Annual Income, Expenditure, Reserves and Endowment Funds

Since its founding in 1991^※, the Hong Kong University of Science and Technology (HKUST) has run its finances within the funding framework of the Hong Kong University Grants Committee (UGC), while gradually building up a diversified income base covering tuition, research grants, donations and investment returns. Drawing on the University's official annual reports and audited financial statements, this article sets out its consolidated income and expenditure, reserve position and endowment information.

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# 1. Annual Consolidated Income and Expenditure at a Glance

# How income is classified

HKUST's annual consolidated income is reported under the following main categories:

1. Government Subventions and Grants: recurrent UGC subvention, plus earmarked grants from the Education Bureau and other government departments.
2. Tuition, Programmes and Other Fees: fees for UGC-funded undergraduate and postgraduate places, as well as income from self-financing continuing professional and executive education (CPEP) programmes.
3. Interest and Net Investment Income: returns on the University's reserve investment portfolio.
4. Donations and Benefactions: charitable gifts recognised in income in the year.
5. Auxiliary Services and Other Income: accommodation, catering, premises rental and other sources.
6. Transfers from Deferred Capital Fund: amounts brought into income each year as past subventions are applied to capital expenditure.

Expenditure is reported in two broad categories: Teaching, Learning and Research (including libraries and central computing facilities) and Institutional Support (including administration and building-related costs).

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# Annual income and expenditure by year (HK$ million)

The figures below are taken from HKUST's official annual reports and consolidated financial statements.

Note: for 2021/22 the University disclosed only the total income figure; the component breakdown is marked "—" where not published. The consolidated deficit that year was driven mainly by a sharp contraction in net investment returns amid falling markets.

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# 2. The Share of Government Funding

Government subvention — chiefly recurrent UGC grants and earmarked funding — is HKUST's single largest income source, but its share of total income has shifted over the years.

The overall trend is clear: the absolute value of government subvention has grown steadily, but because investment returns and tuition income have grown faster, its share of total income has drifted gently downward — from about 53% in 2019/20 to about 47% in 2023/24^※.

The annual report also notes that government subvention rose by about HK$298 million in 2023/24, partly reflecting additional UGC funding^※.

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# 3. Tuition and Self-financing Programme Income

"Tuition, Programmes and Other Fees" covers two very different streams:

• UGC-funded undergraduate and postgraduate tuition: levels set by government and UGC policy, with regulated increases.
• Self-financing continuing and professional education (CPEP) courses: priced by the University itself, and the fastest-growing income line in recent years.

According to the 2023/24 annual report^※, tuition and programme fees rose by about HK$122 million^※ year on year, driven mainly by self-financing CPEP courses. That year the CPEP operation recorded a surplus of HK$374 million^※ — among the largest of any income segment.

The CPEP surplus was a similar HK$375 million in 2022/23^※. This consistent surplus shows that self-financing programmes have become a key pillar of HKUST's financial health.

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# 4. Investment Returns and Market Volatility

Interest and net investment income is the line most exposed to financial-market swings, and the main driver of year-to-year surplus or deficit.

The 2022/23 annual report^※ highlights an "underlying surplus" — profit excluding investment returns — of HK$352 million^※ for that year. Measured this way, the University's core operations remained solidly in surplus even with the cyclical effects of markets stripped out.

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# 5. Donations and the Eighth Matching Grant Scheme

# The 2019/20 donations spike

Donations and benefactions recognised in 2019/20 reached HK$741 million^※, nearly twelve times the HK$62 million^※ recorded the year before. As the South China Morning Post reported^※, the surge was driven mainly by the launch of the Eighth Matching Grant Scheme in July 2019, which pulled a wave of donations forward.

# The Eighth Matching Grant Scheme

The Hong Kong government announced the Eighth Matching Grant Scheme in the February 2018 Budget^※, with a total matching pool of HK$2.5 billion^※. The scheme ran from July 2019 to June 2021, with all ten UGC-funded institutions participating.

When the UGC announced the results in May 2021^※, the ten institutions had together raised around HK$5 billion^※ in donations, triggering the full HK$2.5 billion in government matching. HKUST's matching grant came to HK$600 million^※.

# Recent fundraising

Note: "new pledged donations" are commitments signed in the year, which are then recognised in income in instalments over subsequent financial years as the pledge terms are met. "Donations recognised in income" is the amount booked in the consolidated income statement for that year. The two figures therefore run on different timetables.

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# 6. University Reserves

# How the reserves are structured

HKUST divides its reserves into two parts:

• UGC Reserves: recurrent and capital reserves associated with UGC subvention.
• Non-UGC Reserves: reserves built up from non-government sources — self-financing operations, endowment funds, accumulated investment gains and the like.

# Reserves by year (HK$ million)

# How HKUST's reserves compare with other Hong Kong universities

According to a 2024 South China Morning Post report^※, the eight UGC-funded universities in Hong Kong held combined reserves of close to HK$140 billion^※ as of 2023/24. The University of Hong Kong led the table with HK$41.5 billion^※; the Chinese University of Hong Kong was second, and HKUST third. Annual reserve growth across the eight universities ranged from 6% to 14%^※.

The report also notes that all eight universities publish annual reports disclosing their financial position, but HKUST is the only one that proactively discloses its reserve figures in detail^※; the other institutions' reserve numbers were provided to the media by the government.

# Reading the reserve structure

Set HKUST's reserve structure side by side — in 2023/24, UGC reserves of about HK$4.63 billion against non-UGC reserves of about HK$9.998 billion — and a few financial logics emerge.

First, non-UGC reserves are more than double UGC reserves. That means the University's financial resilience rests substantially on its own accumulated resources — CPEP surpluses, donations and investment gains — rather than on government subvention. The higher the share of non-UGC reserves, the greater a university's ability to absorb fluctuations in government funding; this is consistent with HKUST's consistently profitable self-financing (CPEP) operation and steady donor pipeline.

Second, reserve size does not track institutional age. Among the "big eight", HKUST ranks third by reserves, behind only HKU and CUHK — both century-old institutions — while HKUST itself was founded barely three decades ago. For a young university to sit so close to two long-established comprehensive universities in reserve terms speaks to its fundraising, self-financing and investment-management capabilities. It also carries forward a tradition of attracting philanthropic support that began before the University even opened, with the Jockey Club's founding gift of over HK$1.9 billion (see the pre-history of the University^※).

Third, proactive disclosure is itself a statement. HKUST is the only one of the eight to publish its reserve figures unprompted — a choice that signals something about its attitude to financial transparency. In a climate where university reserve levels are a recurring topic of public and Legislative Council scrutiny (external material on these contested debates is collected, per this site's rules, in the source directory of Wilder School Policies^※ rather than paraphrased here), voluntary disclosure both expresses a commitment to openness and invites closer public scrutiny in return.

Note: the readings above are structural interpretations of publicly available financial data, not investment or financial advice. Whether a given reserve level is "too high" or "too low" is a value judgment; this site presents the figures and their structure without taking a position.

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# 7. Endowment Funds and Investment Management

# How the endowment is structured

HKUST does not maintain a separately accounted "consolidated endowment pool". Rather, donations are managed as follows:

• Pooled management: donations, net of amounts recognised in income for the year, are held as part of the University's reserves and invested collectively. Investment activity is overseen by the Finance Committee of the University Council^※.
• The Alumni Endowment Fund (AEF): HKUST's first endowment fund with alumni as its primary donor base, established in 2012^※. The fund operates on a perpetual basis: the principal is preserved in perpetuity and only the investment income is spent^※. It supports four directions: talent and passion development, civic engagement, financial aid, and legacy initiatives.
• Research development funds: major gifts are often designated as named research funds for specific fields or in honour of a donor, with the annual interest used to support researchers and facilities.

# Investment management

The Council's Finance Committee oversees investments, while the University President and Vice-Presidents set the uses of funds. Non-UGC reserves — HK$9.998 billion in 2023/24^※ — are the main external proxy for the size of the University's investable asset base.

In that year, net investment income within the UGC reserves alone was HK$449 million (HK$335 million in 2022/23)^※. On that basis, the annualised return on just the UGC-reserve portion works out to roughly 10–11% (against a UGC reserve base of about HK$4.2–4.6 billion).

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# 8. Research Funding

The Hong Kong Research Grants Council (RGC) is HKUST's most important public source of research funding, with grants awarded under schemes including the General Research Fund (GRF), the Areas of Excellence (AoE) scheme, the Collaborative Research Fund (CRF) and the Research Impact Fund (RIF).

In 2022/23, HKUST received HK$111 million in research matching grants^※, used to match externally sourced research funding with University contributions.

When the RGC announced the results of its major grant schemes in July 2025^※, HKUST researchers were awarded over HK$279 million^※ across the three flagship schemes, underscoring the University's continued competitive strength in research.

Research funding is not shown as a separate income line in the financial statements: it sits within "Government subventions and grants" (for public sources such as the RGC) or "other income" (for contract research from corporate or non-government funders). The precise split is set out in the notes to the financial statements.

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# 9. Capital Commitments and Construction Spending

HKUST has maintained a large-scale campus expansion programme for years, giving rise to substantial capital commitments. According to the 2018/19 annual report^※, undrawn capital commitments then stood at HK$4.621 billion^※, covering major projects such as the southern campus expansion, new academic buildings and student hostels.

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