Hong Kong Exchanges and Clearing is expected to report record profit for a second consecutive quarter, supported by a surge in IPOs and trading activity.

Analysts surveyed by Bloomberg estimate Q2 profit could rise 32% to HK$4.2 billion (US$540 billion), with revenue up 27% to HK$6.9 billion (US$884 million).

The exchange is set to release its earnings on August 20, 2025.

Share sales in Hong Kong have reached over US$46 billion in 2025, with average daily turnover more than doubling year-on-year to HK$242 billion.

HKEX shares have increased 47% this year, compared to a 25% rise in the Hang Seng Index.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Mainland Chinese capital surge drives Hong Kong exchange profits to new highs

The record profits reflect Hong Kong’s unique position as Chinese investors redirect massive capital flows southward amid ongoing geopolitical tensions.

Chinese investors poured a record $95 billion into Hong Kong markets in the first half of 2025, while southbound turnover from mainland China into Hong Kong soared 154% compared to the previous year 21.

This surge in mainland investment has more than doubled Hong Kong’s average daily turnover to HK$242 billion, directly boosting HKEX’s transaction-based revenue model 1.

The trend highlights how Hong Kong serves as a key channel for Chinese capital seeking international market access, particularly as Chinese firms increasingly view Hong Kong listings as alternatives to US markets amid ongoing trade tensions.

2️⃣ Exchange captures value from China’s retail-dominated market structure seeking international exposure

Hong Kong’s exchange benefits from bridging China’s massive but insular domestic market with international investors seeking Chinese asset exposure.

Mainland China’s A-share market remains heavily retail-dominated, with individual investors holding over 75% of shares, while foreign participation sits at just 2% despite the inclusion of A-shares in MSCI indices since 2017 3.

This creates structural demand for Hong Kong as an alternative channel, where Chinese companies can access international capital while Chinese investors can diversify beyond their domestic market constraints.