Annual Income, Expenditure, Reserves and Endowment Funds

Since its establishment in 1991^※, The Hong Kong University of Science and Technology (HKUST) has operated its financial framework within the University Grants Committee (UGC) funding system, while progressively diversifying its income streams to include tuition fees, research grants, donations, and investment returns. This article compiles consolidated income and expenditure data, reserve positions, and endowment fund information drawn from official annual reports and audited financial statements.

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# 1. Overview of Annual Consolidated Income and Expenditure

# Income Classification Framework

HKUST's annual Consolidated Income is divided into the following principal categories:

1. Government Subventions and Grants: Includes UGC recurrent grants and earmarked grants from the Education Bureau and other government departments.
2. Tuition, Programmes and Other Fees: Covers fees from UGC-funded undergraduate and postgraduate programmes, as well as self-financing Continuing and Professional Education Programmes (CPEP).
3. Interest and Net Investment Income: Returns generated from the University's reserve investment portfolio.
4. Donations and Benefactions: Charitable donations recognised in the year's accounts.
5. Auxiliary Services and Other Income: Income from accommodation, catering, venue rentals, and other services.
6. Transfers from Deferred Capital Funds: The annual amortisation of past capital grants into the income statement.

Expenditure is presented under two broad headings: Teaching, Learning and Research (which includes the library, central computing facilities, etc.) and Institutional Support (covering administrative management, premises-related expenditure, etc.).

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# Year-by-Year Income and Expenditure (HK$ Million)

All figures below are drawn from HKUST's official annual reports and consolidated financial statements.

Note: For 2021/22, the officially disclosed figures broke income down only into a few headline line items. The table marks sub-items for which a breakdown is unavailable with "—". The consolidated deficit in 2021/22 was primarily driven by a sharp contraction in net investment returns as financial markets declined.

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# 2. Government Subvention as a Share of Income

Government subventions (principally UGC recurrent funding and earmarked grants) constitute HKUST's largest single source of income, though their share of total income has shifted over time.

The broad trend is clear: the absolute amount of government subvention has grown steadily, but because investment income and tuition fees have risen at a faster clip, government funding as a proportion of total income has been edging downwards, from around 53% in 2019/20 to roughly 47% in 2023/24^※.

The University's annual report also notes that government subventions in 2023/24 increased by roughly HK$298 million year-on-year, partly attributable to supplementary funding allocated by the UGC^※.

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# 3. Tuition Fees and Self-Financing Programme Income

Tuition, Programmes and Other Fees consists of two quite distinct components:

• UGC-funded undergraduate/postgraduate tuition fees: These are set by government and UGC policy, and increases are regulated.
• Self-financing Continuing and Professional Education Programmes (CPEP): HKUST sets its own prices for these, and they have been the fastest-growing income stream in recent years.

According to the 2023/24 annual report^※, tuition and programme fees rose by roughly HK$122 million^※ year-on-year, with the increase coming predominantly from self-financing CPEP courses. That year, the CPEP operation posted a surplus of HK$374 million^※ — one of the largest surpluses among all income segments.

In 2022/23 the CPEP surplus reached HK$375 million^※, roughly level with the prior year. This steady stream of surplus shows that self-financing programmes have become a crucial 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 sensitive to financial market conditions, and it is the principal driver of year-to-year surplus and deficit swings.

The 2022/23 annual report^※ notes that after stripping out investment returns, the 「底層盈餘」 (Underlying Surplus) for 2022/23 was HK$352 million^※. This metric is used to gauge the financial robustness of the University's core operations, showing that even after removing cyclical market effects, the recurrent business still generates a positive surplus.

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# 5. Donation Income and the Eighth Matching Grant Scheme

# The 2019/20 Donation Spike

Donations and benefactions booked in 2019/20 amounted to HK$741 million^※ — a near twelvefold increase over the HK$62 million recorded in 2018/19^※. The South China Morning Post reported^※ that the surge was primarily driven by the launch of the Eighth Matching Grant Scheme in July 2019, which incentivised a flurry of large donations to be brought forward.

# The Eighth Matching Grant Scheme

The Hong Kong government announced the Eighth Matching Grant Scheme in its February 2018 Budget^※, with a total funding 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 collectively raised roughly HK$5 billion^※ in donations, against which the government fully matched and disbursed HK$2.5 billion. HKUST received HK$600 million^※ in matching grants.

# New Donations Raised in Recent Years

Note: "New Donation Commitments" refers to donation pledges signed during the financial year, which are typically booked across multiple years according to the terms of the contract. "Donations Booked" is the amount recognised in the consolidated income statement for that year. The two figures therefore diverge owing to the time lag between pledge and recognition.

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# 6. University Reserves

# Reserve Structure

HKUST divides its reserves into two broad categories:

• UGC Reserves: Recurrent and capital reserves linked to UGC funding.
• Non-UGC Reserves: Reserves arising from non-government sources (self-financing operations, endowment funds, accumulated investment gains, etc.).

# Reserves Year by Year (HK$ Million)

# Reserves in a Hong Kong-Wide Context

According to a 2024 South China Morning Post report^※, as of 2023/24 the combined reserves of Hong Kong's eight publicly funded universities stood at close to HK$140 billion^※. The University of Hong Kong topped the table with HK$41.5 billion^※; The Chinese University of Hong Kong ranked second; and HKUST came third. Year-on-year reserve growth across the eight institutions ranged from 6% to 14%^※.

The same report notes that while all eight universities publish annual reports disclosing their financial positions, HKUST was the only one to voluntarily disclose its reserve figures in explicit detail^※; the reserve figures for the remaining institutions were supplied to the media by the government.

# Interpreting the Reserve Structure

Look at the structure of HKUST's reserves side by side — UGC reserves of roughly HK$4.629 billion and non-UGC reserves of roughly HK$9.998 billion in 2023/24 — and a few financial patterns emerge.

First, non-UGC reserves are more than double UGC reserves. This means that a significant share of HKUST's financial resilience is built on self-generated accumulation outside the government-grant envelope — surpluses from self-financing programmes, donations, and investment gains. The higher a university's non-UGC reserve ratio, the more cushion it typically has against fluctuations in government funding. This picture is consistent with the sustained profitability of HKUST's CPEP operations and the steady donation pipeline.

Second, reserve size does not correlate neatly with institutional age. HKUST's reserves rank third among the 「八大」 (the eight UGC-funded universities), behind only HKU and CUHK — both century-old institutions — even though HKUST has existed for just over three decades. For a young university to hold its reserves so close behind two long-established comprehensive universities points to a strong capacity for fundraising, self-financing activity, and investment management. It also echoes the tradition of sustained philanthropic support that began with the Hong Kong Jockey Club's foundational donation of over HK$1.9 billion (see Pre-History and Founding^※).

Third, "voluntary public disclosure" is itself a stance. Among the 「八大」 (the eight UGC-funded institutions), HKUST stands out as the one that proactively publishes detailed reserve figures. In a context where university reserve levels in Hong Kong have drawn recurring attention from society and from the Legislative Council (external sources on the more contentious aspects of this discussion are catalogued, as per our editorial rules, in the Wilder School Policies: Source Link Directory^※, and we do not restate them here), proactive disclosure serves both as an expression of transparency and as an act of placing oneself under public scrutiny.

Disclaimer: The above is a structural reading based on publicly available financial data. It does not constitute investment or financial advice of any kind. Assessments of whether reserves are "too high" or "too low" involve value judgements; this archive merely presents the data and the structure and draws no normative conclusions on that point.

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# 7. Endowment Funds and Investment Management

# Endowment Fund Architecture

HKUST has not established a single, separately accounted 「綜合捐贈基金」 (endowment pool) along the lines of some universities. Its approach to managing donations works as follows:

• Centralised investment management: After deducting the amount recognised in the income statement for the year, donations raised are pooled and managed as part of the University's overall reserves, with investment activities overseen by the Finance Committee of the University Council^※.
• Alumni Endowment Fund (AEF): Launched in 2012, the AEF is HKUST's first endowment fund whose donor base is primarily alumni^※. It operates on a perpetuity principle: the corpus is preserved in perpetuity and only the income generated by the investments is drawn upon^※. The fund supports four thematic areas: talent and passion development, civic engagement, financial assistance, and heritage initiatives.
• Research development funds: A number of major gifts have established designated research funds, often named after the donor or a specified research field, with the annual interest income used to support research personnel and facilities.

# Investment Management

Investment activities are overseen by the Finance Committee of the Council, while the University's senior management — the Vice-Chancellor and Vice-Presidents — determine how the funds are deployed. The non-UGC reserves, which reached HK$9.998 billion in 2023/24^※, serve as the primary external reference point for estimating the University's investable asset base.

In that financial year, net investment income within the UGC reserves was HK$449 million (compared with HK$335 million in 2022/23)^※. On that basis, the annualised investment return on the UGC-reserve portion alone can be estimated at roughly 10% to 11% (using a UGC-reserve base of approximately HK$4.2 billion to HK$4.6 billion).

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# 8. Research Funding

The Research Grants Council (RGC) is HKUST's most important source of public research funding, covering schemes such as the General Research Fund (GRF), Areas of Excellence (AoE), Collaborative Research Fund (CRF), and Research Impact Fund (RIF).

In 2022/23, HKUST received HK$111 million in Research Matching Grants^※, which are used to match externally sourced research funding with internal University contributions.

The RGC funding results announced in July 2025 showed^※ that HKUST secured over HK$279 million^※ across its three flagship funding schemes, demonstrating the University's sustained research competitiveness.

Research funding does not appear as a separate line item in the financial statements. It is captured either within "Government Subventions and Grants" (for funding from the RGC and other public sources) or within "Other" income (for contract research funded by corporations and non-government sources). The precise breakdown requires consulting the notes to the University's financial statements.

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# 9. Capital Commitments and Construction Spending

HKUST has long maintained an ambitious programme of campus expansion, which translates into substantial capital commitments. According to the 2018/19 annual report^※, outstanding capital commitments at the time stood at HK$4.621 billion^※, principally covering the Southern Campus expansion, new academic buildings, and student residence projects.

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