Hong Kong Exchanges and Clearing (Hong Kong Exchanges and Clearing) Operating Income : $1,047 Mil (TTM As of Dec. 2023)

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What is Hong Kong Exchanges and Clearing Operating Income?

Hong Kong Exchanges and Clearing's Operating Income for the three months ended in Dec. 2023 was $241 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $1,047 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Hong Kong Exchanges and Clearing's Operating Income for the three months ended in Dec. 2023 was $241 Mil. Hong Kong Exchanges and Clearing's Revenue for the three months ended in Dec. 2023 was $480 Mil. Therefore, Hong Kong Exchanges and Clearing's Operating Margin % for the quarter that ended in Dec. 2023 was 50.16%.

Warning Sign:

Hong Kong Exchanges and Clearing Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -2.7%.

Hong Kong Exchanges and Clearing's 5-Year average Growth Rate for Operating Margin % was -2.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Hong Kong Exchanges and Clearing's annualized ROC % for the quarter that ended in Dec. 2023 was 2.42%. Hong Kong Exchanges and Clearing's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 1,203.03%.

Hong Kong Exchanges and Clearing Operating Income Historical Data

The historical data trend for Hong Kong Exchanges and Clearing's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Hong Kong Exchanges and Clearing Operating Income Chart

Hong Kong Exchanges and Clearing Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

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1,091.17

1,449.84

1,751.12

1,336.86

1,085.56

Hong Kong Exchanges and Clearing Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Operating Income	Get a 7-Day Free Trial															294.19	275.25	272.47	240.85	257.96

Hong Kong Exchanges and Clearing Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,047 Mil.

Hong Kong Exchanges and Clearing (OTCPK:HKXCY) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Hong Kong Exchanges and Clearing's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	963.404 * ( 1 - 8.9% )	/	( (36218.816	+	36236.523)	/ 2 )
=	877.661044	/	36227.6695
=	2.42 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	43748.1	-	4036.022	-	( 29760.107	-	max(0, 37085.521	-	40578.783	+	29760.107	))
=	36218.816

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	43686.01	-	3647.725	-	( 28771.287	-	max(0, 36686.087	-	40487.849	+	28771.287	))
=	36236.523

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Hong Kong Exchanges and Clearing's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	4548.132	/	( ( (369.292 + max(-26179.983, 0))	+	(386.822 + max(-24934.953, 0)) )	/	2 )
=	4548.132	/	( ( 369.292	+	386.822 )	/	2 )
=	4548.132	/	378.057
=	1,203.03 %

where Working Capital is:

	Working Capital		(Q: Sep. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(3881.203	+	0	+	6937.473)	-	(4036.022	+	0	+	32962.637)
=	-26179.983

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(4265.538	+	0	+	7451.024)	-	(3647.725	+	0	+	33003.79)
=	-24934.953

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Hong Kong Exchanges and Clearing's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	240.851	/	480.166
	=	50.16 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Hong Kong Exchanges and Clearing Operating Income Related Terms

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Hong Kong Exchanges and Clearing (Hong Kong Exchanges and Clearing) Business Description

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GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » Hong Kong Exchanges and Clearing Ltd (OTCPK:HKXCY) » Definitions » Operating Income

Comparable Companies

Traded in Other Exchanges

HKXCF:USA 00388:Hong Kong HK2C:Germany

Address

8 Connaught Place, 8th Floor, Two Exchange Square, Central, Hong Kong, HKG

Website

https://www.hkexgroup.com

Hong Kong Exchanges and Clearing is a vertically integrated securities exchange business offering listing, data, trading, clearing and settlement services across equities, debt and derivatives. HKEx, like Hong Kong itself, functions as a gateway between China and the rest of the world. HKEx serves as a preferred listing venue for Chinese companies outside of China and, through the Connect Scheme, offers two-way trading for a growing group of financial products with the Shanghai Stock Exchange and the Shenzhen Stock Exchange.