Q1 2020 Q2 2020 Q1 2020 Q2 2020 Q1 2020 Q2 2020 Q1 2020 Q2 2020 NII  due to rebound of external portfolio PAT %  higher than EBITDA due to one- EBITDA margin  4% Stable opex due to stringent cost control (Q2: HK$383mn gains; Q1: HK$521mn off deferred tax charge in Q1 2020 losses) Depository, custody and nominee service fees  due to seasonality Partly offset by: Trading and clearing fees  from  ADT & ADV 1. Excludes depreciation and amortisation, finance costs, and share of profits/(losses) of joint ventures 2. The tax impact of NII is not considered when calculating the PAT attributable to NII. 8

1H 2020 Performance above Historical Trendline Quarterly performance (HK$ million) Profit attributable to shareholders Revenue and other income 4,773 (1) Operating expenses EBITDA 4,288 4,290 4,150 4,102 4,057 4,044 4,009 3,987 3,746 3,747 3,571 3,523 3,722 3,454 3,318 3,307 3,155 3,195 3,215 2,879 3,077 3,061 3,038 2,984 2,775 3,048 2,796 2,866 2,848 2,600 2,751 2,638 2,555 2,404 2,971 2,567 2,277 2,608 2,597 2,078 2,562 2,520 2,215 2,479 2,443 2,014 2,045 2,330 1,946 1,897 2,262 2,207 1,705 2,033 1,979 1,878 1,828 1,777 1,716 1,575 1,553 1,543 1,531 1,432 1,241 1,167 1,146 1,051 1,025 1,025 968 983 970 983 949 933 935 887 881 878 862 854 829 834 834 833 718 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2019 2020 2015 2016 2018 1H 2020 performance reflects resiliency of core business despite macroeconomic and COVID-19 induced uncertainty. 1. Excludes depreciation and amortisation, finance costs, share of profits/(losses) of joint ventures, and non-recurring costs arising from the proposed combination with London Stock Exchange Group (LSEG) 2. Dotted trend lines are illustrative and do not constitute a forward forecast. 9