Core Points - The cross-border payment system between mainland China and Hong Kong is designed to facilitate small-scale remittances for residents of both regions [1] - The system allows for convenient remittances without the need for business background documentation for individual residents [1] - It supports various financial services including tuition payments, medical fees, and salary disbursements [1] Group 1 - The cross-border payment system supports remittances for residents holding specific identification documents from both regions [1] - Mainland residents can remit funds to Hong Kong accounts, while Hong Kong residents can transfer funds to mainland accounts [1] - Participating institutions can set transaction limits based on risk management considerations [1] Group 2 - Initial participating institutions from mainland China include major banks such as ICBC, Agricultural Bank of China, Bank of China, and others [2] - Hong Kong institutions involved include Bank of China Hong Kong, East Asia Bank, and HSBC among others [2] - The range of participating institutions is expected to expand over time [2]

Group 1 - United Overseas Bank (UOB) and its wholly-owned subsidiary in China have officially signed on as direct participants in the Cross-Border Interbank Payment System (CIPS) [1] - UOB will leverage CIPS to provide a "one-stop" cross-border RMB clearing, settlement, and payment services for domestic and foreign enterprises and financial institutions [1] - UOB's connection to CIPS allows it to interface with over 1,600 global participants, enhancing its ability to process cross-border payments and settlements efficiently [1] Group 2 - East Asia Bank (China) has opened its flagship branch in Beijing, which is the first retail demonstration outlet following its brand renewal [1] - The new branch will offer specialized wealth management and cross-border financial services, catering to personalized customer needs [1] - The opening of this branch marks a significant step in East Asia Bank's transformation journey [1] Group 3 - American Express has announced that eligible cardholders can now use contactless "tap-to-pay" functionality for tickets on the Shanghai Maglev Line and all Beijing rail transit lines, including the suburban S2 line [2] - This initiative aims to enhance convenience for both local residents and visitors traveling in China [2] - The CEO of the joint venture in China emphasized the importance of providing more choices and greater convenience for American Express card members [2]

Core Insights - East Asia Bank (China) Limited has officially opened its flagship retail branch in Beijing's Chaoyang Wangjing area, showcasing a renewed brand image and commitment to providing exceptional wealth management solutions for clients at different life stages [1][2] Group 1: Branch Opening and Location - The Wangjing branch is strategically located in Beijing's second central business district, benefiting from tax incentives and talent attraction policies, and is surrounded by numerous multinational company headquarters and innovation centers [1] - The branch aims to enhance customer experience through an upgraded layout and optimized service processes, aligning with the trend of intelligent and specialized banking services [1][2] Group 2: Service Offerings and Team - The branch features modern financial service concepts, including private wealth management rooms and spaces for customized events, enhancing interaction between clients and financial advisors [2] - A youthful and professional financial advisory team, equipped with extensive cross-border financial knowledge, is positioned as a core competitive advantage, capable of delivering personalized and comprehensive financial solutions [2] Group 3: Future Commitment - The opening of the Wangjing branch marks a significant step in East Asia Bank's transformation journey, with a continued commitment to providing high-quality and comprehensive financial services under the brand promise of "Live Every Moment" [2]

Major Events - Jin'an Industrial (02292) received a privatization offer from its controlling shareholder at a premium of approximately 30%, with resumption of trading on May 12 [1] - Jingtai Holdings (02228) plans to acquire 90% of Shanghai Siwei Medical for 250 million yuan, aiming to create an AI-enabled remote electrocardiogram diagnosis platform [1] - China Investment and Financing (01226) is in contact with MCHKI to explore several potential corporate activities following unusual stock price movements [1] - Qiu Tai Technology (01478) reported camera module sales of 33.229 million units in April, an increase of 8.4% month-on-month but a decrease of 20.1% year-on-year [1] - Stone Pharmaceutical Group (01093) received approval for clinical trials of SYH2046 in the United States [1] - Fosun Pharma (02196) subsidiary Junji Health obtained FDA approval for drug clinical trials [1] - Rongchang Bio (09995) received approval for the marketing of Aidiqi® for treating HER2-positive advanced breast cancer with liver metastasis in China [1] - Livzon Pharmaceutical (01513) received approval for the marketing of injectable aripiprazole microspheres [1] - GAC Group (02238) reported April automobile production of 108,600 units, a year-on-year decline of 25.74% [2] - China Overseas Development (00688) reported contract property sales of approximately 20.164 billion yuan in April, a year-on-year decrease of 7.5% [2] Share Buybacks/Reductions - China Hongqiao (01378) repurchased 19.667 million shares for 273 million HKD on May 9 [1] - AIA Group (01299) repurchased 1.5 million shares for 92.1915 million HKD on May 9 [1] - Cathay Securities (02611) repurchased 1.6906 million A-shares for 29.3356 million yuan on May 9 [1] - Times Electric (03898) repurchased 610,300 shares for 19.7008 million HKD on May 9 [1] - East Asia Bank (00023) acquired 52.8 million shares from Sumitomo Mitsui Banking Corporation [1] - Shandong Molong (00568) saw shareholder Zhimo Holdings reduce its holdings by 28.81 million H-shares [1] Operating Performance - Longyuan Power (00916) achieved a power generation volume of 6.9064 million MWh in April, a year-on-year increase of 4.85% [2] - New天绿色能源 (00956) reported a power generation volume of 1.4778 million MWh in April, a year-on-year increase of 16.91% [2] - Jianye Real Estate (00832) achieved a total property contract sales amount of 2.71 billion yuan in the first four months, a year-on-year increase of 4.8% [2] - China Overseas Hongyang Group (00081) reported a cumulative contract sales amount of 9.556 billion yuan in the first four months, a year-on-year decrease of 14.1% [2] - Times China Holdings (01233) reported a cumulative contract sales amount of approximately 1.81 billion yuan in the first four months, a year-on-year decrease of 29.87% [2] - Agile Property Holdings (01813) reported a pre-sale amount of 509 million yuan in April, a year-on-year decrease of 47.5% [2] - Greenland Hong Kong (00337) reported contract sales of approximately 880 million yuan in the first four months, a year-on-year decrease of 69.3% [2]

Group 1 - The number of existing property mortgages in April 2025 was 3,446, down 14.2% from March's 4,015, marking a five-month low and a decline for two consecutive months [1] - The number of pre-sale property mortgages in April 2025 was 467, a decrease of 34.1% from March's 709, also reaching a three-month low after four months of increases [1] - Compared to the same period last year, existing property mortgages in April 2025 decreased by 17.3% from 4,166 in April 2024, while pre-sale mortgages increased by 151.1% from 186 in April 2024 [1] Group 2 - In the first four months of 2025, existing property mortgages totaled 17,055, an increase of 6.5% from 16,016 in the same period last year [1] - Pre-sale property mortgages in the first four months of 2025 reached 2,241, a significant increase of 300.2% from 560 in the same period last year, marking a three-year high [1] - The Chief Vice President of the mortgage referral department indicated that the decline in mortgage numbers was due to a lack of large new property launches in April, but overall property registration numbers have been rising [1] Group 3 - In terms of market share for existing property mortgages, Bank of China (Hong Kong) ranked first with 27.4%, followed by HSBC at 17.6% and Hang Seng Bank at 11.1% [2] - For pre-sale property mortgages, Bank of China (Hong Kong) also led with a market share of 25.5%, followed by HSBC at 18.6% and Hang Seng Bank at 11.3% [2] - The market share of the four major banks for existing property mortgages dropped to 62.3% in April 2025, a seven-month low, indicating potential adjustments in market share among banks [2]

Financial Performance - Profit attributable to owners of the parent increased by 11.9% to HK$4.608 billion in 2024, up from HK$4.118 billion in 2023[20]. - Basic earnings per share rose by 15.2% to HK$1.52, compared to HK$1.32 in the previous year[20]. - The bank's net profit increased by 11.9%, reaching HK$4,118 million for the year[39]. - Basic earnings per share for 2024 were HK$1.52, up from HK$1.32 in the previous year[71]. - The Group reported a profit attributable to shareholders of HK$4.608 billion in 2024, an increase of 11.9% from HK$4.118 billion in 2023[71]. Asset and Deposit Growth - Total consolidated assets reached HK$877.8 billion (US$113.0 billion) as of December 31, 2024, representing a 2.0% increase from HK$860.4 billion in 2023[10]. - Total customers' deposits and certificates of deposit issued increased by 1.3% to HK$664.7 billion from HK$656.2 billion[20]. - Total customers' deposits and certificates of deposit issued were HK$664,671 million, showing a recovery from HK$656,216 million in 2023[32]. - Total deposits from customers rose by 2.3% to HK$643.093 billion, with savings deposits increasing by 14.2%[78]. Loan and Credit Metrics - Total loans and advances to customers and trade bills amounted to HK$534.4 billion, a 0.4% increase from HK$532.5 billion in 2023[20]. - The impaired loan ratio rose to 2.72% from 2.69% in 2023[20]. - The loan-to-deposit ratio was maintained at 80%[32]. - The loan-to-deposit ratio stood at 80.2% at the end of December 2024, down from 81.1% at the end of 2023[79]. Operational Efficiency - The cost-to-income ratio slightly increased to 45.9% from 45.5% in 2023[20]. - Operating expenses increased by HK$202 million, or 2.1%, to HK$9.634 billion, with a cost-to-income ratio of 45.9%[76]. - The cost-to-income ratio improved due to strict cost discipline and productivity gains from ongoing digital transformation initiatives[145]. Digital Banking and Innovation - The bank's digital banking platforms, including the revamped BEA Mobile app, saw significant customer adoption, with expectations for digital revenue growth to outpace other channels[48]. - The revamped BEA Mobile app saw a positive user response, driving higher revenue and facilitating 84% of retail transactions through unmanned channels[112]. - The newly launched digital trading platform, BEA SmarTrade, provides a one-stop solution for trading Hong Kong, US, and Chinese Mainland A shares[140]. - The fintech collaboration platform, BEAST, has enabled the bank to develop AI-driven analytics and operations, enhancing risk and compliance management[50]. Strategic Initiatives - The OneBank strategy aims to enhance cross-boundary banking experiences, leading to a marked increase in new-to-bank accounts and assets under management[44][45]. - The OneBank initiative will continue to be a key focus, aiming to strengthen collaboration across business units and explore cross-border business opportunities[168][176]. - The bank is leveraging its unique OneBank platform to facilitate cross-boundary flows of people, payments, and commerce while continuing to digitalize operations[56]. Market and Economic Context - The Chinese Mainland economy achieved a growth target of 5.0% in 2024, slightly down from 5.2% in 2023[93]. - Hong Kong's economy grew by 2.5% in 2024, supported by a rebound in merchandise exports despite weak private consumption[94]. - The global economy is forecasted to grow by 3.3% in 2025, with risks from trade protectionism and geopolitical tensions[95]. Employee Development and Culture - The bank's workforce as of December 31, 2024, totaled 7,880 employees, down from 8,140 a year earlier, indicating ongoing adjustments in organizational structure[180][188]. - The employee survey response rate for 2024 reached 99%, with 91% of employees expressing enthusiasm and pride in working for the bank[190]. - The bank is committed to upskilling employees, with over 300 GBA specialists trained in 2024, enhancing capabilities in technology and data analytics[185][186]. Risk Management and Compliance - The bank's risk management framework emphasizes a sound risk culture, ensuring all employees are responsible for risk management[195]. - The Group aims to maintain a robust capital adequacy position to support business growth, adhering to regulatory and internal capital ratios[198]. - The Group is committed to having sufficient funds to meet all obligations during crisis scenarios, ensuring business continuity[199].

Group 1 - East Asia Asset Management and East Asia Bank have launched the "East Asia Smart All-Weather Fund" to provide diversified investment options for wealth enhancement [1] - The fund targets a distribution yield of 5.5% to 6%, with the first distribution scheduled for May 14 [1] - The minimum investment amount for the fund is HKD 10,000, and it can be subscribed in USD and RMB equivalents [1] Group 2 - The fund's asset allocation includes 30% to 70% in equities, 30% to 70% in bonds, 0% to 15% in commodities, 0% to 20% in real estate investment trusts, and 0% to 30% in cash [1] - As of February 5, the simulated portfolio distribution was 49.9% in equities, 35.1% in bonds, 9.9% in alternative investments, and 5.1% in cash [2] - The fund's equity holdings consist of 29.1% in US stocks, 13.8% in European stocks, and 7% in Asia-Pacific stocks [2]

Group 1 - The core viewpoint emphasizes the promotion of healthy development of the private economy and the internationalization of the RMB through leveraging Hong Kong's advantages as a financial center [1] - Suggestions include Hong Kong becoming a "super service provider" for domestic tech companies looking to expand internationally [1] - The proposal highlights the need for enhanced cloud computing capabilities and regulatory improvements for AI in the financial sector [1] - Recommendations for advancing the offshore RMB hub in Hong Kong include promoting RMB international settlement and expanding investment channels [1] - Support for innovative financial development in Qianhai is suggested, including allowing "dual-headquarters" enterprises to freely allocate funds within certain limits [1] Group 2 - East Asia Bank plans to increase support for private enterprises, with annual credit support exceeding 50 billion yuan [2] - The bank aims to raise the proportion of credit to private enterprises from 30% to around 50% [2] - The introduction of transaction banking products, particularly in supply chain finance, will provide convenience for private enterprises [2] - Efforts will be made to shorten the financing chain for private enterprises by optimizing loan processes and adjusting interest rates based on risk [2]

Investment Rating - The report maintains an "OUTPERFORM" rating for Bank of East Asia [2] Core Views - The bank's revenue, pre-provision operating profit, and net profit attributable to equity holders increased by +1.1%, +0.3%, and +11.9% respectively in 2024 [3][14] - The bank's dividend per share (DPS) rose by 27.8% year-on-year from HKD 0.54 to HKD 0.69 [3][14] - The net interest margin (NIM) for 2024 was 2.09%, down by 5 basis points year-on-year but up by 6 basis points compared to the first half of 2024 [5][16] - The overall impaired loan ratio increased to 2.72%, up by 3 basis points year-on-year [6][16] - Non-interest income increased by 14.9% year-on-year, driven mainly by trading gains and changes in fair value [8][16] Financial Performance Summary - Net interest income for 2024 was HKD 16,529 million, a decrease of 2.0% from the previous year [2][12] - The bank's return on equity (ROE) improved to 4.0%, up by 0.4 percentage points year-on-year [3][14] - The cost-to-income ratio rose to 45.9%, an increase of 0.4 percentage points year-on-year [8][16] - The bank's total loans increased slightly by 0.2% year-on-year, with Hong Kong loans decreasing by 0.8% and mainland loans increasing by 0.5% [5][16] Valuation - The target price for 2025 is set at HKD 11.80, based on a price-to-book (P/B) ratio of 0.30 times [4] - The estimated net profit attributable to equity holders for 2025 is projected to grow by 7.8% year-on-year [4][12]

Investment Rating - The report maintains an "OUTPERFORM" rating for Bank of East Asia [2] Core Views - The bank's revenue, pre-provision operating profit, and net profit attributable to equity holders increased by +1.1%, +0.3%, and +11.9% respectively in 2024 [3][15] - The bank's dividend per share rose by 27.8% year-on-year from HKD 0.54 to HKD 0.69 [3][15] - The net interest margin (NIM) for 2024 was 2.09%, down by 5 basis points year-on-year but up by 6 basis points compared to the first half of 2024 [5][17] - The overall impaired loan ratio increased to 2.72%, up by 3 basis points year-on-year [6][17] - Non-interest income increased by 14.9% year-on-year, primarily driven by trading gains and changes in fair value [8][17] Financial Performance Summary - Net interest income for 2024 was HKD 16,529 million, a decrease of 2.0% from the previous year [4][13] - The bank's return on equity (ROE) increased to 4.0%, up by 0.4 percentage points year-on-year [3][15] - The cost-to-income ratio rose to 45.9%, an increase of 0.4 percentage points year-on-year [8][17] - The bank's total loans increased slightly by 0.2% year-on-year, with Hong Kong loans decreasing by 0.8% and mainland loans increasing by 0.5% [5][17] Valuation - The target price for the bank is set at HKD 11.80, based on a price-to-book (P/B) ratio of 0.30 for 2025 [4] - The estimated net profit attributable to equity holders for 2025 is projected to grow by 7.8% year-on-year [4][13]