J.P. Morgan: Raises HSBC Target Price to HKD122, Expects Total Shareholder Returns of 9.7% in the Next 12 Months.

JPMorgan Chase released a report stating that HSBC Holdings' stock price fell by 5.1% after the announcement of its second-quarter performance in 2025, underperforming the Hang Seng Index during the same period, despite pre-tax profits excluding one-time items exceeding market expectations by 10%. The bank believes that part of the market's disappointment stems from concerns about the unexpected $1 billion write-down at the Bank of Communications. The bank maintains a positive view on HSBC for three main reasons: firstly, it still holds a capital threshold deduction balance of $14 billion, which means that even if associated companies further write down up to $14 billion towards the Bank of Communications, the impact on dividends, capital, and stock buybacks will be limited; secondly, management has provided some guidance on its digital asset strategy, indicating that the bank is prepared for the potential disruption of accelerated global digital asset expansion; and thirdly, revenue performance is more resilient than expected. The bank has raised its target price from HK$118 to HK$122, rating it as "overweight," while estimating a total shareholder return of 9.7% over the next 12 months, ranking first among financial institutions in the Greater Bay Area of Guangdong, Hong Kong, and Macau.