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The rising global interest in Chinese stocks propelled Hong Kong’s stock exchange operator to record quarterly profits, as investors became more hopeful about Chinese tech firms and fresh listings.
In the first quarter, net profit at Hong Kong Exchanges and Clearing surged by 36 percent from the previous year to HK$4.1bn (US$528mn), with revenues climbing 42 percent to HK$5.5bn compared to the same quarter last year. Earnings per share increased nearly a dollar to HK$3.23.
The exchange has capitalized on a wave of initial public offerings (IPOs) and a growing interest from both local and international investors in Hong Kong-listed stocks, particularly technology firms, spurred by optimism surrounding China’s advancements in artificial intelligence and expectations of increased government support from Beijing.
“The renewed global focus on opportunities in China that started in the latter half of 2024 has been gaining momentum into 2025, fueled by exciting advancements in artificial intelligence and innovation,” noted group Chief Executive Bonnie Chan on Wednesday.
Hong Kong has become a key player in global IPOs, as major Chinese firms like BYD, Xiaomi, and Midea have either initiated secondary listings or offered shares in the city over the past six months.
According to Dealogic data, Hong Kong ranked among the top five IPO markets during the first quarter of 2025, with listing activities reaching their highest since 2021.
Chan mentioned that the IPO pipeline expanded by 36 companies, reaching a total of 120 in the first quarter, including the battery manufacturer CATL preparing for secondary listings.
Most of the revenue increase was driven by trading fees, which doubled compared to the previous year as investors opted to buy more stocks. Trading fees from mainland Chinese investors significantly rose, quadrupling from HK$46mn to HK$167mn during the same period.
The exchange also continued to play a crucial role in the internationalization of Chinese assets, allowing Chinese government and policy bank bonds accessed through the Bond Connect scheme—facilitating trade between the mainland and Hong Kong bond markets—to be used as margin collateral for derivatives transactions.
The volume of HKEX’s renminbi futures contracts increased by 57 percent as investors sought to mitigate their exposure to the Chinese currency amid volatile forex conditions. Additionally, trading fees for the London Metal Exchange rose by 10 percent due to a rise in metals contracts.
The group disclosed that it paid a HK$90mn fine to the UK’s Financial Conduct Authority related to the 2022 nickel crisis, where a short squeeze and limited supplies caused prices to spike before the exchange halted trading for a week.
HKEX also announced plans to establish a local settlement house that could rival Euroclear, showing its commitment to “developing an international central securities depository in Asia.”
Recently, the exchange confirmed the acquisition of its permanent headquarters in Exchange Square, located in the Central district of Hong Kong, for approximately US$810mn.
