Zhi Tong Cai Jing·2025-09-29 08:25Core Viewpoint - Morgan Stanley has set a target price of HKD 122 for HSBC Holdings (00005) and maintains an "Overweight" rating, indicating potential upside for the stock due to capital release benefits outweighing potential increases in credit costs [1] Group 1: Company Actions - HSBC has instructed its subsidiary Hang Seng Bank (00011) to dispose of non-performing loans within its Hong Kong commercial real estate (CRE) portfolio [1] Group 2: Financial Implications - Morgan Stanley's sensitivity analysis indicates that potential increases in credit costs for HSBC could be 6 basis points in 2025, or an annualized increase of 13 basis points in the second half of 2025, which would reduce HSBC's earnings for the fiscal year 2025 by 1.6% [1] - The disposal of non-performing loans could lead to a capital release of approximately USD 1.3 billion due to expected loss excess [1] - Even considering potential earnings decline, the net impact on the core Tier 1 capital ratio could be an increase of 12 basis points, enhancing the capacity for share buybacks [1]