Hong Kong’s Stock Exchange Reports Record First-half Profits

Hong Kong Exchanges & Clearing Ltd. (HKEX) on Wednesday reported record profits for the first six months of the year as a number of Chinese companies depart the US market and seek listings in the city.

The exchange said its net income rose 1% to a record HK$5.23 billion ($674 million), or HK$4.15 per share in the first half of 2020, beating analysts’ estimates of HK$4.9 billion in a Bloomberg poll. It also reached a record revenue of HK$8.78 billion, up 2% year on year.

“HKEX had a very good first half, set against a turbulent and volatile macro backdrop, reporting record half-yearly revenue and other income, and profit,” HKEX CEO Charles Xiaojia Li said in a statement. “With high cash market turnover, robust trading volumes and a notable number of IPOs, including a number of sizable secondary listings, I am confident that HKEX will continue to play a major role in connecting China and connecting the world.”

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The Hong Kong market saw 64 initial public offerings in the first six months of the year, with a total IPO volume of HK$92.8 billion, up 22% over the same time from last year. That makes Hong Kong one of the world’s top three IPO destinations, following Nasdaq and Shanghai.

E-commerce platform JD.com and mobile games company NetEase, which were both originally listed on Nasdaq, made their secondary listings in Hong Kong in June. NetEase raised a total of HK$21.09 billion from issuing about 171 million new shares in its Hong Kong listing while JD.com raised HK$34.6 billion.

After Alibaba Group Holding Ltd. went public on the Hong Kong Stock Exchange last year, its digital-payments affiliate Ant Group is rumored to be on track to raise $10 billion in a Hong Kong IPO as soon as this month. The company said last month that it has kicked off a concurrent IPO process in Hong Kong and Shanghai.

Li said he couldn’t confirm the rumor but there are a lot of IPOs in queue this year. Though the purposes of these IPOs are different, the arrival of new companies will continue to inject fresh blood into the Hong Kong stock market., he said on Wednesday during the HKEX’s interim results media conference call.

“I can’t comment specifically on Ant Financial or ByteDance, but almost all the reports you see will eventually come to list in Hong Kong. It is only a matter of time,” Li said.