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<Research>CICC Assumes HSBC to Keep Delivering High ROTE, High Shareholder Returns; Current Valuation Attractive
Recommend 30 Positive 79 Negative 25 |
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HSBC HOLDINGS (00005.HK) reported 1Q24 adjusted revenue of US$17.02 billion, up 2.6% YoY, beating CICC's and the market's estimates by 0.9% and 3.3% respectively; and pre-tax profit of US$8.97 billion, down 4.3% YoY, beating the CICC's and the market's estimates by 3.2% and 10.9% respectively. The adjusted results topped forecast faintly, mainly due to higher net interest income, higher non-interest income, and lower provisions. CICC expected HSBC's adjusted ROTE to rebound to 16.4% in 1Q24, close to 1H23's level and the upper end of 2024's target of 14-16%. In addition, the Group announced a new US$3 billion share buyback program, which was higher than the broker's US$2 billion estimate. CICC believed that HSBC will continue to deliver high ROTE and high shareholder returns, and the current valuation of 0.9x 2024E PB remained attractive. The target price was raised by 8% to $82.6, with rating Outperform. AAStocks Financial News |
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