Ladies and gentlemen, the Annual General Meeting will start shortly. Today's meeting will be conducted in English. Please use the headphones to listen to the simultaneous interpretation in Cantonese, Channel 2, or [Foreign language] 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 silent mode? Thank you. As mentioned in our circular to shareholders dated 20 March 2025, 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 your represented shares. I now invite Mr.
Richard Hung, the representative of our share registrar, to explain and demonstrate how to operate the voting device. Richard will speak in Cantonese. Please use the headphones to listen to the simultaneous interpretation in [Foreign language], Channel 3, or English, Channel 4. Richard, please.
[Foreign language]
Thank you, Mr. Tong. 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, have a voting device together with a smart card. If you don't have one, 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 two sample questions to demonstrate how to use the voting device. After I have 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 cross. If you wish to abstain from voting, you shall not press any button. You can vote or change your 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 Hong Kong Exchanges implemented the Severe Weather Trading arrangements on the 23rd of September 2024. Please press 1 to vote for, agree, or press 2 to vote against if you don't agree. If you wish to abstain, please do not press any button. I now declare the poll open. It will close in 10 seconds. It is now time, and 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 Hong Kong Exchanges implemented the Severe Weather Trading arrangements on the 23rd of September 2024. Let's give it one more try. Hong Kong Exchanges has achieved carbon neutrality across the group's operations at the end of 2024. Press 1 to vote for, to agree, or press 2 to vote against if you don't agree. If you wish to abstain, please do not press any button. I now declare the poll open. It will close in 10 seconds. It is now time, and 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 Hong Kong Exchanges has achieved carbon neutrality across the group's operations at the end of 2024.
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. Tong to start the meeting.
There are no further questions. I now invite the Chairman to conduct the Annual General Meeting. Chairman, please.
Ladies and gentlemen, esteemed shareholders and members of the board, good afternoon and welcome to our 2025 Annual General Meeting. This is my first time chairing the AGM since my appointment as Chair a year ago. It is both an honor and a privilege to address you today as the Chairman of HKEX. I would like to extend our sincere thanks and appreciation to all our shareholders for the unwavering support over the past year. As we gather, we want to reflect on the past year, which has been filled with both challenges and opportunities. I'm proud of our team, led by our CEO, Ms. Bonnie Y. Chan, for navigating these circumstances with resilience and vision. 2024 was a very strong year for HKEX, marked by record-breaking trading volumes and exceptional financial results.
These achievements highlight the strength and resilience of our business under the new leadership team and the successful implementation of our strategic initiatives. Despite the challenging and uncertain macroeconomic and geopolitical environment, I remain confident that by focusing on our China strengths, driving international connectivity, and fostering innovation and sustainability across our markets, HKEX is well positioned for sustained growth and poised to lead and shape the development of the region's capital markets. I'm also pleased to note that despite the recent market volatility, our market has remained stable and very robust, with strong daily market turnover and a robust IPO pipeline. In our announcement last week, on 24 April, Hong Kong Exchanges and Clearing Limited signed an agreement with Hongk ong Land to establish its permanent group headquarters at Exchange Square, with the purchase of several office floors and related space.
Exchange Square has been our home to Hong Kong Stock Exchange for nearly four decades. It also houses our HKEX Connect Hall, where all our iconic listing ceremonies and many major finance-related events are held. This strategic investment will support HKEX's evolving needs, enhance stakeholder engagement, and provide long-term cost savings from rental expenses. It also reaffirms our confidence in the future of Hong Kong. Finally, I would like to express my deep gratitude to our dedicated team, whose hard work and commitment have been instrumental to our continued success. I also want to thank you, our shareholders, for your trust and support. Let us move forward together, united in our goals and aspirations for HKEX and for Hong Kong's capital markets, to solidify and further elevate the city's leadership position as an international financial center and a super connector between China and the rest of the world.
Thank you, and let's begin the meeting. Thank you. As there is a quorum of shareholders present, I now call the meeting to order. Before proceeding, pursuant to Article 67(1)(a) of the Company's Articles of Association, I demand poll voting on all resolutions set out in 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 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 HKEXn ews website. The notice of this meeting was set out in the circular dated 20 March 2025, sent to you all 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. Pursuant to Listing Rules and the rules relating to HKEX employee Share Award Scheme, Computershare Hong Kong Investor Services Limited, being the trustee holding investor shares awarded under the Share Award Scheme, will abstain from voting on the proposed resolution. If there are no questions with your consent, I propose to take notice of this meeting as read. No objection? Thank you. The proposed resolution number one is to receive the audited financial statements for the year ended 31st December 2024, together with the reports of directors and the auditor thereon. The auditor's report is included in the 2024 Annual Report, which has been sent to you all and tabled at this meeting. If you consent, I propose to take it as read. No objection? Thank you.
The audited financial statement for the year ended 31st December 2024, together with the reports of directors and auditor, have been included in the 2024 Annual Report, which has been sent to you all. Our Group Chief Financial Officer, our CEO, my fellow board members, and I should be pleased to answer any questions on the accounts from the management perspective. Our auditors are also pleased to answer any questions regarding the audit, the content of the audit report, and the accounting policies. Are there any questions on the reports? If there are no questions, I now propose the resolution number one be approved. Please use the voting device to cast your vote. Please press one to vote for or press two to vote against. Do not press any button if you choose to abstain from voting. I now declare the poll open. It will close in 10 seconds.
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 number two is to elect a director. There's one candidate standing for election to fill a vacancy on the board. There will arise following the retirement of Mr. Peter William Herbert Burnett at the conclusion of this meeting. The candidate is Mr. Peter William Herbert Burnett. Peter is here, who has been nominated by the board to stand for election. Relevant information about Mr. Burnett is set out in the circular dated 20 March 2025, sent to you all.
I now propose resolution number two that Peter William Herbert Burnett be and is hereby elected as director of the company with effect from the conclusion of the 2025 AGM for a term of approximately three years, expiring at the conclusion of the company's AGM to be held in 2028. Are there any questions on the proposed election? I now declare the poll open. It will close in 10 seconds. 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 number three is to reappoint PricewaterhouseCoopers as the auditor and to authorize the director to fix his remuneration.
The company's financial statements for the year ended 31st December 2024 were audited by PricewaterhouseCoopers, who has expressed his willingness to continue office. Are there any questions on the proposed reappointment of auditor and authorization of directors to fix his remuneration? If there are no questions, I now propose resolution number three be approved. Is there someone wanting to ask a question?
Although.
I have a question. I can't speak good Cantonese, so I'll speak in English. I suppose the interpreters can translate. I have a concern with PwC with the Hangzhou event. A lot of members from the team have already left. Might that be any impact on the quality of their work because many companies are not hiring PwC as their auditors?
Thank you for your question. May I invite our CFO, Vanessa, to take the question, please?
Thank you for your question. Of course, we attach a lot of importance to corporate governance. Therefore, we think this is a very important matter. Earlier this year, we have already announced that our 2026 financial year, we would go for bidding. With the remaining months of this year, we would work with Mr.
Nicholas Allen, our audit chairman, as well as a selected panel to discuss about whether we would change our auditors for 2026. You know that Hong Kong Exchanges and Clearing is of somewhat of a big scale, so we need very detailed procedures to change our auditors. This is why we would not do that in 2025. Thank you for your question. I hope that question has been addressed.
Any other questions? If no, I now propose resolution number three be approved. I now declare the poll open. It will close in 10 seconds. 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 number four is to grant a general mandate to directors to buy back not exceeding 10% of the number of company shares initial date of this resolution. Details of the proposed buyback mandate are set out in the circular dated 20 March 2025, sent to you all. Are there any questions? If there are no questions, I now propose resolution number four be approved. I now declare the poll open. It will close in 10 seconds.
It is time, and I now 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 number five is to grant a general mandate to directors to allot, issue, and deal with additional shares not exceeding 10% of the number of company shares in issue the day of this resolution. The discount for any shares of issue shall not exceed 10%. Details of the proposed issue mandate are set out in the circular dated 20 March 2025, sent to you all. Are there any questions? If there are no questions, I now propose resolution number five be approved. I now declare the poll open. It will close in 10 seconds. It is now time, and I declare the poll closed.
The poll result 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 number six is to obtain shareholders' approval by way of a special resolution on the proposed adoption of the new Articles of Association to incorporate amendments to existing Articles of Association of HKEX, to align with the recently amended Companies Ordinance and the recently announced Listing Rules amendments, and to implement housekeeping changes to enable the company to conduct general meetings and handle other corporate affairs more efficiently. Our independent legal advisor has confirmed that the new Articles of Association comply with the requirements of the Listing Rules and the laws of Hong Kong. Details of the proposed amendments are set in the circular dated 20 March 2025, sent to you all.
A copy of the proposed new Articles of Association is available on the HKEX group website and tabled at this meeting. Subject to shareholders' approval, the new Articles of Association will be submitted to the SFC for approval and will take effect upon receiving the SFC's written approval. Are there any questions on the proposed adoption of new Articles of Association?
[Foreign language]
I saw the document only just now, which says that the listing, which talks about the revision of the Listing Rules. I see that it means it will cause the company to be more efficient in its general meetings as well as more general as well as more efficiently handle its company matters. I saw that there were reports about Hong Kong Bank canceling physical general meetings, but then Hong Kong Bank has confirmed that it will not. I hope that Hong Kong Exchange would not cancel any physical meetings because it is a good opportunity for us to meet. I have shares of over 1,000 listed companies. For some companies, with a web meeting is basically meaningless. I hope that Hong Kong Exchange doesn't do that and serve as a bad example because some listed companies, they simply do not hold physical meetings.
I think it is okay to have general meetings in the mainland, but then one must have a physical meeting. Thank you for your question. I think our directors like very much to have an opportunity each year to see our shareholders. We have no plan to cancel physical meetings. Of course, if we have another pandemic like we had before, for safety measures, we would not have physical meetings. Apart from that, we very welcome physical meetings. Again, thank you for your question. There's another question from another shareholder, I think. Fellow directors of Hong Kong Exchange, good afternoon. I actually, this is not a question. I just have a suggestion for you. I have consulted many practices in the mainland. The shareholders' meeting, it's a combination of physical and web-based virtual meetings.
If your shareholders, wherever they are in the world, they can have the opportunity to join the meeting. I think Hong Kong Exchange can make a reference to this so that Hong Kong people can participate in physical meetings, whereas investors from the mainland or from overseas can participate in the virtual meeting so that the shareholders can ask directors questions that they hold to heart instantaneously. Please, I hope that you can take my suggestion. Thank you for your suggestion. For those shareholders who cannot be here, they can see us, but they cannot ask questions. They cannot participate. Regarding your suggestion, let's take it in and consider it gradually. Thank you.
If there are no other questions, I now propose resolution number six be approved by way of special resolution. I now declare the poll open. It will close in 10 seconds. 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 75% of the votes cast, I declare the special resolution carried. Before we conclude, are there any further questions from shareholders on the floor? [Foreign language]
There's a shareholder over here. Chairman Tong, I come from Beijing.
[Foreign language]
[Foreign language]
We are brought about a lot of benefits to us, and thank you very much. I do have two questions, and I'd like to seek your advice on that. It's about the capitalization cost because, during the press conference, we were told that we would have to do our own research so that we'd be able to come up with our own product so that we'd be able to further improve our trading or transaction system. You have not told us exactly how much you're going to spend on this. If you are able to tell us exactly how much you're going to spend, that would also be reassuring to us.
Also, at the press conference, we also talk about tax because during the past five years, in terms of profits tax, on average, it's about, it's something between 14%-15%. That's okay. Under the new accounting standards, after the adjustments, some people told me that it's possible that the profits tax might be seriously affected as a result. Can you tell us roughly, according to your estimate, in terms of our profits tax, to what extent is it going to go up? Of course, it's hard to come up with an aggregate. On behalf of my family, I'd like to thank you for your hard work because I understand that you've been working very, very hard indeed. Thank you very much for your two questions. I'll hand over to our Chief Executive Officer, Ms.
Chan, to answer your question. Is that okay? All right.
Thank you very much for the shareholders' questions. I remember last year you also asked a question. We do meet on an annual basis, and I'm also grateful to you for your appreciation of our work. On the capitalization cost, yes, you're right. In terms of our investment in this, this is something that we have to do because, in fact, as an exchange, when compared to other exchanges, we have to compete with them. Therefore, do we have an edge over them? That's something important. This would be determined on the extent that we are able to come up with an efficient system, how fast are we able to process their transactions and so on. People would also like to see this 24/7 and also round-the-clock operating system.
That is the transaction platform. The demand for this kind of system is very large. Therefore, we have decided that we will have to not just invest in this system, but also make sure that we would continue to improve and perfect it by way of research and studies. That is to answer your first question. You also asked about ODP, and you also talk about the platform we introduced for that purpose. We do have a figure that we can share with you in terms of the investment. It is about HKD 1 billion. It is about HKD 1 billion. You also talk about the investment, whether or not it is worth it. We believe that it is highly worth it because if you look at derivatives, it is also a highly competitive market.
Therefore, we hope that we'd be able to have a larger room for development. What would determine who's going to be a winner would very much be based on whether or not we have a platform and also in terms of risk management and also do we have the tools to manage them and so on. That's to answer your first specific question. The second question is about profits tax. I noticed that you do have a lot of understanding about our operations and so on. Indeed, we are very passive in terms of profits tax because according to the accounting standards, we do have to pay profits tax. What I'd like to share with you is that during the first quarter, when compared to previous situations, we used to pay about 10% profits tax.
We will have to increase that to around 16%. Therefore, I wouldn't say that it's a very small margin of increase. What we have been able to do is that if we are able to, well, increase our turnover and so on, even if we were to pay a higher profits tax, it's still okay. We will work hard to make sure that our core business and also in terms of diversification would be able to do a better job. Thank you.
Further questions?
Gentlemen at the back.
Thank you. I'd like to thank the board for such good record results, the quarterly results, as well as the year-end results. I just have one more comment for the board. Given that Hong Kong is positioning itself for family offices as an Asia-Pacific region, so-called as retail investors and small family offices, I'm of the view that whether the board can consider increasing the dividend to a reasonable rate like 5%-6%. Obviously, this cannot be done overnight. Whether the business model can be considered in the long term to have more recurring income so that it will fit family offices or retail investors looking for generation wealth in, say, 20 to 30 years' time. Thank you.
Yeah, this shareholder, thank you for your question. I want to explain, I don't know whether you're aware, that HKEX have a tradition of paying 90% of our profit tribute to shareholders. Really, I think that compared to global peers, we're way high up there. You pay 90%, we can't really pay any more. Therefore, it really depends on our profit. You will see that 2024, we make record profit. You have noticed our first quarter results, our revenue has gone up 32% compared to previous quarter, and profit after tax gone up 37%. That is the way that we can pay more different shareholders is if we make more profit. We're trying our very best despite the very challenging market environment. I believe that the 90% payout ratio is well accepted by shareholders.
I think so. Please be assured that we will continue to pay out this dividend ratio as much as we can.
Thank you.
[Foreign language] That's another question.
[Foreign language]
For the company, for any investment decision, it's not a problem. I don't have a problem, for instance, for purchasing nine floors of this building. I am more concerned about the rules of the game. A few years ago, there was a mechanism for subscription, which I found, or placements. I think that was a problem. A lot of companies have been using that as a mechanism. There was a discount of some 70%, as in a case we recently saw. The interest of the minority shareholders have been greatly diluted. This is highly unfair because their interest is diluted by 70% or 80% by the pricing of the placement. The minority shareholders, definitely, their interest is undermined, and it is unfair to them. Perhaps there are certain intermediaries which are used to manipulate the share price. We have seen that time and again.
For example, the sponsors, some of them do that as well. Lately, we've seen some stocks' share price have been rising for that reason. They've been manipulating the stock price. As for the dilution of the interest of the minority shareholders, that's not right. The division of interest in this particular game is not right. Please pay attention to that. For this shareholder, we thank you for the question. Bonnie, would you want to briefly respond? First of all, we hear you just now. What you mentioned was really about our position as a regulator of listed company, what we need to consider. As for this particular occasion, it is the Hong Kong Exchanges and Clearing's own AGM. What you have mentioned just now, perhaps you can reflect that to our listed division staff as well.
Concerning placements and also the related practices, they have been monitoring them, and they would welcome comments.
[Foreign language]
Thanks very much. Again, I come from the mainland as an investor. I'm from Beijing. To follow up with the previous question, you just purchased this property. I calculated that by the equivalence in the CBD of Beijing, it's priced like HKD 100,000 per square meter or something similar in the Hong Kong dollar. Your purchase price is almost HKD 300,000 or HKD 300,000 per square meter. It's not reasonable. My second question is that more and more investors from the mainland purchase the shares from the connection scheme. For the investors through this scheme, through Stock Connect scheme, they are not qualified to attend this AGM. We consult with different agencies and firms by whatever means they can't attend. Are you going to update the system?
I heard that it's because the system of Hong Kong Exchange is not compatible with that of the mainland. The system in the mainland could handle the value over HKD 1 billion. They have the detailed record on each ID number and their relevant shareholders, relevant exact number of the holds. Your system is working with the different agencies. You can't know as exactly as the mainland's ones.
Why don't I take the first question first? Thanks very much for your question. Your question is related to the nine-floor purchase of Exchange Square. You can't really make the benchmark with the property price in Beijing. You have to think about the reality. Exchange Square, we have been operating here for over four decades. This exact hall has been called the home for us. We are actually purchasing for ourselves the permanent home.
You can't really do the benchmark or the calculating like what you just mentioned. This purchase is also our manifestation of the confidence to Hong Kong. Hong Kong Land, they don't really sell their property in the central area. This kind of chance is really rare. It's once in a century.
I'd like to take the second question on whether we should do the upgrading of the system in order to allow the investors from the Stock Connect. If they hold the shares from the connection scheme, then they will be qualified for the AGM. We have very frequent contacts with the terminal agencies and the firms. Luckily, I had the meeting with my Chinese counterparts. For the system arrangements, we have a lot of exchanges very frequently.
Including the system, they let us know that this kind of suggestion is often received by their end from the mainland investors. We will definitely give a consideration. We have the follow-up steps. We will consider to allow the mainland investors and to include them in the AGM by a way or another.
[Foreign language]
Options. In which case, can I call our annual general meeting to close? Thank you very much for your attendance. I hope to see you next year. Thank you.
Thank you.