HSBC 02 (0005) (Jun 10 - Dec 27)

[winston]

not vested

Citi: HSBC HOLDINGS (00005.HK) 2Q Results Good; Buyback Guidance Encouraging; Outlook Positive

Citi Research noted in a report that HSBC HOLDINGS (00005.HK) (HSBA.L) has reported an underlying profit before tax of US$9 billion for 2Q23, beating market consensus by 12%, while revenues beat estimates by 6%, and costs and impairment charges were in line with expectations.

The reported profit before tax in the period was US$8.8 billion, 10% above market expectations.

The Common Equity Tier 1 ("CET1") ratio was flat QoQ at 14.7%, while dividends and additional buybacks were in line with expectations.

HSBC is now guiding for a return on tangible equity of around 15% over the next two years, with net interest income rising to over US$35 billion this year.

Citi found HSBC's 2Q23 results positive, with encouraging buyback guidance and an optimistic outlook. The broker rated HSBC's UK shares Buy and has put it on positive catalyst watch.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

HSBC To Buy back Max. US$2B Shrs from Tmr to 26 Oct

HSBC HOLDINGS (00005.HK) announced that it will further commence a share buy-back for up to a maximum consideration of US$2 billion.

Ordinary Shares purchased under the buy-back will be cancelled.

HSBC entered into irrevocable, non-discretionary buy-back agreements with Merrill Lynch to enable the purchase of Ordinary Shares by Merrill Lynch, acting as principal, during the period running from 3 August 2023 and ending no later than 26 October 2023, for an aggregate purchase price of up to US$2 billion and the simultaneous on-sale of such Ordinary Shares by Merrill Lynch to HSBC.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

HSBC faces US$15b BoCom write-down

HSBC (0005) faces a potential US$15 billion (HK$117 billion) write-down for the overvaluation of Bank of Communications (3328) and is in a quandary over whether to offload its stake in the fifth-largest Chinese bank.

HSBC has retained its approximately 19 percent stake in BoCom since 2004.

Source: The Standard

https://www.thestandard.com.hk/section- ... write-down

[winston]

HSBC (5 HK) - Focusing on total capital return

Summary (5 HK): We believe HSBC is on the path to attain its ROTE target of mid-teens at around 14-16%.

Its net interest income could be more resilient than expected, given structural hedges in place which is likely to lower net interest margin sensitivity to lower Fed rates.

We expect an estimated total return to shareholders of around 15% (dividend and buybacks) in 2024.

Share price has risen by about 6% year-to-date, outperforming Hang Seng Index by 3ppt.

The stock is trading at 0.85x forward price-to-book (P/B) with 14.8% ROE, valuation is attractive.

HSBC remains as the preferred play in HK international banks from a total shareholder return perspective.

We finetune our fair value estimate to HKD82.20, implying a forward P/B of 1.1x

Source: OCBC

[winston]

not vested

HSBC exposure to bad commercial mortgages skyrockets in city

Impaired commercial mortgages to local borrowers surge over 4.5 times to US$3.2 billion (HK$24.96 billion) in the first half.

The focus on banks' exposure to the commercial real estate sector has been shifted to Hong Kong from the mainland.

The city's offices continue to face high vacancy rates and falling rentals.

CBRE's report showed that the Grade A buildings saw a vacancy rate of 16.9 percent, in the first half of the year.

As a result, the rentals dropped faster by 2.1 percent in the first half.

CBRE expects a decrease of up to 5 percent this year.

Source: Reuters

https://www.thestandard.com.hk/section- ... ts-in-city

[winston]

not vested

<Results>HSBC HOLDINGS 1Q Reported PBT Dips 25%; 1st DPS USD10 Cents; USD3B Max. Shr Buyback Intended

HSBC HOLDINGS (00005.HK) has announced its results for 1Q ended March 2025.

Dividend History
Announce Date Event Particular
2025/02/19 Final D:USD 0.3600 (Equivalent to approximately HKD 2.791007, with STERLING and HKD option)
2024/10/29 Interim 3 D:USD 0.1000 (Equivalent to approximately HKD 0.777313, With STERLING and HKD option)
2024/07/31 Interim 2 D:USD 0.1000 (Equivalent to approximately HKD 0.779073, With STERLING and HKD option)
2024/04/30 Interim SD:USD 0.2100 (Equivalent to approximately HKD 1.6394448, With STERLING and HKD option)

The group's reported profit before tax (PBT) amounted to USD9.484 billion in 1Q, down 25% YoY, while its reported profit after tax sank by 30.1% YoY to USD7.57 billion.

Its earnings per share came in at USD0.39, compared to USD0.54 in the same period last year.

Its net profit was USD6.932 billion, marking a YoY decrease of 31.9%.

Related News: HSBC HOLDINGS Prioritizes Supporting Clients Through Volatile Period; 2025 Div. Payout Ratio Target at 50%

The board of HSBC HOLDINGS has approved the distribution of the first dividend for 2025 of USD10 cents per share, compared to a total of USD31 cents per share (including special dividend) for the same period last year.

The group also revealed that it completed on April 25 the USD2 billion share buyback announced along with the release of its 2024 full-year results.

It now plans to launch a share buyback of up to USD3 billion, which is expected to commence shortly after the conclusion of the annual general meeting to be held on May 2 and to be completed before the announcement of the 2025 interim results.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

<Research>JPM: HSBC HOLDINGS' Privatization Plan of HANG SENG BANK: ST Pain, LT Gain

JP Morgan published a report on HSBC HOLDINGS (00005.HK) which announced a proposal to take HANG SENG BANK (00011.HK) private, with a cash consideration of HKD106 billion (approximately USD13.6 billion), or HKD155 per share, to acquire minority shareholders' stakes.

This transaction will cause HSBC HOLDINGS’ CET1 ratio to shrink by 125 bps.

To maintain the ratio within the target range, HSBC HOLDINGS will suspend share buybacks for three quarters following the announcement.

JP Morgan measured that this will scale down the buyback by about USD7 billion, with the CET1 ratio expected to be 14% by 2Q26.

Related News: M Stanley: Asia's 2Q Cross-border Wealth Mgmt Remains Strong w/ Continued Net Inflows into HK Banks

The broker believed the transaction will bring short-term pain but have long-term gain for HSBC HOLDINGS.

Even without considering revenue synergies or cost optimization, due to the elimination of HANG SENG BANK's minority interests, JP Morgan estimated HSBC HOLDINGS’ EPS and DPS in 2027 could be 1.5% and 3.1% higher than JP Morgan's base case forecast.

Notably, HSBC HOLDINGS disclosed its Hong Kong business's ROTE for 2024 as 38%, while HANG SENG BANK reported an ROE of only 11% during the same period.

In the short term, JP Morgan expected HSBC HOLDINGS’ share price to experience a mid-single-digit ppts of retreat; if the market overreacts, JP Morgan will view it as an opportunity to accumulate.

JP Morgan gave HSBC HOLDINGS an Overweight rating with a target price of HKD122.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

S&P: HSBC's Planned Privatization of HSB to Fortify Ties; Capital Impact Expected to be Manageable

S&P Global Ratings anticipated that HSBC HOLDINGS (00005.HK)'s announcement of a proposed 30.3% premium privatization of HANG SENG BANK (00011.HK) will further reinforce the ties between the two banks, enhance governance consistency and promote closer business and operational cooperation.

It is estimated that the capital pressure faced by HSBC HOLDINGS due to the repurchase of all outstanding shares of HANG SENG BANK will be within a manageable range.

Within the HSBC HOLDINGS system, HANG SENG BANK is a major local bank in Hong Kong with a strong franchise in the retail and small and midsize enterprise segment, S&P noted.

It believed that post-privatization, HANG SENG BANK will continue to operate under its independent brand, reflecting HSBC HOLDINGS' long-term commitment to serving the Hong Kong market.

Meanwhile, it is believed that HANG SENG BANK will benefit from more shared resources, leading to improved cost efficiency.

Related News: G Sachs Raises HSBC HOLDINGS TP to HKD113; Rating Kept Buy

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>Brokers' Latest Opinions on HSBC HOLDINGS' Privatization of HANG SENG BANK

Broker│ Rating│ TP
Huatai Securities│ Buy│$134.83
JPMorgan│ Overweight│$122
Citi│ Buy│$118.2
UBS│ Neutral│$103.7


Broker│ Opinion

Huatai Securities│ The implementation of its privatization of HANG SENG BANK (00011.HK) strengthened strategic synergies

JPMorgan│ HSBC HOLDINGS will face short-term pain but long-term gains

Citi│ HSBC HOLDINGS' privatization of HANG SENG BANK has minimal overall impact on EPS

UBS│ Focus lies on execution risks, rather than strategic validity

-------------------------

The table below lists the latest target prices, ratings and opinions of brokers on HANG SENG BANK:

Broker│ Rating│ TP
JPMorgan│ Neutral│$109
UBS│ Sell│$102


Broker│ Opinion

JPMorgan│ Privatization will enhance strategic synergies between HSBC HOLDINGS and HANG SENG BANK, delivering mid-term revenue and cost synergies

UBS│HSBC HOLDINGS' privatization of HANG SENG BANK may reduce HANG SENG
BANK's disclosure requirements, thereby easing urgency to dispose of its Hong Kong commercial real estate portfolio

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<News Alert> HSBC (5 HK) proposal of privatize of Hang Seng Bank (11 HK)

What’s new:
HSBC and Hang Seng Bank have announced a proposal for the privatisation of Hang Seng Bank by The Hongkong and Shanghai Banking Corp (“HSBC Asia Pacific”). The deal is expected to be closed by 1H26.

Valuation: HKD 155 per share, c.30% premium of Hang Seng Banks’ latest closing, or c.1.7x FY26F P/B . Total valuation will be c.HKD 290bn (USD 37bn).

HSBC will spend c.USD 14bn to buy the shares it does not hold.

Rationale: HSBC’s strategic priority of growing its business in HK and become simple and agile. HSBC believes it is best positioned to grow in Hong Kong by strengthening the banking presence of both HSBC Asia Pacific and Hang Seng Bank, focusing on their relative strengths and competitive advantages but continuing to allow all customers to choose where to bank.

Impact on HSBC’s financials: HSBC expects the Proposal to be accretive to earnings per ordinary share as a result of the removal of the minority interest earnings deduction related to Hang Seng Bank.

Before this action, HSBC owns c.64% of Hang Seng Bank. The additional MI of Hang Seng Bank is c.2.5% of FY26 HSBC’s earnings.

Impact on HSBC’s shareholder returns: No share buyback in the next three quarters. CET-1 ratio will be negatively impacted by 125bps. 50% dividend payout ratio unchanged.

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=28082