Hong Kong Exchanges and Clearing Limited (0388.HK) Earnings Call Transcript & Summary

This meeting will be conducted in English. Please use the headphone to listen to the simultaneous interpretation in Cantonese, channel 2; or Putonghua, channel 3. For those joining us through the webcast, you may select the corresponding audio channel on the top right-hand corner of your screen to hear the interpreter speaking in your language of choice. Before the meeting commences, would you please switch off your mobile phone or turn it to the silent mode, please. As mentioned in our circular to shareholders dated the 15th March 2023, poll voting at this AGM will be conducted by electronic means to enhance efficiency and transparency in the vote counting process. Upon registration, each of you has been given a handheld voting device equipped with a personalized smart card, which carries your name and represented shares. I now invite Mr. Richard Hong, the representative of our share registrar, to explain and demonstrate how to operate the voting device. Richard will speak in Cantonese. Please use the headphone to listen to the simultaneous interpretation in Putonghua, channel 3; or English, channel 4. Richard, please?

[Interpreted] Thank you. Mr. Fu, subject to the Chairman's direction, all proposed resolutions will be resolved today by poll and conducted by electronic means. Please ensure that each of you being a shareholder, proxy or corporate representative, has a voting device together with a smart card. If you don't, please raise your hand. Please make sure that the smart card has been properly inserted into the voting device and your name and represented shares appear on the screen. If you need help, please raise your hand. We will now use a sample question to demonstrate how to use the voting device. After I've declared the poll open, the voting options will appear on the screen of the voting device. Please press 1 to vote for or press 2 to vote against. Your submitted vote will appear on the screen of your voting device. If you want to cancel your submitted vote, please press X. If you wish to abstain from voting, you shall not press any button. You can vote or change or cast vote at any time before the poll is declared closed. Any votes cast or revisions made after the poll is closed, will be invalid. Your final vote cast will appear on the screen of the voting device. If you have any questions, please raise your hand. For demonstration, please consider Shanghai-Hong Kong Stock Connect was launched on the 17th of November 2014. Please press 1 to vote for or press 2 to vote against. If you wish to abstain from voting, please do not press any button. I now declare the poll open, and it will close in 10 seconds. It is now time. I declare the poll closed. The electronic voting system has completed the vote counting. The poll results will be displayed on the screen. The majority voted for Shanghai-Hong Kong Stock Connect was launched on the 17th of November 2014. Let's give it 1 more trial. The first special purpose acquisition company, SPAC, listing in Hong Kong took place on the 18th of March 2022. Please press 1 to vote for. Press 2 to vote against. If you wish to abstain from voting, please do not press any button. I now declare the poll open. It will close in 10 seconds. It is now time. I declare the poll closed. The electronic voting system has completed the vote counting. The poll results will be displayed on the screen. The majority voted for the first special purpose acquisition company, SPAC, listing in Hong Kong took place on the 18th of March 2022. If you have any questions on the operation of the voting device, please raise your hand. If there are no questions, I'll pass over to Mr. Fu to start the meeting.

No further questions. I now invite the Chairman to conduct the Annual General Meeting. Chairman, please.

Thank you. Good afternoon, ladies and gentlemen. A very warm welcome to all of you to our Annual General Meeting. Before we start today's AGM, I would like to express my sincere thanks to our shareholders for their unwavering support over the last year. HKEX continued to demonstrate focus and resilience in 2022, which was another very challenging year. I'm proud to note that we have accomplished and announced a significant number of important strategic initiatives during the year, thanks to the hard work of the entire HKEX team. Whilst the macroeconomic environment remains challenging and uncertain, with the reopening of Mainland China, Hong Kong and our share border, we are more optimistic about Hong Kong's financial market and its economy in 2023. I'm confident that with our focus on driving connectivity, innovation and sustainability across our markets as well as our focus on our stakeholders across our business, HKEX remains very well positioned to lead and shape the development of the region's capital markets. As there is a quorum of shareholders present, I now call the meeting to order. Before proceeding further, pursuant to Article 67.1a of the company's Articles of Association, I demand poll voting on all resolutions set out in the notice of this meeting. Furthermore, pursuant to Article 68.1 of the company's Articles of Association, I direct that poll voting will be conducted and taken by electronic means. BDO Limited, our independent scrutineer will monitor the electronic voting process and certify the poll results. The certified poll results will be published on the HKEX Group website and on the HKEX News website. The notice for this meeting was set out in the circular dated 15th of March 2023, which have been sent to all of you and tabled at this meeting. The resolutions to be considered by shareholders will be proposed in the sequence as set out in the notice. Poll voting will be conducted after each resolution has been proposed. If there are no questions, with your consent, I will propose to take the notice of this meeting as read. No objection? Thank you. The proposed resolution #1 is to receive the audited financial statements for the year ended 31st of December 2022, together with the reports of the directors and the auditor thereon. The auditor's report is included in the 2022 annual report, which has been sent to you all and tabled at this meeting. With your consent, I will propose to take it as read. No objection? Thank you. The audited financial statement for the year ended 31st December 2022, together with the reports of the directors and the auditors, have been included in the 2022 annual report, which has been sent to you all. Our Group Chief Financial Officer, our CEO, my fellow Board members and I shall be pleased to answer any questions on the accounts from the management's perspective. And our auditor is also pleased to answer any question regarding the audit, the content of the auditor's report and the accounting policies. Are there any questions on the report? Now -- I now propose that the resolution #1 be approved. Please use the voting device to cast your vote. Please press 1 to vote for or press 2 to vote against. Do not press any button if you choose to abstain from voting. I now declare the poll open, which will close in 10 seconds. [Voting]

It is now time, and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting votes account for more than 50% of the vote cast, I declare the resolution carried. The proposed resolution #2 is to elect directors. There are 2 candidates standing for reelection. The 2 candidates are Cheah Cheng Hye and Leung Pak Hon, Hugo, who are incumbent directors retiring at the end of this meeting, but they are both eligible for reappointment. The Board has recommended both of them to stand for reelection. Relevant information of Mr. Cheah and Mr. Leung is included in the circular dated March 15, 2023, which have been sent to you all. As there are 2 candidates, the proposed reelection will be decided by 2 separate resolutions. I now propose the resolution #2a that Cheah Cheng Hye be and is hereby reelected as a Director of the company with effect from the conclusion of the 2023 AGM for a term of approximately 3 years, expiring at the conclusion of the company's AGM to be held in 2026. Are there any questions on the proposed reelection? I now declare the poll open, which will close in 10 seconds. [Voting]

It is now time, and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting votes account for more than 50% of the vote cast, I declare the resolution carried. I now propose the resolution #2b that Mr. Leung Pak Hon, Hugo be and is hereby reelected as a Director of the company with effect from the conclusion of the 2023 AGM for a term of approximately 3 years, expiring at the conclusion of the company's AGM to be held in 2026. Are there any questions on the proposed reelection? I now declare the poll open, which will close in 10 seconds. [Voting]

I now declare the poll -- I now -- it is now time, and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting votes account for more than 50% of the votes cast, I declare the resolution carried. The proposed resolution #3 is to reappoint PricewaterhouseCoopers as the auditor and to authorize the Directors to fix its remuneration. The company's financial statements for the year ended 31st December 2022 were audited by PricewaterhouseCoopers, who has expressed its willingness to continue in office. Are there any questions on the proposed reappointment of auditor and authorization of Directors to fix its remuneration? I now propose resolution #3 be approved. I now declare the poll open, which will close in 10 seconds. [Voting]

It is now time, and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting vote account for more than 50% of the votes cast, I declare the resolution carried. The proposed resolution #4 is to grant a general mandate to the Directors to buy back not exceeding 10% of the number of the company's shares in issue at the date of this resolution. Details of the proposed buyback mandate are set out in the circular dated 15 March 2023, which has been sent to you all. Are there any questions? I now propose that the resolution #4 be approved. I now declare the poll open, which will close in 10 seconds. [Voting]

It is now time, and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting votes account for more than 50% of the broadcast, I declare the resolution carried. The proposed resolution #5 is to grant a general mandate to the Directors to allot, issue and deal with additional shares not exceeding 10% of the shares of the company's shares issued at the date of the resolution. And the discount for any share to be issued shall not exceed 10%. Details of the proposed issue mandate are set out in the circular dated 15 March 2023, which have been sent to you all. Are there any questions? I now propose that the Resolution #5 be approved. I now declare the poll open, which will close in 10 seconds. [Voting]

It is now time and I declare the poll closed. The poll result is now displayed on the screen. Given that the supporting vote account for more than 50% of the vote cast, I declare the resolution carried. Ladies and gentlemen, as there is no other business, the 2023 AGM is now closed. Thank you for coming to the meeting and to those of you who have voted by proxy and those who have watched on our live webcast. I see that there is 1 question.

[Interpreted] Greetings. I'm going to speak in Cantonese. Is that fine? I want to speak in Cantonese. Is that fine?

[Interpreted] Yes. Please proceed.

[Interpreted] Well, I was at the previous AGM last year, and I did speak about AGM as well. And if you watch the news of the previous AGM, you would know. And I'm following the same line of my questioning today. Now COVID is gradually behind us and I am also watching a number of companies, more and more of these companies. And I see that there have been improvements in a couple of areas that I've talked about in the previous AGM, but it's not been resolved yet. Now, first of all, about AGM information. It's also in the news as well. Some of the AGMs are actually not held in Hong Kong at all. And maybe they have electronic means in conducting the AGMs. Now the latter is not a problem as such. But I register a couple of days ago, there was an older gentleman who was holding onto a Nokia phone set. Well, my question is, how can you make sure that the shareholders can indeed join the AGMs using modern devices? Well, at one of the meetings, I asked the question and I could only type in the question, and I said, hi many times at the electronically-held AGM, and it was a long time before they notice my question. And well, I think the AGM at the Hong Kong EX is good, you have webcast and at the same time, you're holding a physical meeting. But for a lot of listed companies to hold the AGM outside of Hong Kong is their practice. Now perhaps there can be hybrid meetings with electronic means as well. So Singapore, Malaysia, China Mainland companies, if they can provide an option of holding a meeting in Hong Kong that would be good. At the minimum, have a meeting at the company's office with webcast. So with the webcast, the shareholders can ask questions as well. So I know that the listing rules have a minimum safeguard for the shareholders, and that is they can ask questions at the AGM. I do want to see improvement among listed companies in Hong Kong in this regard. Now further, in May, June peak season for AGM, perhaps in the same time slot, there may be 3. Actually, it's happened that we have 6 AGMs held at the same time slot. And for people like me who are holding onto shares of multiple companies. Look at what I have here on hand. I have over 1,000 listed companies shares on hand. And I simply cannot attend all those meetings. And why I say webcast is not feasible, is not good because for all the companies that I invest in, they have dividend payout, et cetera. And I really would want to attend these AGMs. Perhaps, you can do some coordination, limited 3 companies to each time slot for AGM.

[Interpreted] Well, thank you for your suggestion. For the listed companies, AGMs, what format they take, the listing rules actually has certain stipulations on that. Now if the listed companies are following the listing rules, we would think that they already comply. As for many companies holding the AGM at the same time slot, that is beyond the Hong Kong Stock Exchange because the companies will determine their own time for holding the AGM. We cannot say because they are overlapping with another company that we disallow it, we can't because this is a commercial decision. But of course, I think your spirit is commendable and we agree to it, and that is to say you want to allow more shareholders in attending the AGMs. But on the other hand, we have the listing rules. Now the speaker is not using a microphone. The interpreters can't hear her. Well, Hong Kong is an international financial center. Many companies are not only registered in Hong Kong. Some companies are domiciled outside of Hong Kong, and we welcome all companies in coming to Hong Kong for listings. And in their articles, there are stipulations protecting the rights and interest of shareholders. Thank you for your question.

[Interpreted] I'd like to ask about ESG. Hong Kong EX, we actually received a lot of annual reports. It is good that we can choose to receive it or not. For seniors, they may need the annual reports. Otherwise, they will not know about the development of the company. But for some companies, when you write to them saying that you don't -- that we don't need an annual report, because like -- therefore, siblings in our family, we don't need 4 copies of the annual report. But they were saying that this is a rule by the Hong Kong EX. Can we save some papers? That's really my question.

Thank you. Thank you for your suggestion. And also -- I also like to say to Mr. Hong. HSBC holds shareholders' meetings in Hong Kong or maybe an introductory meeting. So I support HSBC in the Bank of China as well as Standard Chartered. I hope that I would be able to see Mr. Hong next time in the shareholders' meeting. Thank you for your question, and thank you for your -- being here, and thank you for your questions. Our Annual General Meeting would close here now. Thank you.