Lates News

J.P. Morgan released a report pointing out that HSBC's stock price has dropped by 5.1% since the announcement of its second quarter performance in 2025, underperforming the Hang Seng Index (which dropped 3.6%) during the same period, despite pre-tax profits exceeding market expectations by 10% when excluding one-off items. The bank believes that part of the market disappointment stems from concerns about a $1 billion unexpected impairment on China Construction Bank. The bank maintains a positive view on HSBC for several reasons: first, it still holds a capital threshold deduction balance of $14 billion, meaning that even if affiliate companies, such as CCB, further impair up to $14 billion, the impact on dividends, capital, and stock buybacks will be limited; second, management has provided some guidance on its digital asset strategy, indicating that the bank is prepared for the potential disruption of the accelerated global expansion of digital assets; and third, income performance is more resilient than expected. The bank has raised its target price from HK$118 to HK$122, with a "hold" rating, while estimating a total shareholder return of 9.7% over the next 12 months, ranking first among financial institutions in the Greater Bay Area.