HKEX's Record First Half: Riding the Wave of a Revived Cash Market
Record ADT, profitable diversification, and the CGB futures launch set HKEX up for the next leg of growth.
0388.HK · Earnings Call · 2026-08-19
Record Half with Broad-Based Strength
Hong Kong Exchanges and Clearing Limited (HKEX) delivered an exceptional first half of 2026, with revenue and profit hitting all-time half-year highs. As CEO Bonnie Y Chan put it, “HKEX delivered an exceptional first half of 2026, reporting the group's best ever half yearly revenue and profit.” — Yiting Chan, Chief Executive Officer · 2026-08-19 The numbers are striking: revenue and other income of HKD 16.7 billion, up 19% year-on-year, and profit after tax of HKD 10.6 billion, up 24%. EPS rose to HKD 8.36, allowing a first interim dividend of 7.43 per share (90% payout). The outperformance was powered by record trading volumes across virtually every asset class — cash equities, derivatives, and commodities all posted half-year ADT records. Headline ADT climbed 18% to HKD 283 billion, while Northbound Stock Connect ADT more than doubled year-on-year. The market momentum is not just a blip. record half results were supported by renewed global investor interest in Chinese Mainland technology and AI names, alongside robust IPO activity. Herbert Hui, the Group CFO, underlined that “Driven by positive market sentiment, strong interest in Chinese Mainland technology and AI-related stocks, sustained momentum in IPO activity and active participation from both international and Chinese Mainland investors, trading volume across the cash market, derivatives market and Stock Connect reached half yearly record highs in first half '26.” — Leung-Wah Hui, Group CFO · 2026-08-19Diversification Paying Off
The earnings call highlighted that HKEX's diversification strategy is delivering across products and geographies. fixed income market development is a strategic focus, with the launch of the first offshore China government bond (CGB) futures on August 3 — a landmark product already attracting heavy institutional interest. Greg Yu noted, “We have seen over the course of just the past 2 weeks, almost every single day, there is a new participant placing orders to test it out.” — Gregory Yu, Executive · 2026-08-19 More than just a single contract, the CGB futures are the foundation for an offshore CNH curve, enabling price discovery and later supporting a deeper cash bond market and repo infrastructure. Bik Lau added that the clearing houses will accept CGB as collateral before year-end, further embedding the product in the ecosystem. ETP growth is another standout. Trading volumes in ETPs contributed 17% of headline ADT, up from ~5% five years ago. The CEO stressed that innovation—like leveraged/inverse products and 60-40 ETFs tied to Southbound Connect—will continue to drive turnover and asset growth. The announcement that mainland insurance companies can invest in HKEX-listed ETPs through Connect is a major catalyst. As Bonnie highlighted,There was a policy announcement yesterday that insurance company on the Chinese Mainland will be allowed to invest in the ETPs listed in Hong Kong through the Connect franchise.
Connectivity and the Next Decade
The Connect franchise remains the core growth engine. Northbound ADT has surged, and the exchange is working to reduce frictions and expand eligibility. Herbert noted that "the number of eligible stocks expanded by about 20%" partly explaining the doubling. Beyond ETFs, the pipeline includes REIT Connect and the Southbound RMB counter. The CEO framed the opportunity as the next decade of connectivity: “Over the past decade, the Connect programs have transformed Hong Kong's role in the global financial system... We believe the next decade of connectivity presents an even greater opportunity.” — Yiting Chan, Chief Executive Officer · 2026-08-19 Northbound ADT is likely to keep growing as more A-shares become eligible and global investors seek exposure to China.IPO Momentum and the A&H Trend
IPO activity is strong, with HKEX ranking as the second global IPO venue in H1 and total fundraising already exceeding the full-year 2025 figure. The CEO addressed the A&H listing narrative, arguing the two markets are complementary. “I actually look at those 2 markets as being highly, highly complementary... If you look at the recent vintage of companies seeking a listing from the Chinese Mainland in particular, a lot of them are in areas or in sectors where – which require a huge amount of capital expenditure to sustain the growth.” — Yiting Chan, Chief Executive Officer · 2026-08-19 With more non-Chinese issuers, like the Indonesian gold miner Merdeka, HKEX is broadening its issuer base. A&H listing remains a durable source of activity.P&L Flow-Through and Cost Discipline
Operationally, the cost base grew 6% (9% ex-non-recurring items) as HKEX invests in talent and technology. Despite that, the incremental revenue growth translates directly to the bottom line, keeping the EBITDA margin attractive. The group's investment income dipped 11% due to margin fund rebates and lower interest rates, but this is a cyclical factor, not a strategic reversal. In summary, HKEX is executing on a multi-asset ecosystem strategy while benefiting from a cyclical upswing in market activity. The record results are not just a windfall—they are the payoff from years of product and infrastructure investments. With the CGB futures franchise, the expansion of the Connect, and a pipeline of new initiatives, the company is positioning itself to sustain momentum. As Bonnie concluded,We remain confident in Hong Kong's future, confident in the strength of our unique growth and confident that we can capture the opportunities that lie ahead.