China Securities Co., Ltd. maintains a "buy" rating on HSBC HOLDINGS (00005) with a target price of 120 Hong Kong dollars.

China Securities Co., Ltd. released a research report stating that it maintains a "buy" rating for HSBC HOLDINGS (00005) and recommends it as the top choice in the banking sector, with a target price of 120 Hong Kong dollars. The firm predicts revenue growth rates (excluding significant projects) of 0%, 1.4%, and 3.5% for the years 2025-2027, and net profit growth rates of 7.0%, 2.0%, and 3.0%. In the increasingly fragmented and disjointed era of globalization 2.0, HSBC has a broad presence in key regions and stands to benefit as a core player in the international industrial chain restructuring environment, as well as from the global trend of asset allocation among Asia's wealthy retail clientele. HSBC's clear advantages of high ROTE (Return on Tangible Equity) and high dividends make it an attractive investment opportunity. The privatization of HANG SENG BANK by HSBC HOLDINGS will not only directly increase the group's overall profitability, but also streamline its organizational structure, enhance business synergy efficiency, and strengthen its ability to seize growth opportunities in Hong Kong amidst increasingly fierce competition in the banking industry. The 30% premium acquisition highlights HSBC's focus on its business in the Hong Kong region and its confidence in the brand value of HANG SENG BANK, while ensuring the smooth completion of the privatization proposal. The financial impact of privatization on HSBC is a one-time reduction of the core Tier 1 capital adequacy ratio by 125 basis points, but ROTE, EPS, and DPS are expected to increase slightly due to higher profits and decreased net assets. To expedite the return of CET1 to a satisfactory range, HSBC has suspended share buybacks for three quarters and may accelerate revenue growth in the future to strengthen its internal capital. Despite the suspension of buybacks, the shareholder return rate through dividends and buybacks is expected to remain above 8% in 2026. Based on the closing price on October 9th, the comprehensive shareholder return rate through dividends and buybacks for the full year 2025 is 8.7%, with a cash dividend yield of 5.0%. For the full year 2026, the comprehensive shareholder return rate through dividends and buybacks is projected to be 8.0%, with a cash dividend yield of 5.8%, indicating significant dividend value.