Goldman Sachs: Raises target price of STANCHART (02888) to HK$267, expecting second quarter performance to exceed expectations.

Goldman Sachs released a research report stating that the 12-month target price for Standard Chartered (02888) in Hong Kong stocks has been raised from 242 Hong Kong dollars to 267 Hong Kong dollars, and maintained a "buy" rating. Goldman Sachs stated that due to increased confidence in Standard Chartered's management's execution of strategic plans to achieve an ROTE of approximately 18% in the 2030 fiscal year, the target P/E ratio was raised from 10.25 times to 11.5 times. The bank updated its forecast for Standard Chartered before the company announced its second-quarter results on July 29. The bank predicted that Standard Chartered's second-quarter group post-tax net profit (excluding AT1) will be approximately $1.6 billion, which is 5% higher than market consensus expectations. At the same time, Goldman Sachs' profit forecast for Standard Chartered in the 2026-2028 fiscal years is 2-4% higher than market consensus, mainly due to a more constructive view on fee income and net interest income growth, and an expected ROTE of 13.6% in 2026, higher than the company's guidance of over 12%. Goldman Sachs pointed out that Standard Chartered's statutory operating income in the second quarter is estimated to be approximately $5.6 billion, a 2% year-on-year increase, with corporate and investment banking income showing strong growth of 4% year-on-year. The second-quarter net interest income is estimated to be around $2.9 billion, 2% higher than market expectations, showing slight improvement compared to the previous quarter, partly due to the rise in Hong Kong Interbank Offered Rate (HIBOR) levels during the quarter and the impact of more days in the second quarter. In terms of asset quality, the bank lowered its credit cost forecast and expects second-quarter credit impairment of around $220 million, 11% lower than consensus expectations, and expects the full-year credit cost ratio to be 32 basis points, lower than market consensus. In addition, Goldman Sachs expects Standard Chartered to announce a share buyback plan of around $1 billion when announcing its second-quarter results, bringing the total share buyback size for the 2026 fiscal year to approximately $2.5 billion.