Better Track Record: Singapore Exchange vs. Hong Kong Exchanges and Clearing

港股近日持續調整,科技板塊也暫時回氣,投資主題落在新能源車、醫藥、內需等板塊上。比亞迪(SEHK:1211)今年業務可望見收成,市場憧憬其終可成功進入新台階。

Exchanges such as stock and commodity exchanges are some of the best business models available in the modern world. These businesses generally generate good economics since they usually exist as a monopoly or duopoly in their respective markets.

In the two most attractive capital markets in Asia, Singapore and Hong Kong, investors can find two stock exchanges with dominant positions; Singapore Exchange Limited (SGX: S68) and Hong Kong Exchanges and Clearing Limited (SEHK: 388).

But which of these two companies is a better candidate to invest in for the long term? Clearly, there is no quick answer to this since we need to compare both companies across different metrics.

Here, I’ll take a look at one aspect of the comparison – which company has the better track record? To do so, I’m going to compare the financial performance of both companies over the last decade.

This should help us assess the sustainability of their performance in the future. Also, we can find out which company did better, financially, during the last ten years.

Singapore Exchange (SGX)

Let’s start off with Singapore Exchange, or SGX. In the last decade, SGX’s revenue has grown from S$640 million (US$470 million) to S$910 million (up 42% during the period) while profit attributable to shareholders has improved from S$318 million to S$391 million (up 23% for the decade).

It term of dividends, SGX has grown its dividend per share (DPS) from 27 Singapore cents to 30 Singapore cents in the last ten years.

Hong Kong Exchanges and Clearing Limited (HKECL)

And now Hong Kong Exchanges and Clearing, otherwise known as HKEx. From 2009- 2018, HKEx’s revenue has grown from HK$7.0 billion (US$894 million) to HK$15.9 billion (up 127% during the period). Similarly, net profit attributable to shareholders has improved from HK$4.7 billion to HK$9.3 billion – up by 98% during that period.

As for dividends, HKEx has grown its dividend per share (DPS) from HK$3.93 to HK$6.71 over the last ten years.

Conclusion

Overall, we can see that both companies grew their revenue, net profit, as well as dividends over the decade. Yet, I would say HKEx came in stronger given its superior growth rates across all three metrics.

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