Chapter 06


In fiscal year 2021–22, the third year in which the University community was impacted by the global coronavirus pandemic, the University's priorities were to sustain academic excellence and fiscal strength while safely restoring full campus operations. Throughout this challenging year, our staff and students have shown great resilience and adaptability in confronting these issues.

Whilst the pandemic has been challenging on every level, it has also proven that the University is agile and flexible, placing staff and students at the heart of its decision making. The University invested in various COVID-19-related initiatives to support staff and students in the provision of teaching tools, content, learning resources and health and safety. In addition, it increased financial support for students and offered rental waivers to caterers. These extra spending and revenue forgone amounted to HK$24.5 million (2020–21: HK$30.7 million).

Despite the continued impact of COVID-19, the University has managed to grow tuition income while controlling cost growth. This has resulted in a consolidated net surplus of HK$213.8 million for 2021–22, which well exceeded the Approved Budget given the uncertainty created by the pandemic and the volatility of the global financial markets. The consolidated net operating cash flow was HK$868.8 million. Consolidated net assets at the end of the financial year totalled HK$4,594.2 million, an increase of 4.9% over 2020–21.


The University has delivered satisfactory financial performance for 2021–22 through disciplined strategy execution, despite the challenging market environment. Consolidated income for the year was HK$1,700.7 million, of which HK$1,623.6 million was tuition fee income, benefitting from a moderate growth in student numbers and tuition fee rates. The strong revenue streams allow the University to generate the cash necessary to deliver its long-term plans whilst remaining financially resilient.

Operating expenditure

Operating expenditures have been effectively managed within the Approved Budget. Total consolidated operating expenses were HK$1,190.2 million in 2021–22. The majority of these expenses (HK$763.2 million) were personnel costs, which comprised 64.1% (2020–21: 65.8%) of the total operating expenses as the University continued to invest in staff to support growth in teaching and research, improve student to staff ratios, and enhance student support services.

Non-personnel costs fell below the Approved Budget as a result of reduced travel and campus activities, partly offset by the proportionate increase in incremental expenses to cope with the COVID-19 pandemic, including the purchase of rapid antigen test kits, personal protective equipment, and cleaning and sanitation supplies and services for staff and students. Premise-related expenses were HK$174.1 million, which accounted for 14.6% (2020–21: 13.8%) of total operating expenses, largely reflecting higher depreciation from leased assets and increase in capital spending. Direct student costs and student activity expenses were HK$108.6 million, representing 9.1% (2020–21: 7.6%) of the total operating expenses.

Interest and investment income

After pumping trillions of dollars of liquidity into financial markets over the past two years, global central banks have headed towards monetary tightening. Persistently high inflation, exacerbated by energy-price shocks from the Russia-Ukraine conflict, spurred global central banks to hike interest rates more aggressively than anticipated. High inflation and tighter financial conditions weighed on consumer and business confidence, and their growing fears contributed to falling financial markets. Most major asset categories recorded negative performance in 2022, and the University's investment portfolio was not immune.

The financial markets were highly volatile this year. Notwithstanding the market volatility, the University continues to adopt a prudent, risk-focused, diversified and long-term approach in managing its investments. During the year, the University had taken tactical actions to reduce exposure to equities by increasing cash allocation, which minimised the consolidated net investment loss to HK$269.3 million. Measured over a longer time-frame of three to five years, stable positive investment returns for supporting core activities of the University were achieved. Value of the Group's investment as of 31 August 2022 was HK$1,970.4 million (2020–21: HK$2,343.2 million).

Donations and Government grants

Donations from individuals, corporations, and foundations represent a vitally important source of funding for the University. In aggregate, a total of HK$121.9 million in donations and grants was recorded for the year, with HK$23.7 million reflected as current year grants and donations in support of operations and an additional HK$98.2 million recorded as deferred income for funding the University's long-term investment in physical infrastructure and providing resources for core activities for future generations. This included HK$22.0 million in donations from The Hong Kong Jockey Club Charities Trust for the HKMU Jockey Club Institute of Healthcare and STEAM projects.

Results of the year

Despite the financial challenges faced across the higher education industry and wider economy, the overall financial performance of the University was satisfactory. The University achieved a consolidated net operating surplus of HK$483.1 million, which is amongst the best in the University's history. Consolidated net investment loss was HK$269.3 million, largely attributable to market volatility driven by high inflation and recession fears. Consolidated net operating cash flow was a strong HK$868.8 million, and consolidated net assets increased to HK$4,594.2 million as at 31 August 2022. Cash and cash equivalents stood at HK$2,648.3 million as at 31 August 2022, paving the way to meet the investment commitments and new investment opportunities. These results ensure that the University is financially robust and able to respond to the challenges ahead.

Retirement scheme

The University provides its staff with two retirement schemes, namely the Occupational Retirement Schemes Ordinance (ORSO) Scheme and the Mandatory Provident Fund (MPF) Scheme. At year-end, the ORSO scheme had 300 members and the MPF scheme had 1,682 members. Their respective fund sizes were HK$262.2 million and HK$115.8 million.

Way forward

Initial indications for 2022–23 are positive and reassuring. Student recruitment has proceeded in line with the University's plan and the campus is once again buzzing with activity. The University has the digital infrastructure now embedded to rapidly change its teaching delivery with minimal disruption if circumstances change.

Looking ahead, China's COVID-19 policy, inflationary pressure, tighter monetary policy in developed economies and the Russia-Ukraine conflict are all adding to economic concerns over the next 6-12 months. As we move to a post-pandemic and rapidly changing external world, our prudent and flexible financial management has given the University the best possible financial underpinning. The University will continue to manage its sources of revenue effectively and its costs efficiently in order to generate the long-term cash flow needed to make investments that further its mission.