Sou Hu Cai Jing·2025-08-01 03:48Core Insights - HSBC Holdings reported a revenue of $34.122 billion for the first half of 2025, representing an 8.5% decline compared to the same period last year [1] - The pre-tax profit was $15.8 billion, a decrease of $5.7 billion or 26.7% year-on-year, while the net profit after tax fell by 30% to $12.4 billion [1] - The company's stock price experienced significant volatility following the earnings report, closing down 3.82% at HKD 96.15 per share, with a market capitalization of approximately HKD 1.68 trillion [1] Financial Performance - The decline in profit was primarily attributed to a $2.1 billion dilution and impairment loss related to the investment in Bank of Communications [3] - Last year's gain of $3.6 billion from the sale of Canadian and Argentine businesses was not replicated in this reporting period, negatively impacting overall performance [3] - HSBC's investment in Bank of Communications saw its ownership stake diluted from 19.03% to 16%, resulting in a dilution loss of $1.136 billion and an impairment loss of $1 billion [3] Business Structure and Strategy - HSBC has initiated a significant restructuring under the new CEO, aiming to transition from a matrix structure to four main business segments: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth Management [3] - Despite the restructuring, only the Corporate and Institutional Banking segment reported profit growth, while other segments experienced varying degrees of decline [4] - The Corporate Center segment shifted from a profit of $4.8 billion last year to a loss this year [4] Cost Management and Market Performance - HSBC announced a cost-cutting plan aiming to reduce expenses by $300 million by 2025, with a target of achieving annualized savings of $1.5 billion by the end of 2026 [4] - Operating expenses increased to $17.022 billion, up $700 million from the previous year, despite the cost reduction initiatives [4] - The Asia region contributed 78.3% of the pre-tax profit, with strong performances from mainland China, India, and Singapore, while European operations, particularly in the UK, faced profitability challenges due to economic stagnation [4] Regional Insights - The pre-tax profit from Hong Kong and mainland China operations was $9.384 billion, a decline of 13.85% year-on-year, but its contribution to overall profit increased from 50.5% to 59.4% [4] - Several institutions have raised their target prices for HSBC, with CICC increasing its target by 9.3% to HKD 111.9, maintaining an "outperform" rating [4]