# Hong Kong Exchange and Clearing (0388.HK)

Canonical: https://gigainvestors.com/s/0388.HK

Analysis as of: 2026-10-16T07:33:50.748Z. Financial observations: FY1999–FY2025.

Listing currency: HKD. Reporting currency: HKD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: HKD 371.40 per share; close as of 2026-10-15.

Estimated value: low HKD 472.89 per share, central HKD 563.82 per share, high HKD 617.44 per share. Buy at or below the central value HKD 563.82 per share. Valuation as of 2026-10-16T07:33:50.748Z; scenarios are not confidence intervals.

Expected annual return: 20.7% at the stated quote. About 20.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; HK 10-year bond 4.0% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.08×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.66×

- FY2017: 0.76×

- FY2018: 0.77×

- FY2019: 0.83×

- FY2020: 0.80×

- FY2021: 0.77×

- FY2022: 0.69×

- FY2023: 0.87×

- FY2024: 0.86×

- FY2025: 0.73×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 22.5%

- ROIC, second-lowest year: 19.1%

- Typical minus recent gross margin: 2.7 pp

- Typical gross margin (annual median): 77.3%

- Recent gross margin (lower of latest and 3-year median): 74.6%

- Years with nonpositive capital: 10

- Capital spending / revenue: 6.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 15.0%

- FY2017: 19.1%

- FY2018: 22.4%

- FY2019: 20.5%

- FY2020: 22.5%

- FY2021: 24.1%

- FY2022: 19.5%

- FY2023: 22.7%

- FY2024: 23.7%

- FY2025: 30.0%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 0.98×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: HKD 64B

- Net income, five-year total: HKD 65B

- Return on incremental invested capital: 42.9%

- Working capital / revenue, annual change: 11.1 pp

- Working capital / revenue, change between three-year averages: 75.4 pp

- Working capital / revenue, final three-year average: 24.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.99×

- FY2022: 0.98×

- FY2023: 0.98×

- FY2024: 0.98×

- FY2025: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 19.1% vs 23.7%

- Per-share earnings: 5.99 to 10.29 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.4%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: HKD 293B

- Cumulative retained earnings: HKD 15B

- Diluted shares, 10-year annual growth: 0.4%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 7.0%

- Per-share value change: HKD 4.31

- Per-share value, starting three-year median: HKD 5.99

- Per-share value, ending three-year median: HKD 10.29

- Buybacks concentrated in cheaper years (correlation): 0.72

- Average buyback yield: 0.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: HKD 5.1B

- Cumulative net income, 10 years: HKD 109B

- ROIC, first three-year median: 19.1%

- ROIC, last three-year median: 23.7%

Chart: Earnings per share; fiscal year observations.

- FY2016: HKD 4.72

- FY2017: HKD 5.99

- FY2018: HKD 7.44

- FY2019: HKD 7.49

- FY2020: HKD 9.07

- FY2021: HKD 9.89

- FY2022: HKD 7.95

- FY2023: HKD 9.36

- FY2024: HKD 10.29

- FY2025: HKD 14.01

### accounting: pass

- Sloan accruals: -0.9%

- Receivables to sales index (DSRI): 1.20×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 1.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.28×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.38×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 0.9%

- FY2017: -0.0%

- FY2018: -0.1%

- FY2019: -0.2%

- FY2020: -0.8%

- FY2021: 0.0%

- FY2022: -1.2%

- FY2023: 0.1%

- FY2024: 0.1%

- FY2025: -0.9%

## Holders

## Price story

Down 21% since Oct 2021 · "HKEX CEO Bonnie Chan says geopolitics and economic uncertainty may dim IPO outlook" (finance.yahoo.com, Oct 2025) · sales +68.1%

Story as of 2026-10-16T09:59:57.981Z; price observation 2026-10-15.

Price needs cash profits to shrink 6% a year for ten years

- 2026-08-19: Hong Kong Exchange Posts Record Earnings on IPO, Trading Boom ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/hong-kong-exchange-posts-record-040748317.html))

### Sales · FY2024–2025

sales +68.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: HKD 10B 

- FY2017: HKD 12B 

- FY2018: HKD 14B 

- FY2019: HKD 14B 

- FY2020: HKD 17B 

- FY2021: HKD 19B 

- FY2022: HKD 17B 

- FY2023: HKD 15B 

- FY2024: HKD 17B 

- FY2025: HKD 29B 

### Gross margin · FY2025

gross margin 85%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 75.6% 

- FY2017: 76.6% 

- FY2018: 78.6% 

- FY2019: 75.4% 

- FY2020: 78.0% 

- FY2021: 83.1% 

- FY2022: 78.5% 

- FY2023: 74.2% 

- FY2024: 74.6% 

- FY2025: 85.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in financial data & stock exchanges; annual sales are HKD 29.2 billion.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2025-12-31 (filed 2026-10-16T07:33:50.748Z); FY2025: revenue 29161000000; grossProfit 24773000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 0388.HK: Hong Kong Exchanges and Clearing Limited, together with its subsidiaries, owns and operates stock and futures exchanges, and related clearing houses in Hong Kong, the United Kingdom, and Mainland China. It operates through Cash, Equity and Financial Derivatives, Commodities, and Data and Connectivity segments. The Cash segment covers various equity products traded on the cash market platforms of the Stock Exchange of Hong Kong Limited, as well as through the Shanghai-Hong Kong and the Shenzhen-Hong Kong stock connects; clearing, settlement and custodian, listing, depository, and nominee services; and other related activities. Its Equity and Financial Derivatives segment provides and maintains trading and clearing platforms for a range of equity and financial derivative products, such as stock and equity index futures and options, derivative warrants, callable bull/bear contracts and warrants, and over the counter derivatives contracts. The Commodities segment operates an exchange for the trading of base and ferrous metals futures and options contracts in the United Kingdom; and operates Qianhai Mercantile Exchange Co., Ltd., a commodity trading platform in Mainland China. This segment also covers commodities contracts traded on Futures Exchange. Its Data and Connectivity segment offers various services that provides access to the platform and infrastructure, as well as services of BayConnect Technology Company Limited; network, terminal user, data line and software sublicense, and hosting services; and sells market data relating to the Hong Kong cash and derivatives markets. The company serves issuers and investors. Hong Kong Exchanges and Clearing Limited was incorporated in 1999 and is based in Central, Hong Kong.

### Why customers stay

Margins ranged from 74.2% to 85% during 2023–25; it earns 22.5% on its capital.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2023-12-31 (filed 2026-10-16T07:33:50.748Z); FY2023: grossProfit / revenue = 74.2%.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2024-12-31 (filed 2026-10-16T07:33:50.748Z); FY2024: grossProfit / revenue = 74.6%.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2025-12-31 (filed 2026-10-16T07:33:50.748Z); FY2025: grossProfit / revenue = 85%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:50.748Z); 10-year return on capital observations [[2016,0.1499713708180681],[2017,0.19113584267689748],[2018,0.22405099134204817],[2019,0.20544149902714237],[2020,0.2253818552397121],[2021,0.24103005822300522],[2022,0.1953855027558088],[2023,0.22717816042010636],[2024,0.23702341219427928],[2025,0.2995072123005252]]; median 0.22471642329088015. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 21.4% of cash earnings; earns 42.9% on new investment.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2016-12-31 (filed 2026-10-16T07:33:50.748Z); FY2016: growth capex 0; upkeep 620000000; owner earnings 5920000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2017-12-31 (filed 2026-10-16T07:33:50.748Z); FY2017: growth capex 0; upkeep 688000000; owner earnings 7574000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2018-12-31 (filed 2026-10-16T07:33:50.748Z); FY2018: growth capex 98000000; upkeep 762000000; owner earnings 9312000000. Growth capex / owner earnings = 0.01052405498281787.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2019-12-31 (filed 2026-10-16T07:33:50.748Z); FY2019: growth capex 0; upkeep 1091000000; owner earnings 8842800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2020-12-31 (filed 2026-10-16T07:33:50.748Z); FY2020: growth capex 154000000; upkeep 1197000000; owner earnings 11033400000. Growth capex / owner earnings = 0.013957619591422409.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2021-12-31 (filed 2026-10-16T07:33:50.748Z); FY2021: growth capex 0; upkeep 1070000000; owner earnings 12407200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2022-12-31 (filed 2026-10-16T07:33:50.748Z); FY2022: growth capex 0; upkeep 1284000000; owner earnings 9904000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2023-12-31 (filed 2026-10-16T07:33:50.748Z); FY2023: growth capex 0; upkeep 1386000000; owner earnings 11598200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2024-12-31 (filed 2026-10-16T07:33:50.748Z); FY2024: growth capex 202000000; upkeep 1402000000; cash acquisitions 0; owner earnings 12791200000. Growth capex plus acquisitions / owner earnings = 0.01579210707361311.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2025-12-31 (filed 2026-10-16T07:33:50.748Z); FY2025: growth capex 165000000; upkeep 1568000000; cash acquisitions 3603000000; owner earnings 17583800000. Growth capex plus acquisitions / owner earnings = 0.2142881515940809.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:50.748Z); Incremental return on capital 0.4292572684386814, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:50.748Z); Dividend observations: [[2016,3329000000],[2017,2561000000],[2018,5427000000],[2019,5785000000],[2020,6983000000],[2021,11527000000],[2022,9665000000],[2023,10316000000],[2024,10416000000],[2025,13722000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/api/fundamentals/0388.HK.json#2025-12-31 (filed 2026-10-16T07:33:50.748Z); FY2025: cash repurchases 512000000 HKD.

### Are managers owners

Insiders own 6.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 0388.HK SharesStats.PercentInsiders = 6.199000000000001 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits shrink 6% yearly over ten years; actual growth was 7.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:50.748Z); Ten-year compound average after fade. Initial solved rate -0.0972132708992311. Price 371.4; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 6.555921906741599 → FY2025 13.872120066521296. Closing-price date 2026-10-15.

## Monthly share-price history (HKD per share)

- 2016-10: HKD 205.40 per share

- 2016-11: HKD 204.00 per share

- 2016-12: HKD 183.20 per share

- 2017-01: HKD 188.70 per share

- 2017-02: HKD 192.70 per share

- 2017-03: HKD 195.60 per share

- 2017-04: HKD 191.60 per share

- 2017-05: HKD 196.70 per share

- 2017-06: HKD 201.80 per share

- 2017-07: HKD 222.80 per share

- 2017-08: HKD 213.60 per share

- 2017-09: HKD 210.00 per share

- 2017-10: HKD 217.20 per share

- 2017-11: HKD 235.20 per share

- 2017-12: HKD 239.80 per share

- 2018-01: HKD 296.40 per share

- 2018-02: HKD 284.00 per share

- 2018-03: HKD 255.20 per share

- 2018-04: HKD 257.20 per share

- 2018-05: HKD 253.80 per share

- 2018-06: HKD 236.00 per share

- 2018-07: HKD 231.60 per share

- 2018-08: HKD 223.40 per share

- 2018-09: HKD 224.00 per share

- 2018-10: HKD 208.00 per share

- 2018-11: HKD 228.00 per share

- 2018-12: HKD 226.60 per share

- 2019-01: HKD 244.00 per share

- 2019-02: HKD 270.60 per share

- 2019-03: HKD 273.60 per share

- 2019-04: HKD 272.00 per share

- 2019-05: HKD 249.40 per share

- 2019-06: HKD 275.80 per share

- 2019-07: HKD 265.60 per share

- 2019-08: HKD 240.00 per share

- 2019-09: HKD 230.00 per share

- 2019-10: HKD 245.00 per share

- 2019-11: HKD 247.20 per share

- 2019-12: HKD 253.00 per share

- 2020-01: HKD 258.80 per share

- 2020-02: HKD 255.80 per share

- 2020-03: HKD 233.80 per share

- 2020-04: HKD 252.00 per share

- 2020-05: HKD 270.20 per share

- 2020-06: HKD 330.00 per share

- 2020-07: HKD 370.20 per share

- 2020-08: HKD 391.20 per share

- 2020-09: HKD 361.80 per share

- 2020-10: HKD 370.20 per share

- 2020-11: HKD 385.40 per share

- 2020-12: HKD 430.00 per share

- 2021-01: HKD 497.40 per share

- 2021-02: HKD 473.20 per share

- 2021-03: HKD 457.40 per share

- 2021-04: HKD 470.00 per share

- 2021-05: HKD 485.80 per share

- 2021-06: HKD 462.80 per share

- 2021-07: HKD 496.00 per share

- 2021-08: HKD 490.80 per share

- 2021-09: HKD 479.80 per share

- 2021-10: HKD 470.80 per share

- 2021-11: HKD 430.00 per share

- 2021-12: HKD 455.40 per share

- 2022-01: HKD 440.00 per share

- 2022-02: HKD 377.60 per share

- 2022-03: HKD 371.40 per share

- 2022-04: HKD 337.80 per share

- 2022-05: HKD 339.20 per share

- 2022-06: HKD 386.00 per share

- 2022-07: HKD 359.00 per share

- 2022-08: HKD 317.80 per share

- 2022-09: HKD 269.60 per share

- 2022-10: HKD 209.00 per share

- 2022-11: HKD 306.00 per share

- 2022-12: HKD 337.20 per share

- 2023-01: HKD 352.40 per share

- 2023-02: HKD 314.60 per share

- 2023-03: HKD 348.20 per share

- 2023-04: HKD 324.00 per share

- 2023-05: HKD 286.60 per share

- 2023-06: HKD 295.20 per share

- 2023-07: HKD 325.80 per share

- 2023-08: HKD 304.00 per share

- 2023-09: HKD 292.60 per share

- 2023-10: HKD 275.00 per share

- 2023-11: HKD 277.20 per share

- 2023-12: HKD 268.00 per share

- 2024-01: HKD 236.60 per share

- 2024-02: HKD 242.80 per share

- 2024-03: HKD 227.80 per share

- 2024-04: HKD 251.60 per share

- 2024-05: HKD 262.80 per share

- 2024-06: HKD 250.20 per share

- 2024-07: HKD 231.80 per share

- 2024-08: HKD 240.40 per share

- 2024-09: HKD 326.20 per share

- 2024-10: HKD 310.80 per share

- 2024-11: HKD 289.80 per share

- 2024-12: HKD 295.20 per share

- 2025-01: HKD 303.00 per share

- 2025-02: HKD 350.00 per share

- 2025-03: HKD 344.80 per share

- 2025-04: HKD 340.80 per share

- 2025-05: HKD 395.80 per share

- 2025-06: HKD 418.80 per share

- 2025-07: HKD 427.00 per share

- 2025-08: HKD 451.00 per share

- 2025-09: HKD 442.00 per share

- 2025-10: HKD 423.60 per share

- 2025-11: HKD 411.00 per share

- 2025-12: HKD 407.80 per share

- 2026-01: HKD 432.20 per share

- 2026-02: HKD 419.00 per share

- 2026-03: HKD 388.60 per share

- 2026-04: HKD 412.40 per share

- 2026-05: HKD 399.80 per share

- 2026-06: HKD 363.00 per share

- 2026-07: HKD 408.60 per share

- 2026-08: HKD 425.20 per share

- 2026-09: HKD 387.80 per share

- 2026-10: HKD 371.40 per share

## Annual estimated value (HKD per share)

- FY2016: low HKD 141.31 per share, central HKD 148.57 per share, high HKD 158.24 per share

- FY2017: low HKD 285.61 per share, central HKD 293.64 per share, high HKD 304.33 per share

- FY2018: low HKD 254.36 per share, central HKD 265.52 per share, high HKD 280.37 per share

- FY2019: low HKD 166.06 per share, central HKD 176.69 per share, high HKD 190.84 per share

- FY2020: low HKD 247.14 per share, central HKD 288.30 per share, high HKD 314.81 per share

- FY2021: low HKD 406.10 per share, central HKD 464.56 per share, high HKD 498.60 per share

- FY2022: low HKD 332.70 per share, central HKD 377.06 per share, high HKD 404.63 per share

- FY2023: low HKD 263.79 per share, central HKD 275.76 per share, high HKD 291.69 per share

- FY2024: low HKD 279.89 per share, central HKD 293.41 per share, high HKD 311.40 per share

- FY2025: low HKD 448.74 per share, central HKD 531.93 per share, high HKD 580.98 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:36.673Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.